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The Silicon Valley Bank failure strikes me as a colossal failure of bank regulation, and instructive on how rotten the whole edifice is. I write this post in an inquisitive spirit. I don't know the details of how SVB was regulated, and I hope some readers do and can chime in. As reported so far by media, the collapse was breathtakingly simple. SVB paid a bit higher interest rates than the measly 0.01% (yes) that Chase offers. It attracted large deposits from venture capital backed firms in the valley. Crucially, only the first $250,000 are insured, so most of those deposits are uninsured. The deposits are financially savvy customers who know they have to get in line first should anything go wrong. SVB put much of that money into long-maturity bonds, hoping to reap the difference between slightly higher long-term interest rates and what it pays on deposits.  But as we've known for hundreds of years, if interest rates rise, then the market value of those long-term bonds fall. Now if everyone comes asking for their money back, the assets are not worth enough to pay everyone back.  In sum, you have "duration mismatch" plus run-prone uninsured depositors. We teach this in the first week of an MBA or undergraduate banking class. This isn't crypto or derivatives or special purpose vehicles or anything fancy. Where were the regulators? The Dodd Frank act added hundreds of thousands of pages of regulations, and an army of hundreds of regulators. The Fed enacts "stress tests" in case regular regulation fails. How can this massive architecture fail to spot basic duration mismatch and a massive run-prone deposit base? It's not hard to fix, either. Banks can quickly enter swap contracts to cheaply alter their exposure to interest rate risk without selling the whole asset portfolio. Michael Cembalist assembled numbers. This wasn't hard to see. Even Q3 2022 -- a long time ago -- SVB was a huge outlier in having next to no retail deposits (vertical axis, "sticky" because they are insured and regular people), and a huge asset base of loans and securities. Michael then asks .. how much duration risk did each bank take in its investment portfolio during the deposit surge, and how much was invested at the lows in Treasury and Agency yields? As a proxy for these questions now that rates have risen, we can examine the impact on Common Equity Tier 1 Capital ratios from an assumed immediate realization of unrealized securities losses ... That's what is shown in the first chart: again, SVB was in a duration world of its own as of the end of 2022, which is remarkable given its funding profile shown earlier.Again, in simpler terms. "Capital" is the value of assets (loans, securities) less debt (mostly deposits). But banks are allowed to put long-term assets into a "hold to maturity" bucket, and not count declines in the market value of those assets. That's great, unless people knock on the door and ask for their money now, in which case the bank has to sell the securities, and then it realizes the market value. Michael simply asked how much each bank was worth in Q42002 if it actually had to sell its assets. A bit less in each case -- except SVB (third from left) where the answer is essentially zero. And Michael just used public data. This is not a hard calculation for the Fed's team of dozens of regulators assigned to each large bank. Perhaps the rules are at fault? If a regulator allows "hold to maturity" accounting, then, as above, they might think the bank is fine. But are regulators really so blind? Are the hundreds of thousands of pages of rules stopping them from making basic duration calculations that you can do in an afternoon? If so, a bonfire is in order. This isn't the first time. Notice that when SBF was pillaging FTX customer funds for proprietary trading, the SEC did not say "we knew all about this but didn't have enough rules to stop it." The Bank of England just missed a collapse of pension funds who were doing exactly the same thing: borrowing against their long bonds to double up, and forgetting that occasionally markets go the wrong way and you have to sell to make margin calls. (That's week 2 of the MBA class.)  Ben Eisen and Andrew Ackerman in WSJ ask the right question (10 minutes before I started writing this post!) Where Were the Regulators as SVB Crashed? "The aftermath of these two cases is evidence of a significant supervisory problem," said Karen Petrou, managing partner of Federal Financial Analytics, a regulatory advisory firm for the banking industry. "That's why we have fleets of bank examiners, and that's what they're supposed to be doing."The Federal Reserve was the primary federal regulator for both banks.Notably, the risks at the two firms were lurking in plain sight. A rapid rise in assets and deposits was recorded on their balance sheets, and mounting losses on bond holdings were evident in notes to their financial statements.moreover, "Rapid growth should always be at least a yellow flag for supervisors," said Daniel Tarullo, a former Federal Reserve governor who was the central bank's point person on regulation following the financial crisis...In addition, nearly 90% of SVB's deposits were uninsured, making them more prone to flight in times of trouble since the Federal Deposit Insurance Corp. doesn't stand behind them.90% is a big number. Hard to miss.  The article echoes some confusion about "liquidity"SVB and Silvergate both had less onerous liquidity rules than the biggest banks. In the wake of the failures, regulators may take a fresh look at liquidity rules,...This is absolutely not about liquidity. SBV would have been underwater if it sold all its securities at the bid prices. Also Silvergate and SVB may have been particularly susceptible to the change in economic conditions because they concentrated their businesses in boom-bust sectors...That suggests the need for regulators to take a broader view of the risks in the financial system. "All the financial regulators need to start taking charge and thinking through the structural consequences of what's happening right now," she [Saule Omarova] saidAbsolutely not! I think the problem may be that regulators are taking "big views," like climate stress tests. This is basic Finance 101 measure duration risk and hot money deposits. This needs a narrow view! There is a larger implication. The Fed faces many headwinds in its interest rate raising effort. For example, each point of higher real interest rates raises interest costs on the debt by about $250 billion (1 percent x 100% debt/GDP ratio). A rate rise that leads to recession will lead to more stimulus and bailout, which is what fed inflation in the first place. But now we have another. If the Fed has allowed duration risk to seep in to the too-big to fail banking system, then interest rate rises will induce the hard choice between yet more bailout and a financial storm. Let us hope the problem is more limited - as Michael's graphs suggest. Why did SVB do it? How could they be so blind to the idea that interest rates might rise? Why did Silicon Valley startups risk cash, that they now claim will force them to bankruptcy, in uninsured deposits? Well, they're already clamoring for a bailout. And given 2020, in which the Fed bailed out even money market funds, the idea that surely a bailout will rescue us should anything go wrong might have had something to do with it. (On the startup bailout. It is claimed that the startups who put all their cash in SVB will now be forced to close, so get going with the bailout now. It is not startups who lose money, it is their venture capital investors, and it is they who benefit from the bailout. Let us presume they don't suffer sunk cost fallacy. You have a great company, worth investing $10 million. The company loses $5 million of your cash before they had a chance to spend it. That loss obviously has nothing to do with the company's prospects. What do you do? Obviously, pony up another $5 million and get it going again. And tell them to put their cash in a real bank this time.) How could this enormous regulatory architecture miss something so simple? This is something we should be asking more generally. 8% inflation. Apparently simple bank failures. What went wrong? Everyone  I know at the Fed are smart, hard working, honest and dedicated public servants. It's about the least political agency in Washington. Yet how can we be seeing such simple o-ring level failures? I can only conclude that this overall architecture -- allow large leverage, assume regulators will spot risks -- is inherently broken. If such good people are working in a system that cannot spot something so simple, the project is hopeless. After all, a portfolio of long-term treasuries is about the safest thing on the planet -- unless it is financed by hot money deposits. Why do we have teams of regulators looking over the safest assets on the planet? And failing? Time to start over, as I argued in Towards a run free financial systemOr... back to my first question, am I missing something? ****Updates: A nice explainer thread (HT marginal revolution). VC invests in a new company. SVB offers an additional few million in debt, with one catch, the company must use SVB as the bank for deposits. SVB invests the deposits in long-term mortgage backed securities. SVB basically prints up money to use for its investment! "SVB goes to founders right after they raise a very, very expensive venture round from top venture firms offering:- 10-30% of the round in debt- 12-24 month term- interest only with a balloon payment- at a rate just above prime For investors, it also seems like a no-downside scenario for your portfolio: Give up 10-25 bps in dilution for a gigantic credit facility at functionally zero interest rate.If your PortCo doesn't need it, the cash just sits. If they do, it might save them in a crunch. The deals typically have deposit covenants attached. Meaning: you borrow from us, you bank with us.And everyone is broadly okay with that deal. It's a pretty easy sell! "You need somewhere to put your money. Why not put it with us and get cheap capital too?"Update:1) Old Eagle Eye's comment below is fascinating. I am getting the sense that the rules actually preclude putting 2+2=4 together here. Copied here in totoSIVB did have a hedge put on during 2022, but it was limited to its available-for-sale securities ("AFS"). It was precluded from hedging its interest rate risk in held-to-maturity securities ("HTM") by U.S. GAAP rules. [My emphasis] Here is the explanation found at PwC:[PWC Viewpoint Commentary: "The notion of hedging the interest rate risk in a security classified as held to maturity is inconsistent with the held-to-maturity classification under ASC 320, which requires the reporting entity to hold the security until maturity regardless of changes in market interest rates. For this reason, ASC 815-20-25-43(c)(2) indicates that interest rate risk may not be the hedged risk in a fair value hedge of held-to-maturity debt securities." "ASC 815-20-25-12(d) provides guidance on the eligibility of held-to-maturity debt securities for designation as a hedged item in a fair value hedge."][Extracted subsection:"Chapter 6: Hedges of financial assets and liabilities. "6.4 Hedging fixed-rate instruments"6.4.3.4 Hedging held-to-maturity debt securities"ASC 815-20-25-12(d)"If the hedged item is all or a portion of a debt security (or a portfolio of similar debt securities) that is classified as held to maturity in accordance with Topic 320, the designated risk being hedged is the risk of changes in its fair value attributable to credit risk, foreign exchange risk, or both. If the hedged item is an option component of a held-to-maturity security that permits its prepayment, the designated risk being hedged is the risk of changes in the entire fair value of that option component. If the hedged item is other than an option component of a held-to-maturity security that permits its prepayment, the designated hedged risk also shall not be the risk of changes in its overall fair value."]Source: PWC Viewpoint (viewpoint.pwc.com) Publication date: 31 Jul 2022https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/derivatives_and_hedg/derivatives_and_hedg_US/chapter_6_hedges_of__US/64_hedging_fixedrate_US.htmlUpdate 2: Thanks to anonymous below for a pointer to a good New York Times article about SVB, what the Fed knew and when. Apparently the bank's supervisors knew about problems for a long time before the bank failed. Whether this is good or bad news for the regulatory project I leave to you. 

This report reviews the status of Mashreq countries' economic integration with the world, with the Arab world, and within the Mashreq sub-region itself. It examines the drivers of progress to date and barriers to further integration. It focuses on Mashreq countries' participation in integration agreements; integration through trade, labor, and capital flows; and physical infrastructure. The main findings are that Mashreq countries trade more with the European Union (EU) than with other countries in Middle East and North Africa (MENA) or among themselves, but account for a significant share of MENA's trade in services. With the exception of Iraq, a major oil exporter, the Mashreq countries export a relatively large share of manufactured goods-surpassed only by Tunisia and Morocco. Mashreq exports are relatively less concentrated than other MENA countries, with the exception of Tunisia and Morocco. Regional economic integration would be enhanced through better trade facilitation procedures and by better transport infrastructure. Policies relating to further improving the investment climate and private sector development also matter.

During the 1960s and 1970s most developing countries imposed anti-agricultural policies, while many high-income countries restricted agricultural imports and subsidized their farmers. Both sets of policies inhibited economic growth and poverty alleviation in developing countries, while doing little to assist small farmers in high-income countries. Since the 1980s, however, many developing countries began to reduce the anti-agricultural bias of sectoral policies, and from the early 1990s the European Union began to move away from price supports to more-direct forms of farm income payments. This paper summarizes a forthcoming book that seeks to explain this evolving pattern of distortions to incentives conceptually and econometrically by making use of new political economy theory and a new globally comprehensive and consistent set of estimates of the changing extent of annual distortions over the past half-century. The distortion estimates involve more than 70 products that cover around 70 percent of the value of agricultural output in each of 75 countries that together account for over 90 percent of the global economy, and they expose the contribution of the various policy instruments (both farm and non-farm) to the net distortion to farmer incentives. Such a widespread coverage of countries, products, years and policy instruments has allowed this collection of studies to test a wide range of hypotheses suggested by the new political economy literature, including the importance of institutions. As a set it sheds much new light on the underlying forces that have affected incentives facing farmers in the course of national and global economic and political development, and hence on how those distortions might change in the future - or be changed by concerted actions to offset political pressures from traditionally powerful vested interests.

To understand the fiscal position of a country, contingent liabilities and other sources of fiscal risk need to be considered. The authors develop a framework to assess and manage fiscal risk in Bulgaria. Bulgaria's Currency Board Arrangement has effectively imposed fiscal discipline, but leaves only limited room to accommodate potential fiscal shocks. Through risks embedded in the portfolio of government contingent and direct liabilities, significant fiscal pressures could arise in the future. Major sources of risk include environmental liabilities and investment requirements, collection capacities of the social protection institutions, and further engagement in off-budget programs, such as government guarantees. To limit the Government's exposure to risks, yet accommodate investment needs crucial to growth and development, Bulgaria must find an optimal strategy for liability management, fiscal reserves, and risk mitigation. Priorities for dealing with existing risks and limiting further accumulation of risks include: 1) Mitigating currency and interest rate risks in the government liability structure. 2) Implementing proposed institutional and finance reform of the country's pension and health care systems. 3) Building adequate contingency reserves. 4) Introducing risk-sharing arrangements. 5) Prioritizing and placing strict limits on the amounts of new guaranteed obligations. 6) Developing government capacity to analyze and manage risks. 7) Fully integrating fiscal risk management with other policy considerations in fiscal management, as part of an integrated asset and liability management strategy.

Regionaler Wirtschaftlicher Integration (RWI) liegt ein doppelter Zielkonflikt ("trade-off") zugrunde. Zum einen besteht dieser trade-off auf räumlicher Ebene da es sich um eine politische und ökonomische Organisationseinheit zwischen dem Lokalen und Globalen handelt. Zum anderen besteht ein trade-off da sowohl Liberalisierungsansätze innerhalb der Region als auch das Aufrechterhalten (oder gar Erweitern) von Protektionismus gegen die Außenwelt Teil von regionalen Ansätzen sind. Darüber hinaus ist RWI ein facettenreiches, polymorphes und idiosynkratisches Phänomen, das (potentiell) eine Vielzahl unterschiedlicher Politkfelder und Politikschlagrichtungen enthält. Traditionell wird RWI nach der Klassifizierung von Balassa (1961) in Präferenzabkommen (PTAs), Freihandelsabkommen (FTAs), Zollunionen (CUs) Gemeinsame Märkte (CMs), Währungsunionen (MUs) und ggf. Politische Unionen (PUs) eingeteilt und meist auch eine zeitliche Abfolge in dieser Reihenfolge unterstellt. In Wahrheit finden solche Prozesse teilweise parallel und in vielen Fällen unvollständig statt. Daher erscheint es sinnvoller, in vier verschiedene Kategorien an Politikfeld0ptionen zu unterschieden, nämlich • Präferentielle Liberalisierung von Güterhandel; • Präferentielle Liberalisierung anderer Produktionsfaktoren; • Koordinierung & Harmonisierung von Regularien und Institutionen; • Koordinierung und gemeinsame Verausgabung von öffentlichen Mitteln. Ein solch vielgestaltiges und janusköpfiges Phänomen bezieht seine Rechtfertigung aus einer großen Anzahl an unterschiedlichen theoretischen Schulen. Wir diskutieren diese Schulen in dieser Arbeit in drei separaten Kapiteln zum Neo-Klassischen Ansatz, zu Ansätzen der Politischen Ökonomie sowie zu Heterodoxen Ansätzen. Dabei lassen sich fünf Gruppen von Effekten unterscheiden. Diese sind • Allokationseffekte; • Akkumulationseffekte; • Lokationseffekte; • Levellingeffekte; • Und Gouvernanz-Effekte. Bei der Analyse von RWI sind darüber hinaus Imperfektionen zu beachten, die insbesondere in Afrika eine entscheidende Rolle spielen. Dies bezieht sich insbesondere auf die teilweise sehr schwache Implementation von beschlossenen RWI Maβnahmen, die sich z.B. im "Spaghetti Bowl" Phänomen, politischen Widerständen auf nationaler Ebene, administrativen Schwächen und massiven Deckungslücken in den Budgets der regionalen Behörden niederschlagen. Auch die Dominanz der Informalität in der Wirtschaft wirft Fragen zur potentiellen Wirkungsmächtigkeit von RWI auf. Während solche "Papiertiger"-Phänomene grundsätzliche Fragen an der Ernsthaftigkeit der jeweiligen Regionalvorhaben aufwerfen, kann die Präsenz solcher Hürden auch Grund für Optimismus sein da die empirisch bislang beobachteten, relativ geringen Wohlfahrtseffekte zu einem substantiellen Anteil auf die geringe Implementierungstiefe zurückgeführt werden können und nicht zwangsläufig ein Beleg für die Ineffektivität von RWI per se gesehen werden muss. Mit anderen Worten, eine wirkliche empirische Überprüfung des Erfolgs oder Versagens von RWI in Entwicklungsländern könnte erst stattfinden, wenn es tatsächlich ordnungsgemäß umgesetzt würde. Der bekannteste und am umfangreichsten entwickelte Ansatz zur Analyse der Effekte von RWI ist fraglos der Neo-klassische Ansatz, der sich grundlegend und ausschlieβlich mit der auf Viner zurückgehenden Gegenüberstellung von Handelsschaffung und Handelsumlenkung. Wir zeigen, dass die neoklassischen empirischen Methoden und Resultate trotz Tausender Studien wenig robust sind und zu einem Gutteil arbiträr gewählt sind. Kleinste Änderungen in Modell-Parametern, der empirischen Strategie oder den Datenquellen führen zu stark abweichenden Resultaten. Grundsätzlich scheint Handelsumlenkung weniger stark ausgeprägt zu sein als Handelsschaffung, der Netto-Effekt für die Regionen scheint also aus dieser Perspektive in den allermeisten Fällen positiv zu sein (dies zeigen sowohl Sekundärstudien als auch eigene Berechnungen). Es gibt sowohl Gewinner als auch Verlierer innerhalb der Regionen. Allerdings scheinen diese nicht wie vom Neoklassischen Ansatz vorhergesagt, durch die anfängliche ökonomische Machtverteilung vorherbestimmt zu sein. Dennoch bleibt die axiomatische Inferiorität von RWI zwischen Entwicklungsländern gegenüber multilateraler Liberalisierung (sowie Nord-Süd Integration und unilateraler Liberalisierung) intakt, solange die Analyse auf diese Perspektive beschränkt bleibt. Dies wirft die Frage auf, warum es dann sein kann, dass Regionalintegration so weit verbreitet ist – sowohl die Analysen aus Politökonomischer Sicht als auch jene aus Heterodoxer Sicht versuchen jeweils Antwort auf dieses scheinbare Rätsel zu geben. Darüber hinaus mündet eine unvoreingenommen und holistische Analyse von Regionalintegration innerhalb des Neoklassischen Ansatzes in einer fundamentale Erkenntnis, die überraschenderweise nur selten in der Literatur diskutiert wird. Ein näherer Blick auf die jeweiligen Schätzungen offenbart, dass selbst die optimistischsten Berechnungen in Größenordnungen enden, die absolut vernachlässigbar sind im Verhältnis zu generellen Wachstumsdynamiken, da es sich bei den Effizienzgewinnen aus Allokationseffekten um Einmal-Effekte in Höhe von unter einem Prozent des BIP handelt. Dies trifft interessanterweise nicht nur auf RWI zu, sondern auch für eine mögliche allumfassende multilaterale Liberalisierung. Diese eklatante Bedeutungslosigkeit der allokationsbedingten Handelsschaffung von sowohl RWI als auch multilateraler Liberalisierung wirft in unseren Augen mehr Fragen bezüglich der Zweckdienlichkeit des Neoklassischen Ansatzes auf, als bezüglich des Entwicklungs- und Wachstumspotentials von Regionalintegration. Allerdings stellt sich die Frage, warum dieser Analyse dann ein solch großer Raum beigemessen wird. Der Hauptgrund scheint, wie in vielen anderen Bereichen der Volkswirtschaft auch, weniger der Umstand zu sein, dass die Einsicht fehlt, dass diese Analysen die Realität nur unzureichend ab- und nachbilden, sondern vielmehr, dass von vielen Autoren mehr Wert auf eine elegante, mathematisch raffinierte und zumindest scheinbar klar quantifizierte und eindeutige Ergebnisse liefernde Methode setzen wollen als auf eine, bei der die Disziplin methodisch bestenfalls in den Anfangsschuhen steckt, Datengrundlagen in substantiellem Umfang fehlen und Ungewissheiten aufgrund der Komplexität kaum abschließend überwunden werden können. An zweiter Stelle folgt in Bezug auf Popularität und Anzahl an Studien ein spieltheoretischer Ansatz der Politischen Ökonomie. Hierbei wird der Frage nachgegangen, warum Regionalintegration betrieben wird, obwohl der Neoklassische Ansatz (scheinbar) nachweist, das seine multilaterale Lösung zu präferieren wäre. Als Grund wird hierbei der Einfluss von Lobbyisten und anderen Interessengruppen angenommen. Die Diskussion widmet sich im weiteren Verlauf fast ausschließlich der Frage, ob eine solcherart zustande gekommene Regionalintegration weitere, multilaterale Liberalisierungsschritte beflügelt und behindert. Allerdings ist der Erkenntnisgewinn aus den unzähligen Studien und Modellen äußerst überschaubar. Andere wichtige Ansätze für die Analyse von RWI erhalten deutlich weniger Aufmerksamkeit in der wissenschaftlichen Diskussion, obwohl diese heterodoxen Ansätze, die den Fokus auf dynamische Effekte und Strukturwandel legen, in der öffentlichen Debatte eine nicht unbedeutende Rolle spielen. Diesen Ansätzen ist gemein, dass sie einen Fokus auf Marktversagen und Externalitäten legen. Das Triumvirat der Neuen Handelstheorie, der Neuen der Diskussionen, wobei zusätzlich einige Keynesianische Einflüsse, der Neue Institutionalismus (sowie praxisorientierte Aspekte der Öffentlichen Finanzen) und einige radikalere Ansätze mit Ökonomischen Geografie und der Neuen Endogenen Wachstumstheorie bildet hierbei den Kern Fokus auf Arbeitsmärkte und Entwicklungsfallen eine Rolle spielen. Heterodoxe, dynamische Effekte sind sehr komplex und divers und die theoretische und empirische Anwendung auf Regionalismus ist nur sehr schwach entwickelt. Einige heterodoxe Argument ändern die Resultate der Neoklassischen Theorie nur in beschränktem Umfang und zeigen sowohl Vorteile und Nachteile von regionalen und multilateralen Liberalisierungsschritten. Einige andere heterodoxe / dynamische Effekte treten entweder ausschließlich bei RWI auf oder zu einem deutlichen geringeren Maβe auch im Gefolge von Multilateralismus und Nord-Süd Integration. Einige davon haben unserer Einschätzung nach tatsächlich das Potential, die Neoklassischen Argumente zur Dominanz von multilateralen Lösungen komplett ins Gegenteil zu verkehren. Leider ist die empirische Analyse von dynamischen Effekten jedoch sehr schlecht entwickelt. Dennoch erscheinen Schätzungen aufgrund von dynamischen Modellen "sufficiently specified to suggest that the benefits behind the dynamics of integration are potentially large" (Develin & French-Davis, 1998:20). Die Komplexität der heterodoxen Effekte impliziert, dass komplizierte Entscheidungen zur Auswahl von spezifischen Maβnahmen getroffen werden müssen. Auch wenn Regionalismus dynamische Effekte auslösen kann, ist dies keineswegs ein Automatismus, der aus jeglichen regionalen Anstrengungen entspringt. Rodrik's Kommentar zu Industriepolitik paraphrasierend, sollte daher in Zukunft weniger der Frage nachgegangen werden, ob Regionalismus unter Entwicklungsländern eine gute Politikwahl ist, sondern eher, wie Regionalismus ausgebildet werden muss, um erfolgreich Entwicklungsimpulse geben zu können.:1. Introduction 1.1 Regional economic integration: a multi-faceted phenomenon and double trade-off 1.2 Economic theories with application to economic regionalism 1.2.1 Stock-taking of theoretical frameworks 1.2.2 Attempt at a categorisation of potential effects 1.2.3 Structure and approach 1.2.4 Justification and limitations 2. Historical sketch and typical phenomena of African regionalism 2.1 Historical sketch: regionalism in Africa and beyond 2.2 Paper tigers, spaghetti bowl and informality 2.2.1 Illusionary regionalism: the political economy of signing, but not implementing regionalism 2.2.1.1 Concealed political resistance 2.2.1.2 Institutional weaknesses 2.2.1.3 The spaghetti bowl 2.2.1.4 Is regionalism virtual or real? 2.2.2 Regionalism and the informal sector 3. Neo-classic perspectives: is regionalism doomed to failure? 3.1 Neo-classical economics: trade diversion and absolute losses 3.1.1 The destructive effects of trade diversion 3.1.2 Some criticisms on the trade creation / trade diversion calculus 3.2 Winners and losers 3.3 Economic regionalism as a futile undertaking: no way out of the poverty trap? 3.3.1 Size 3.3.2 Homogeneity 3.3.3 Preference erosion 3.4 Empirics I: do RECs promote trade? 3.4.1 Regional trade volumes, shares, intensities and their development 3.4.2 The gravity model 3.4.2.1 Results of the gravity model 3.4.2.2 Factors for the variety and unreliability of the gravity model 3.4.3 Alternative methodological approaches 3.4.3.1 Panel approach 3.4.3.2 Matching estimator 3.4.3.3 REC depth differentiation 3.4.3.4 Bayesian Model Averaging 3.4.3.5 CGE: pseudo empirics or 'could' African RECs promote trade? 3.5 Empirics II: do RECs hurt their members? 3.5.1 Gravity and trade diversion 3.5.2 CGE and welfare effects 3.5.3 Finger-Kreinin index of similarity 3.5.4 ROI and RCA 3.6 Empirics III: winners and losers 3.7 Empirics IV: are African RECs ill-suited for regionalism? 3.7.1 Size 3.7.2 Homogeneity 3.7.2.1 Homogenous Africa? 3.7.2.2 A short digression: Linder or H-O? 3.7.3 Preference erosion 3.8 Empirics V: A closer look at NC aspects for the EAC 3.8.1 Computable General Equilibrium (CGE) 3.8.2 Descriptive statistics on absolute and relative trade growth 3.8.3 Finger-Kreinin index 3.8.4 Revealed comparative advantage approach 3.8.5 Disaggregated effects 3.8.6 Effects of disaggregated changes in preferential margins on relative trade growth 3.8.7 EAC: regional gains or losses? 3.8.8 EAC: winners and losers 3.9 Synopsis: The limits of regionalism or the limitations of NC approaches? 3.9.1 Empirical results 3.9.2 Insufficiency and arbitrariness of empirical instruments 3.9.3 Gains from regionalism in perspective (I): contribution to GDP 3.9.4 Gains from regionalism in perspective (II): extra-regional alternatives 3.9.4.1 North-South integration as alternative? 3.9.4.2 Unilateralism and multilateralism as better alternatives? 3.9.5 The need for looking beyond the Neoclassical Framework 4. Political economy: non-welfare oriented reasons for regionalism and implementation issues 4.1 Framing the 'stepping stone vs. stumbling block' debate: Larry Summers vs. Jagdish Bhagwati 4.1.1 Endogenous bloc formation 4.1.2 Endogenous protection 4.1.3 Institutional and negotiation aspects 4.1.4 Forgone gains vs. political feasibility – a case for 'open regionalism' 4.2 Empirics and synopsis: Regionalism and multilateralism – friends or foes? 5. Heterodox perspectives: what role for regionalism in development and structural change? 5.1 Regionalism as anti-globalism vs. regionalism as tool for structural change 5.2 Relaxed assumptions 5.2.1 Economies of scale 5.2.2 Imperfect competition and product differentiation 5.2.3 Trade costs, factor (im)mobility, diminishing returns and congestion 5.2.4 Technology, skills and (tacit) knowledge 5.2.5 Sector / goods heterogeneity and firm heterogeneity 5.2.6 Dynamism and endogeneity of factors 5.2.7 Non-clearing labour markets 5.2.8 Transaction costs 5.2.9 The importance of the short-run 5.3 Heterodox models and regionalism: catching-up and structural change? 5.3.1 Non-NC allocation effects 5.3.1.1 Love for variety 5.3.1.2 Competition-induced producer rent reductions and rent transfers 5.3.2 Levelling effects and adjustment costs in the short run 5.3.2.1 Is there a case for regionalism as a levelling force? 5.3.2.2 Is regionalism alleviating adjustment costs? 5.3.3 Location and accumulation effects 5.3.3.1 Competition and challenge-response increases in efficiency 5.3.3.2 Trade and investment: is there a case for tariff-jumping FDI? 5.3.3.3 Liberalisation and learning by doing: is there a case for infant industry protection? 5.3.3.4 Protection and competition: is there a case for regional industrial policy? 5.3.3.5 Winners and losers: is there a case for regional compensation? 5.3.3.6 Missing liberalization from the West in a dishonest debate: a case for tit-for-tat? 5.3.3.7 Limits of liberalization and creating a flat world 5.3.3.8 Trade costs vs. agglomeration: a case for regionalisation in the long run? 5.3.4 Governance effects: regionalism and governance/public spending 5.3.4.1 Regionalism as window of opportunity: does regionalism improve governance? 5.3.4.2 Signalling 5.3.4.3 Bargaining position 5.3.4.4 Regionalism and harmonisation: transaction costs and levelling the playing field 5.3.4.5 Regional public spending: regional public goods and economies of scale 5.4 Some attempts at empirical strategies for heterodox approaches 5.4.1 Literature review: heterodox empirical results and their discontents 5.4.1.1 Allocation effects: love for variety and producer rents 5.4.1.2 Levelling effects and adjustment costs 5.4.1.3 Accumulation and location effects 5.4.1.4 Governance effects 5.4.2 Heterodox effect approximations for the EAC 5.4.2.1 Regional export growth and export share growth 5.4.2.2 Directions of trade in the EAC 5.4.2.3 Sectoral disaggregation (I): CIP rankings 5.4.2.4 Sectoral disaggregation (II): Manufacturing exports and technology content 5.4.2.5 Sectoral disaggregation (III): Manufacturing exports and intra-regional trade 5.4.2.6 Sectoral disaggregation (IV): 'complexity' and diversification 5.4.2.7 Sectoral disaggregation (V): diversification and new trade 5.4.2.8 Foreign Direct Investment 5.4.2.9 Governance effects in the EAC: protocols vs. functional cooperation 5.5 Synopsis: are heterodox dynamic effects the saviours of regionalism? 6. Conclusion 6.1 Insights from and debunking of the NC framework 6.2 Insights from and debunking of the political economy framework 6.3 Insights from and current limitations of the heterodox framework Annex Bibliography

[spa] En esta tesis, a partir de identificar y describir los rasgos principales del capitalismo contemporáneo (desde 1980, aproximadamente, hasta la actualidad, julio de 2014) y de reflexionar cómo, dada su racionalidad instrumental, es capaz de alinear medios de manera altamente eficiente sin evaluar los fines, en sí mismos, que persigue, concluimos que la conformación, la fabricación del ciudadano contemporáneo, lejos de ser casual o natural, responde a las exigencias y necesidades que el propio sistema, en pos de su expansión y crecimiento, genera. Tanto en su faceta de mercancía (como fuerza de trabajo a adquirir), como en su faceta productora (en la ejecución de sus tareas y funciones) como, finalmente, en su faceta consumidora (necesaria para alimentar y acelerar el crecimiento del sistema) el ciudadano medio contemporáneo es producido por el sistema capitalista como un medio más, como un recurso más, necesario para su propia expansión. En su caracterización contemporánea el ciudadano medio es elegido y excluido por el sistema en función de su competitividad global comparada estando, en cierta manera, predestinado a su exclusión, más temprana que tardía, desde el mismo momento de su inclusión. Este proceso de inclusión y exclusión es liderado, ejecutado, en buena medida, por los sujetos caracterizados en nuestra tesis (la alta dirección de las empresas multinacionales cotizadas, representativas de la mitad del Producto Interior Bruto mundial). Específicamente, en lo que respecta a estas figuras, profundizamos en cómo son fabricadas y constituidas como mercancías de alto valor añadido completamente alineadas con los criterios, valores y carácter que el sistema capitalista contemporáneo requiere. La separación entre propiedad y gestión, la maximización de beneficios en el menor plazo, la exigida servidumbre al reino del capital impaciente apátrida y global, el cambio permanente y acelerado y, por último, la competitividad, el crecimiento y la expansión global se traducen en una serie de conocimientos, habilidades, competencias, criterios y valores con los que estos ciudadanos son global e uniformemente producidos (tanto a partir de las realidades empresariales de estas corporaciones multinacionales, de sus culturas corporativas, como, de manera más específica, en las escuelas de negocios) para estar alineados con los fines y para ser capaces de alcanzar los objetivos que el sistema capitalista contemporáneo define y necesita. En su faceta productiva, en el ejercicio de sus funciones, estos gestores son el paradigma de la instrumentalidad del razonamiento del sistema alineando medios para maximizar beneficios en el menor plazo y así tratar de mantener la competitividad global comparada que, sin duda, se les exige. En paralelo, la utilización de todos los medios a su alcance (asesores y consultores especializados) para separar el poder que atesoran de la responsabilidad que se les pudiese atribuir en función de los resultados que de sus decisiones pudieran derivarse, se convierte en una característica clave de estos gestores. En la persecución de la máxima rentabilidad todos los medios disponibles son utilizados, estén estos avalados o sancionados por otros poderes contemporáneos (legales o políticos) o por consideraciones éticas o morales. El fin que, en su condición de primeros ejecutivos de estas multinacionales deben inexorablemente alcanzar, la maximización de beneficios en el menor plazo y la expansión global del propio sistema, dada su conformación en criterios y valores, justifica cualquier toma de decisiones y/o curso de acción en su faceta ejecutiva. Como consumidores, aun a pesar de su alto poder adquisitivo y sus múltiples opciones de compra, acaban, en lo que a sus consumos se refiere, conformando un "habitus", una pertenencia fáctica al colectivo que estas figuras conforman de modo y manera que les haga reconocibles y les califique como pertenecientes a una élite que, en ocasiones, se convierte en consumidor de referencia. De manera más sintomática, se constituyen como los auténticos consumidores de otros ciudadanos mediante la toma de decisiones ejecutivas para la que han sido conformados. Se constituyen, como figuras emblemáticas que son del capitalismo contemporáneo, en la encarnación del espíritu de dicho capitalismo y en el brazo ejecutor de su expansión, quedando las posibles consecuencias de sus actos, sociales o individuales (aquellas de índole no económico ni financiero con repercusión en el corto plazo) fuera del análisis y/o de los objetivos a alcanzar. Nuestras conclusiones, que conjugan la experiencia y el conocimiento directo de estas figuras (con entrevistas en profundidad realizadas a 400 de estos gestores durante más de veinte años), una visión "desde dentro", y la reflexión filosófica, externa al propio sistema, una visión "desde fuera", nos permite caracterizar por primera vez a estas figuras y mostrar no sólo su relevancia y paradigmático e instrumental alineamiento con los criterios del capitalismo contemporáneo, sino también la dramática eficiencia y la implacable eficacia del capitalismo contemporáneo en la violenta conformación del ciudadano que el sistema necesita para su expansión, aunque ni su crecimiento ni la globalización, ni sus consecuencias, responda a unos fines que hayan sido pensados ni valorados por la instrumentalidad del razonamiento del sistema. ; [eng] In this thesis, after identifying and describing the main features of contemporary capitalism (since 1980, approximately, to present, July 2014) and after reflecting on how, given its instrumental rationality, it is capable of aligning means highly efficiently without evaluating the final objectives, in themselves, that the system itself is chasing, we conclude that the conformation, the production of the contemporary citizen, far from casual or natural, responds to the demands and needs that the capitalism, focused in its expansion and growth, itself generates. Both in his role as merchandise (such as labor force to acquire), and his production role (in the execution of their tasks and functions) and finally in the consumer role (needed to power and accelerate the growth of the system) the contemporary average citizen is produced by the capitalist system as a tool, as a resource necessary for its own expansion. In its contemporary characterization the average citizen is chosen and excluded by the system in terms of its overall compared competitiveness being, in some way, predestined to their exclusion, earlier than later, from the time of its inclusion. This process of inclusion and exclusion is led, performed, largely by the subjects characterized in our thesis (senior management of listed multinational companies, representing half of global GDP). Specifically, with regard to these figures, we delve into how they are made and constituted as high value-added goods completely aligned with the criteria, values and character that contemporary capitalism requires. The key features of this system: the separation between ownership and management, maximizing profits in the shortest possible period, the required easement to the kingdom of eager stateless and global capital, permanent and rapid change and, finally, competitiveness, growth and global expansion; translate into a range of specific knowledge, skills, competencies, criteria and values that these citizens have to have, as they are globally and uniformly produced (both from business realities of these multinational corporations, their corporate cultures, and, more specifically, in business schools) in order to be aligned with the system's goals and in order to be able to achieve the objectives defined by the contemporary capitalist system and its very demanding needs. In its productive role, in the exercise of their functions, these managers are the paradigm of the instrumentality of the reasoning of aligning means to maximize profits in the shortest period and, therefore, fighting to maintain the global competitiveness that, undoubtedly, is required from their actions. In parallel, the use of all means available (specialized consultants) to separate the power they have from the responsibility that it could be attributed to them (according to the bad results that, potentially, could appear due to their decisions), becomes a key feature in the production role of these managers. Additionally, in the pursuit of maximum returns all available means are used, regardless if they are endorsed or sanctioned by other (legal or political) powers or other contemporary ethical or moral considerations. The goal they must inevitably reach, in his role as chief executives of these multinationals, is maximizing profits in the shortest period of time and, at the same time, the overall and global expansion of the system itself. Considering their conformation, according to the criteria and values of the contemporary capitalism, their decisions, actions and their consequences are always justified according to the contemporary capitalism criteria. As consumers, even despite their high purchasing power and the multiple buying options they have, they end up, just in what their consumption is concerned, forming a "habitus", a factual belonging to the group that these figures conform. Doing so, following a not previously defined but yet existing buying pattern, contributes to make them recognizable and qualifies them as belonging to an elite that often becomes a type of "consumer of reference". More symptomatically, these figures constitute the real consumers of other citizens by executing their decision making process for which they have been produced. They are, as one of the more emblematic figures of contemporary capitalism, the incarnation of the spirit of the capitalism and the implementation arm of its expansion, leaving the possible consequences of their actions, social or individual (those with non-economic or financial nature) out of their analysis and out of the objectives and goals to be achieved. Our findings, which combine the experience with and the direct knowledge of these figures (in-depth interviews with 400 of these senior managers during the last twenty years), a vision "from within"; and a philosophical reflection, external to the system itself, a view "from outside"; allows us to characterize these figures for the first time. These combined exercises also allow us to show, not only their relevance and their paradigmatic and instrumental alignment with the criteria of contemporary capitalism, but also the dramatic efficiency and relentless effectiveness of contemporary capitalism in violently shaping the kind of citizen that the system needs for its own expansion. Although neither its expansion and growth nor globalization, nor its consequences, have been thought and evaluated by the instrumentality of the reasoning of the contemporary capitalism.

As a small and open economy, Belarus' development perspectives are intrinsically linked to its ability to produce and sell goods and services competitively in the global marketplace. While Belarus is an open economy, its trade links are concentrated both in terms of products and markets. Mineral goods –most importantly refined oil and potassium chloride - are the main export product accounting for more than 1/3 of total exports. Non mineral exports, including most importantly machinery, vehicles and transport equipment are mostly exported to Russia and other CIS markets, which account for 74 percent of non-mineral exports while the share of EU countries in Belarus non-mineral exports account for less than 15 percent. With Russia's WTO accession in 2012 competitive pressures on Belarus' major market for non-mineral exports have further intensified. As Belarus is accelerating its own negotiations with the WTO, understanding the challenges and opportunities faced by the country's exporters is critical to putting in place an effective adaptation strategy that will enhance competitiveness and ensure Belarus can take full advantage of more open market access. The objective of this note is to analyze the economic impacts of Belarus' potential accession to the WTO. The note utilizes a modern computable general equilibrium model of the economy of Belarus to simulate impacts on the economy as a whole and on individual sectors.

Evidence indicates that trade costs are a much more substantial barrier to trade than tariffs are, especially in Sub-Saharan Africa. This paper decomposes trade costs into: (i) trade facilitation, (ii) non-tariff barriers, and (iii) the costs of business services. The paper assesses the poverty and shared prosperity impacts of deep integration to reduce these three types of trade costs in: (i) the East African Customs Union–Common Market of East and Southern Africa–South African Development Community "Tripartite" Free Trade Area; (ii) within the East African Customs Union; and (iii) unilaterally by the East African Customs Union. The analysis employs an innovative, multi-region computable general equilibrium model to estimate the changes in the macroeconomic variables that impact poverty and shared prosperity. The model estimates are used in the Global Income Distribution Dynamics microsimulation model to obtain assessments of the changes in the poverty headcount and shared prosperity for each of the simulations for the six African regions or countries. The paper finds that these reforms are pro-poor. There are significant reductions in the poverty headcount and the percentage of the population living in poverty for all six of the African regions from deep integration in the Tripartite Free Trade Area or comparable unilateral reforms by the East African Customs Union. Further, the incomes of the bottom 40 percent of the populations noticeably increase in all countries or regions that are engaged in the trade reforms. The reason for the poor share in prosperity is the fact that the reforms increase unskilled wages faster than the rewards of other factors of production, as the reforms tend to favor agriculture. Despite the uniform increases in income for the poorest 40 percent, there are some cases where the share of income captured by the poorest 40 percent of the population decreases. The estimated gains vary considerably across countries and reforms. Thus, countries would have an interest in negotiating for different reforms in different agreements.

Colombia has the seventh highest Gini coefficient of income inequality in the world. The Santos Administration is aware of this challenge and has taken important steps to reduce disparities. The Government is also aspiring to join the OECD, which exhibits much lower income disparities, mainly as a result of effective policies of fiscal redistribution. In Colombia, meanwhile, direct taxes, indirect taxes, and monetary transfers hardly dent the high Gini coefficient. To reduce income inequality, Colombian policy makers could consider introducing a more progressive tax-transfer system. This paper ranks alternative inequality-reducing fiscal policy options based on their effectiveness. It argues that there are potentially important redistributive potential gains available from tax reforms if combined with good spending decisions. It presents an illustrative reform package that would be sufficient for Colombia to reach levels of inequality similar to Chile or Costa Rica in a fiscally neutral manner. Nonetheless, further analysis is needed to explore all available policy options and identify those that are best suited for Colombia.

Coffee is an ecologically and economically significant crop for Haiti. It is not only the main source of income for more than 100,000 farmers, but the coffee ecosystem also sustains a large part of the remaining tree cover (currently at less than 1.5 percent of land) of the country. This report does not aim to detail the structural constraints impacting upon the Haitian coffee sub-sector. Instead, it describes the risks affecting the existing supply chain in terms of their potential impact and prioritizes the risks and areas requiring attention for risk management, investment, and capacity building. The Haitian coffee industry is constrained by significant systemic problems which have contributed to its decline over the years. Some of these major constraints include: (1) the structure of the coffee creole garden which contributes to low on-farm coffee productivity; (2) a land tenure system which inhibits long term investment; (3) poor transportation and logistics infrastructure; (4) limited access to credit and high interest rates; (5) aging coffee trees and farmers; (6) waning government interest and support for the coffee sub-sector; (7) lack of industry level coordination; and (8) a lack of international and domestic promotion of the Haitian coffee industry.

For countries as diverse as China and Mauritius, Special Economic Zones (SEZs) have been a powerful tool to attract foreign investment, promote export-oriented growth, and generate employment; for many others, the results have been less than encouraging. While the benefits and limitations of zones will no doubt continue to be debated, what is clear is that policymakers are increasingly attracted to them as an instrument of trade, investment, industrial, and spatial policy. Since the mid 1980s, the number of newly-established zones has grown rapidly in almost all regions, with dramatic growth i

This paper analyzes the economic effects of agricultural price and merchandise trade policies around the world as of 2004 on global markets, net farm incomes, and national and regional economic welfare and poverty, using the global economy wide Linkage model, new estimates of agricultural price distortions for developing countries, and poverty elasticity's approach. It addresses two questions: to what extent are policies as of 2004 still reducing rewards from farming in developing countries and thereby adding to inequality across countries in farm household incomes? Are they depressing value added more in primary agriculture than in the rest of the economy of developing countries, and earnings of unskilled workers more than of owners of other factors of production, thereby potentially contributing to inequality and poverty within developing countries (given that farm incomes are well below non-farm incomes in most developing countries and that agriculture there is intensive in the use of unskilled labor)? Results are presented for the key countries and regions of the world and for the world as a whole. They reveal that, by moving to free markets, income inequality between countries will be reduced at least slightly, all but one-sixth of the gains to developing countries will come from agricultural policy reform, unskilled workers in developing countries the majority of whom work on farms will benefit most from reform, net farm incomes in developing countries will rise by 6 percent compared with 2 percent for non-agricultural value added, and the number of people surviving on less than US$1 a day will drop 3 percent globally.

Máster Universitario en Ingeniería Industrial ; El objetivo principal del documento es presentar las tendencias y características actuales de la industria de la automoción, y con foco en los fabricantes de componentes, entender la importancia de la competitividad e identificar y cuantificar los factores críticos de éxito que les permitirían obtener una huella industrial competitiva, en este caso, en el sector de estampación en caliente. La industria de la automoción es un pilar clave para la economía global, pues representa un 3% de PIB mundial, y contribuye enormemente a la creación de puestos de trabajo, desarrollo industrial y fomento del I+D. Dentro del sector, los fabricantes de componentes se están convirtiendo gradualmente en un elemento clave en la elaboración de valor añadido, dado que la producción de vehículos se está haciendo progresivamente más compleja y su integración en la cadena de valor es crítica. OEMs, fabricantes de componentes y el sector en general han disfrutado de un periodo de crecimiento y rentabilidad relativamente alto desde la recesión en 2008 y 2009. No obstante, la industria está empezando a enfrentarse a una serie de retos que seguramente condicionen sus ingresos, siendo de especial relevancia los retos en materia de reducción de costes, peso y regulaciones. El afán por la reducción de costes y peso obliga a los OEMs y resto de fabricantes a prodcir coches cada vez más ligeros, económicos y que cumplan con las regulaciones medioambientales y de seguridad. Por este motivo, la carrocería y el chasis se vuelven elementos clave, pues representan casi un 40% del peso de un vehículo, y se estima que albergarán el 15% de la inversión necesaria para cumplir con los objetivos de eficiencia energética. Con el objetivo de fabricar componentes ligeros, la industria ha desarrollado una serie de tecnologías y materiales para remplazar el tradicional acero dulce. Entre ellos, destacan los aceros de ultra alta resistencia (UHSS) y de estampación en caliente, y el aluminio y los composites. El uso de estas dos últimas tecnologías, a pesar de ofrecer las mayores reducciones de peso, no ha sido ampliamente extendido, dado que aun suponen un coste de fabricación muy alto. Dada la competitividad y relevancia del sector, este documento se centra en una de estas tecnologías de innovación, la estampación en caliente, y trata de generar valor mediante la identificación y cuantificación de los factores críticos de éxito que ofrecerían una ventaja competitiva sostenida. Como respuesta al crecimiento global de la industria, los fabricantes de componentes han expandido sus operaciones, y la optimización de su huella industrial es clave de cara a convertirse en competidores feroces. Si este documento se quedase en el plano descriptivo, su utilidad sería limitada. Por ello, la influencia de las palancas identificadas y su impacto sobre el coste total de fabricación se han cuantificado a través de un modelo de costes. El modelo identifica los principales factores de costes y destaca una serie de iniciativas potenciales para la mejora del rendimiento, que son contextualizadas en el marco de un caso práctico. Para llevar a cabo esta tarea, se desarrollan los siguientes análisis: Caracterización del sector de la automoción y los fabricantes de componentes Papel de los componentes de carrocería y chasis Entorno competitivo en carrocería y chasis Identificación y evaluación de los factores críticos de éxito para la competitividad de una planta de estampación en caliente Modelado de la competitividad mediante un caso práctico Caracterización del sector de la automoción y los fabricantes de componentes El sector de la automoción constituye una palanca básica para el progreso económico y la estabilidad, y fomenta el desarrollo tecnológico en países desarrollados y en vías de desarrollo. El gran crecimiento en los últimos años ha ayudado a la industria en la creación de puestos de trabajo, recaudación de impuestos y desarrollo industrial. La producción desde la recesión ha crecido con una tasa compuesta anual de 8,3%, especialmente favorecida por el crecimiento del mercado chino y la recuperación de los mercados europeos y americanos. La rentabilidad desde 2009 ha sido relativamente más alta para los fabricantes de componentes, especialmente aquellos enfocados en neumáticos y sistemas de propulsión, y aquellos centrados en innovación de producto. A pesar del crecimiento experimentado en años previos, el sector afrontará una serie de retos que condicionarán futuras rentabilidades. Las OEMs y resto de fabricantes se enfrentarán a una intensificación de la complejidad y la reducción de peso y costes, un movimiento continuado del centro de gravedad hacia mercados emergentes, un incremento de la demanda digital y un cambio en el panorama de la industrial, requiriendo una mayor porción de valor añadido por parte de los fabricantes de componentes. Papel de los componentes de carrocería y chasis Los retos en materia de reducción de coste y peso que afronta la industria guían hacia la fabricación de componentes más económicos, ligeros y conformes con las regulaciones medioambientales y de seguridad. Con el fin de lograr este objetivo, los componentes de carrocería y chasis juegan un papel clave pues representan casi el 40% del peso del vehículo y se espera que acaparen un 15% de la inversión necesaria para alcanzar las metas de eficiencia de combustible. Con el objetivo de fabricar componentes ligeros, la industria ha desarrollado una serie de tecnologías y materiales para remplazar el tradicional acero dulce. Entre ellos, destacan los aceros de ultra alta resistencia (UHSS) y de estampación en caliente, y el aluminio y los composites. El uso de estas dos últimas tecnologías, a pesar de ofrecer las mayores reducciones de peso, no ha sido ampliamente extendido, dado que aun suponen un coste de fabricación muy alto. Los UHSS y aceros de estampación en caliente ofrecen límites elásticos significativamente más altos con una reducción en peso del 20%, y un incremento de los costes de facturación del 15%. El aluminio por su parte, que necesita ser aleado para su uso en elementos estructurales, ofrece una reducción de peso del 40%, además de una alta reciclabilidad y reducción de las emisiones. Los composites ofrecen una reducción de peso aún mayor, 50%, y una reducción de la complejidad de fabricación. No obstante, están tecnologías suponen un incremento de coste del 30% y 47% respectivamente. Entorno competitivo en carrocería y chasis El mercado de la carrocería y chasis está dominado por pocos actores que han logrado el liderazgo a través de una cobertura global y una amplia línea de productos. Dentro del sector de estampación, destacan Cosma (empresa de Magna International), Gestamp Automoción, Benteler Automotive y Tower International. Presentan unos ingresos en el rango entre 2.000 y 8.000 millones de dólares, y tienes unas rentabilidades operativas del 10% de margen de EBITDA de media. A pesar de la existencia de muchos pequeños competidores locales con foco en una región específica, y la internalización de la actividad por parte de algunas OEMs, el sector está tendiendo hacia la consolidación, y los sectores de carrocería y chasis representan un 40% de toda la actividad de fusiones y adquisiciones en la industria de la automoción actualmente.Identificación y evaluación de los factores críticos de éxito para la competitividad de una planta de estampación en caliente Como ya se ha manifestado, el sector de carrocería y chasis, y más concretamente, de estampación en caliente, es altamente competitivo, por lo que la identificación de los factores críticos de éxito para la competitividad se vuelve un aspecto clave. El sector de la automoción se ha convertido en una industria global en las últimas décadas, lo que ha llevado a los fabricantes a expandir sus operaciones y tratar de optimizar su huella industrial. Por ello, una de las vías para lograr convertirse en un competidor feroz y llevar a cabo una estrategia difícilmente imitable por competidores es mediante el desarrollo de una huella industrial feroz. Los cuatro factores críticos de éxito identificados para la obtención de una huella industrial competitiva incluyen: Alto conocimiento tecnológico sobre el proceso de estampación en caliente, productos, materiales… Se ha llevado a cabo una profunda investigación de cara a la definición propiedades de los materiales, procesos, maquinaría y alternativas potenciales, además de la amplia gama de posibles productos estampados en caliente y la demanda creciente que afronta la tecnología Una ubicación estratégica que permita beneficiarse de producción JIT con el cliente, un suministro de materias primas apropiado y un coste logístico reducido La proximidad a la planta de ensamblaje del OEM afecta positivamente tanto a funciones 'hard' como JIT y costes logísticos, como funciones 'soft' como imagen y choque cultural. Además, diferencias potenciales en el precio de materias primas se pueden explicar parcialmente con la ubicación y su influencia en los factores de coste Una mano de obra adecuada, que muestre un balance correcto entre coste de personal, capacidades, productividades y educación Se ha desarrollado un análisis detallado sobre la variación de las características de los trabajadores del sector entre países, y su impacto en las diferencias de coste y rendimiento Alta eficiencia operativa basada en técnicas lean y buenos rendimientos en términos de OEE y TPM Se presentan los grandes beneficios de una estrategia de OEE y TMP y más particularmente, comparativas de estampación en caliente con tecnologías alternativas Modelado de la competitividad mediante un caso práctico Si este documento se quedase en el plano descriptivo, su utilidad sería limitada. A través del diseño de un modelo para cuantificar el impacto de los factores de competitividad identificados, se logra construir otra perspectiva desde un caso práctico real. El caso define un fabricante de componentes de estampación en caliente, que debe fabricar la producción de pilares B para un OEM desde una de sus plantas. Para averiguar cuál de sus ubicaciones ofrece la mayor competitividad de costes, el modelo ofrece un desglose de costes detallado, y estudia los principales palancas de coste de cada planta a la luz de los factores de de éxito identificados. El modelo y su aplicación a un caso práctico son de gran utilidad de cara a subrayar iniciativas de mejora, y su impacto en coste y rendimiento. Propone una serie de medidas que logran una mejora del OEE de 11pp y una reducción del 50% de los costes de mantenimiento, en materia de capacidad y organización de la planta; establecimiento de estandarización del trabajo, 5S y gestión visual; reducción del mantenimiento no planificado de maquinas y herramientas; y eficiencia y consistencia transiciones mediante SMED. Asimismo, la aplicación de un caso práctico permite evaluar el rendimiento en fabricación desde un punto de vista de financiación, e incluir conceptos como margen operativo, coste de capital y retorno de la inversión anual medio. Por último, su uso también permite llevar a cabo análisis de sensibilidades y evaluar el impacto de otras capacidades de tipos soft como coordinación, impacto cultural e imagen. Conclusiones Los primeros aspectos más analíticos del documento otorgan un entendimiento de la situación actual y los retos que afrontan OEMs y fabricantes de componentes, y subraya la relevancia que los componentes de carrocería y chasis juegan de cara a conseguir los objetivos de reducción de costes y peso. Asimismo, sirve como una introducción de las características de estos componentes, y recalca la importancia de la competitividad. No obstante, el mayor valor añadido del documento recae sobre la identificación y cuantificación de los factores críticos de éxito que permiten a una planta de estampación en caliente obtener una huella industrial feroz. Mediante este análisis, se definen las palancas más importantes para hacerse competitivo. Por un lado, se describen en detalle factores ajenos y no controlados por los fabricantes como las características de la mano de obra, costes logísticos y de materias primas…Una descripción tan detallada pretende ser de utilidad para fabricantes de cara a decisiones sobre su huella industrial. Por otro lado, se realiza un profundo examen de la tecnología, con enfoque en materiales, procesos y productos y sus alternativas, y una definición de las reglas que ofrecen una excelencia operativa y de mantenimiento. Por medio de estas palancas, se identifican claras iniciativas para la mejora del rendimiento y la competitividad de costes. Además, la aplicación de estos factores de éxito identificados en un caso práctico permite la contextualización en un escenario de fabricación real. La definición del modelo de costes ayuda a ilustrar el impacto de estas palancas sobre el coste total, y su influencia de cara a la mejora de la competitividad. La cuantificación de estas medidas, asimismo, permite la aplicación de evaluaciones de tipo financiero y análisis de sensibilidad. ; The main goal of the document is to present the trends and circumstances that the automotive industry is currently experiencing, and with focus on the supplier sector, understand the importance of competitiveness and identify and quantify the critical success factors that would provide a component manufacturer, in this case, in hot stamping, with a ruthless manufacturing footprint. The automotive industry is a main pillar for the global economy, accounting for 3% of the world's GDP and heavily contributing to job creation, industrial development and fostering of R&D. Within the sector, component manufacturers are gradually becoming a key element towards value addition, as vehicle production is becoming increasingly complex and integration of suppliers within OEM's value chain is critical. OEMs, component manufactures and the sector as a whole, have been enjoy a period of relatively strong growth and profitability since the recession in the 2008-2009 period. Nevertheless, the industry is starting to face a series of challenges which will definitely condition their future returns, especially meaningful regarding cost-pressure, weight and regulations. This intensification of cost-pressure and weight focus forces OEMs and suppliers to manufacture increasingly light-weight vehicles, that are cost-effective and comply with environmental and safety regulations. For this purpose, body in white and chassis components become critical, as they represent almost 40% of a car's weight, and it is expected that 15% of the investment towards achieving fuel efficiency goals will rely on them. In order to tackle the need to produce light components, the industry has come up with new technologies and materials to replace traditional mild steel which allow for a significant weight reduction. These innovative materials encompass Ultra High Strength Steel (UHSS) and hot stamped steel, and aluminium and composites. These last two technologies, although offering the highest weight reduction, are still under development and their high manufacturing costs hinder their general expansion. Given the relevance and competitiveness of the sector, this document focuses on one of these innovative technologies, hot-stamping, and generates value by identifying and quantifying the critical success factors that would provide a hot stamping manufacturer's plant with a sustained competitive advantage. As a result of global growth, suppliers have had to expand its operations, and in order to tackle future industry challenges, manufacturers must search to become ruthless competitors by means of an optimized footprint. If this document just held on to a descriptive level, the utility of it would be limited. Therefore, the influence of the identified levers and their impact on overall manufacturing costs are quantified through a cost model. The model identifies the main cost drivers and highlights potential performance improvement initiatives, which are then contextualized through a case study. In order to carry out this task, the following analysis will be developed: Characterization of the automotive and supplier industry Role of body in white and chassis Competitive landscape in the body in white and chassis stamping sector Identification of success factors for the competitiveness of a hot stamping plant Modelling of competitiveness through a case study Characterization of the automotive and supplier industry The automotive industry constitutes a main driver of macroeconomic expansion and stability, and forces technological advancement in both developed and developing countries. Its strong growth in past years has allowed the industry to robustly contribute to job creation, government revenue and industrial and research development. Production since the recession has grown with a 8,3% CAGR, especially pulled by the growth in the Greater China market and the recovery of Europe and North America. Profitability since 2009 have been relatively higher for component manufacturers, especially those focused on tires and power train, and enhancing product innovation. Despite the growth experienced in previous years, the sector will encounter a series of challenges which will condition future profitability. OEMs and suppliers will encounter an intensification of complexity, cost-pressure and weight focus, they will experience a shift of the centre of gravity towards emerging markets and an increase in the digital demands, and they will face a change in the industry landscape, as component manufacturers will be required to add increasing value to the final product.Role of body in white and chassis The challenges regarding cost pressure and weight faced by OEMs and component manufacturers forces the industry to produce increasingly lighter cars, which are cost effective and meet environmental and safety regulation. Towards achieving this goal, a car's body in white (BIW) and chassis play a critical role as they account for almost 40% of the vehicle's weight, and are expected to require 15% of the investment needed to accomplish the fuel efficiency targets. In order to tackle the need to produce light components, the industry has come up with new technologies and materials to replace traditional mild steel which allow for a significant weight reduction. These innovative materials encompass Ultra High Strength Steel (UHSS) and hot stamped steel, and aluminium and composites. These last two technologies, although offering the highest weight reduction, are still under development and their high manufacturing costs hinder their general expansion. UHSS and hot-stamped steels allow offer significantly higher yield strengths with a 20% weight reduction, while increasing manufacturing costs by 15%. Aluminium, which needs to be alloyed to be used in structural components, besides reducing 40% weight, offers high recyclability and emission reduction. Composites offer even further weight reduction, 50% and reduced manufacturing complexity. Nevertheless, these technologies respectively increase manufacturing costs by 30% and 470%. Competitive landscape in the body in white and chassis stamping sector The body in white and chassis market is dominated by a few players who have achieved leadership through global coverage and breath of capabilities. Within the stamping sector, Cosma (company of Magna International), Gestamp Automoción, Benteler Automotive and Tower International are the largest competitors. They present revenues ranging from 2.000 to 8.000 million dollars, and have an operational efficiency averaging 10% EBITDA margin. Although there are many local players present with focus only on a certain region, and some OEMs internally develop stamping activities, the industry is turning towards higher consolidation, as body and chassis account for 40% of all the current M&A activity in the industry. Identification of success factors for the competitiveness of a hot stamping plant As it has been highlighted, the stamping of body in white and chassis, and more precisely, hot stamping, is highly competitive, which makes the identification of competitiveness success factor very important. The automotive industry has become a greatly global industry in the past decades and hence, automotive suppliers have had to expand their operations and try to optimize their manufacturing footprint.Therefore, one of the ways an automotive supplier could become a ruthless competitor and build up a strategy that wouldn't be able to be imitated by its competitors is by developing a ruthless footprint. The four identified critical success factors to achieve footprint competitiveness encompass: The technological know-how of the hot-stamping processes, products, materials. Research is carried out in order to define material properties, processes, machinery and future developments, as well as the wide range of products possibly manufactured with hot stamping and the increasing demand faced by the technology. A strategic location that would allow benefiting from Just in Time (JIT) production with the customer, appropriate raw material sourcing and reduced logistic and shipping costs Proximity to OEM plant is proved to positively affect both hard features like JIT and shipping costs and soft features like image and cultural impact. Besides, potential raw material price difference are partially explained by the location and its influence on cost drivers An adequate work-force, which shows a successful balance of personnel cost, skills, productivity and education. Detailed analysis performed evidences how worker characteristics vary along different countries and can explain cost and performance differences High operational efficiency based on lean techniques and good Overall Equipment Effectiveness (OEE) and Total Productive Maintenance (TPM) performances Presentation of the vast benefits enhanced through the implementation of OEE and TPM strategies together with benchmarks on hot stamping and other comparable technologies Modelling of competitiveness through a case study If this document just held on to a descriptive level, the utility of it would be limited. By means of designing a model to quantify the impact of the identified competitiveness success factors, it allows to build a further perspective, a real case scenario. The case study defines a supplier of hot stamping components, which must manufacture the Bpillar production for a vehicle from one of its plants. In order to find out which location offers the biggest cost competitiveness, the model illustrates detailed cost breakdowns and studies the main cost drivers in each plant in light of the identified success factors. The model and its application to a case study are very useful in order to highlight improvement initiatives, and their potential impact on cost and performance. It proposes a series of initiatives which prove to achieve an 11pp OEE increase and a 50% reduction in maintenance costs, regarding the fields of plant capacity and organization improvement; establishment of standard work, 5S and visual management; reduction of unplanned machine and tool maintenance; and efficiency and consistency of changeovers through SMED. Furthermore, the application to a case study allows to contextualize manufacturing performances within a financial evaluation and to come across with concepts such as operational profit, required cost of capital and average annual ROCE, which in the auto-component industry are standardized to be >12%, 8,1% and >15% respectively. Finally, the employment of a model allows to carryout sensitivity analysis and to evaluate the impact of other potential soft skills such as coordination, culture impact or image. Conclusions The first analytical topics of the document grant an understanding of the current situation and challenges faced by OEMs and suppliers, and highlight the big relevance that body and chassis components will have towards achieving cost and weight reduction goals. Furthermore, it serves as an introduction on the characteristics of the BIW and chassis components and technologies, and remarks the importance of competitiveness. Nevertheless, the biggest value addition of this document mainly relays on the identification and quantification of the success factors that make a hot stamping plant achieve a ruthless footprint. Through this analysis, the most important levers towards becoming competitive are defined and evaluated. On the one hand, the situation of outside and uncontrolled conditions such as country labour characteristics, shipping costs and raw material cost drivers are described in depth. Such detailed description intents to be positively valued by manufacturers before leveraging and deciding on their footprint decision. On the other hand, in depth research of the technology, with focus on materials, processes and products, and their alternatives, and definition of rules towards achieving excellent operational and maintenance performances are defined. By means of these levers, clear and detailed initiatives are proposed to improve performance and become more cost competitive. Moreover, the application of these identified success factors in a case study allows contextualizing them within a real manufacturing scenario. The definition of a cost model helps to illustrate the impact on overall cost of the identified levers and their influence towards competitiveness improvement. The quantification of the impact of the success factors allows, furthermore, to apply financial evaluations and sensitivity analysis.

Master in the Electric Power Industry ; The project context is the energy poverty. This theme is very actual and has a lot of social repercussion nowadays as electricity and gas price volatility has affected too many humble people in Europe. People, governments and utilities are becoming more and more aware of the magnitude of the penetration of energy poverty in the society and the efforts to reduce it have never been as many as now. The energy services are essential for a country, for its development and the welfare of its population. For example, electricity consumption is strongly related with the GDP growth of a country. The main energetic vectors that concern the energy poverty are the access and consumption of electricity, gas and heat water. These energy vectors are essential to have a decent household habitability. Despite so, it is estimated that 1.2billion people still do not have to electricity. These people are distributed mainly over Africa and Asia and with a higher proportion in rural areas. Two important figures to have in mind are that 17% of global population do not have electricity and 38% of global population do not have cooking facilities. There are two essential parts concerning the energy poverty, the energy access and the energy consumption, i.e. people not having the opportunity to consume electricity, gas or heat water because the grid is not developed to meet them, and the people who despite having the connection cannot consume because they are not able to pay for the cost of the consumption. In the case of Spain, geographical target of this study, the energy access is universal and is considered as a solved issue and the energy poverty was thought to be linked with the economic crisis despite it existed before too. The reality of the energy poverty has motivated and maintained the community doing studies around the topic despite the difficulties due to the little resource availability. To promote an effective and useful debate about the different possible solutions, to identify and imply the different agents and actors including the public administrations, the media, the energy utilities and the political parties among others. The objective of the study is to calculate the basic energy consumptions in Spain under different scenarios. These consumptions will be used to develop and analyse projects and strategies to mitigate the energy poverty. To achieve so, there are many variables that have to be determined and studies for different scenarios to study the energy needs to meet a worthy habitability in order to keep the household heated during the winter and cooled during the summer, to have energy to cook and do the normal living. So, the project's main objective is the development of a tool to compute different energy poverty scenarios and quantify in monetary terms the subsidies that would be needed to cover the problem break down into autonomous communities, provinces and rural and urban area. There must be a distinction between the water, electricity and gas expenses taking into account the different demands and consumes of the different regions in Spain. The program has been developed in Excel due to the simplicity of the programming and the capacity to be easily extended during and after the project. In the excel tool there are many freedom degrees in order to let the user create cases regarding its needs. For this purpose, there have been added especially modifiable quantities marked in pink in the general data sheet. These variables are: Water consumption: the frequency and quantities of water consumption can be modified in order to create different water consumption profiles. Cooking frequency: the number of cooks per week can be modified to adapt it to the case of study desired. Television and computer: the frequency and hours can be modified to create different consumption profiles. Fixed cost of water: due to the fact that it was too complex to take into account each water supply company, the different bills have been simplified with a variable term plus a fix term as it was explained before. The fixed term depends on the company and thus has been let free to change as a variable of the case. Electricity contracted power: contracted electricity power. Normally with a contracted power of 3.3kW of electric capacity is enough to cover the peak demand, but the term has been let variable to generate different cases. Electricity price: the electricity price is very volatile depending on the weather, costs of fuel etc. It is interesting to see how its different prices may affect energy poverty and quantify it. Social bonus: the social bonus is already acting and thus, it has been let free to be able to quantify the energy poverty with and without its effect. Size of the household: the size of the household is modifiable; for the base case the size has been extracted from the minimum habitability cellule, but it has been let free to generate different cases. The size of the household is directly related to the heat and air conditioning consumptions. Heating coefficient: gives the percentage of the heated surface of the household in the optimal case. For the base case, it is only considered to have 20m2 of heated surface. Air conditioned surface: gives the possibility to modify the air-conditioned surface to create new scenarios or compute its effect. Percentage of energy poverty to cover: gives the possibility to adjust the percentage of the households that is under energy poverty whose energy expenses are going to be take into account to be covered. Gas penetration coefficient: this coefficient affects the hypothesis of the gas penetration. Let it in 0 the penetration of the gas is only in the urban areas, but if it is higher than 0 there exist buildings with gas in the rural areas. This tool allows the creation of new scenarios and is interesting to see how the gas penetration affects energy poverty. Energy efficiency factor: this factor can take values from 0 to 5. If 1, then the efficiency is the one extracted from the studies and used in the base case. If 0, all the buildings are considered old and thus, with bad efficiency characteristics. The higher the value, the higher the proportion of new buildings with better efficiency characteristics. It is essential to mention another useful tool used to show the results in a summarized way. The map of Spain with the different provinces also developed in Excel allows to show the values of anything, for example, demands, water cost, electricity costs, etc. in a simple way. [Source: Blog "Análisis y decision." http://analisisydecision.es/nuevo-y-muy-mejorado-mapa-de-espana-por-provinciascon- excel/] Given the base case consumption profile and hypothesis, and having the actual image of Spain in terms of distribution of population in rural and urban areas, the gas penetration, the population of the different cities and provinces and the reference demands, the expenses that the State should dispose in order to cover the total of the energy vulnerability should be the ones shown in the table below. Given the absence of direct policies to combat energy poverty by the central government beyond this incomplete social bond, it is at the regional and municipal levels that we find the most relevant initiatives. We highlight the case of the Generalitat of Catalonia that, for just over a year and a half, is working with the central government in relation to a regulation on energy poverty. This work aimed to establish a winter truce between November and March, both included, so that the energy supply (water, electricity and gas) would not be interrupted to families in vulnerable situation. The Social Inclusion Plan of the Government of Andalusia includes an Extraordinary Program for vital minimum supplies and social emergency benefits. The program is endowed with 6.5 million euros and will be carried out through transfers to municipalities. Specific costs are considered to cover basic energy supplies, electricity costs and expenses related to water supply. On the other hand, the budget in the Basque Country includes a budget of 200,000 euros to cover the needs of families who cannot cope with energy bills, although the mechanisms for allocating this item have not yet been defined. It is important to note that this is in addition to social emergency aid, which includes energy bills by law. Finally, the Xunta de Galicia has just launched the second call for its social electric ticket with a budget of 1.5 million euros. The aid, which is requested for half-year, is 180 euros for families with one or two children (under 18 years) and 300 euros for large families. As it can be seen, the actual measures are insufficient. It has to be taken into account that the numbers shown in the previous table are the sum of the expenses for all the vulnerable consumers, and not only the ones suffering energy poverty. In addition, it has to be mentioned that finally not all the people under energy poverty would ask for the aid due to lack of information etc. Analysing in further detail the two existing measures regarding direct payments to cover energy invoices: The Basque Country only destinies 200.000€ to fight the energy poverty. The amount calculated for the vulnerable consumers is 19.2 million euros per year for all the electricity and gas consumptions but taking into account all the vulnerable consumers. Despite this number is overestimated because not all the vulnerable consumers will suffer from energy poverty and neither all of them will ask for the aid, the amount designated is considered lower than the real amount needed. The Xunta de Galicia designates 1.5million euros to fight the energy poverty in the electricity and gas concepts. The calculated amount to cover the energy vulnerable consumers in Galicia is around 20 million euros per year. As in the above case, this includes all the expenses in electricity and gas taking into account all the vulnerable population of Galicia. The amount is small compared to the needs because estimating with the energy poverty percentage the amount needed is around 10 million euros. Finally, it is important to point out that the payment of the unpaid invoice does not solve the root problem, it merely alleviates a situation of vulnerability which, with few exceptions, is not only a temporary problem of the home, but a chronic situation in time. For this reason, it is thought that this type of measures must be accompanied by other measures of greater depth that allow to mitigate Energy poverty. However, it must be realized that certain situations of social urgency require funds to be allocated to measures that, although mitigating, are those that can be implemented more quickly and those that allow an emergency to be dealt with immediately.

Robert Wade on Zombie Ideas, Being inside the World
Bank, and the Death of Ethics in Economics after the Marginal Revolution







The global
economy is at the core of some of the main issues in contemporary International
Relations. But how do we understand the global economy and what impact does
that have on how we deal with the power politics around it? A fault line seems
to have emerged between those who take economic theory seriously and those who
denounce it for being part of the problem. Informed by his training as an
anthropologist, Robert H. Wade—professor at the LSE—takes a different tack: he
bases his engagement with the way in which Adam Smith has been appropriated to
advocate for a dominant view of 'free markets' on real-world economics and in-depth
accounts of insiders. In this Talk,
Wade—among others—discusses experimentation in international economic
regimes, why the International Financial Institutions don't fight economic
crises, and the powers and perils of being inside the World Bank.




Print version of this Talk (pdf)




What is,
according to you, the biggest challenge / principal debate in current
International Relations? What is your position or answer to this challenge / in
this debate?



If we'd reframe
your question as being more broadly about global studies, I think that one of
the really fundamental questions is how and why it is that the precepts of neoliberalism
have penetrated into every nook and cranny of Western societies, and have
penetrated to a very large extent many non-Western countries.



This has
happened especially, but not only, through the agency of the IMF and the World
bank, which have imbued these neoliberal principles; through the mechanism of
graduate education: children of the elites in developing countries go out to
American, British, other Western universities, and they learn that this is
'true' economics, or 'true' IPE, or 'true' Political Science, and then they
come back and implement these same principles and make them a reality back
home. But across the globe, this even holds for the Nordic countries. In
Iceland and other Nordic countries, from the 1980s, networks of people sharing
a belief in neo-liberal precepts, began to form and sort of place each other in
key positions within the state, and in politics, and built a momentum in this
direction. These precepts have become understood as just natural, as in
Margaret Thatcher's 'there is no alternative'.



I live in the
UK, and the great bulk of the British public really does believe that the
government is just like a household writ large, and the same rules of budgeting
that apply to the household should apply to the state. That when times are
tough the household has to tighten its belt, cut back on spending, and it is
only fair that the government does the same, and if the government does not, if
the government runs a deficit in hard times, then the government is being
irresponsible. And this is a completely mistaken and pre-Keynesian idea, but it
is a 'zombie idea'—that is, however much arguments and evidence may be mounted
against it, it just keeps coming up and up and up, and governments come to
power riding on this zombie idea and a flotilla of related ideas.



The persistence
of this zombie idea is all the more amazing as we just had a global financial
crisis in 2007/8, which would prompt a rethinking of these ideas. But these
neoliberal precepts have been, if anything, more strongly reinforced. In
previous hard times—and obviously the 1930s depression is the exemplary
case—there has been a stronger move towards, what you could call, social
democratic precepts. But not this time! Indeed, even after the crisis, the
whole of the European Union with 500 million people is even more thoroughly structured
on the basis of these ideas. I am thinking of what is popularly known as the Fiscal Compact signed by the EU Member States in 2012, which commits all governments
to balance budgets all the time—that is, first, the structural deficit may not
rise above 0.5 percent of GDP. Second, the public debt may not rise above 60
percent of GDP. Third, automatic financial sanctions are levied on governments
that exceed these two thresholds. Fourth, the whole procedure is supervised by
the European Commission, and this is presented as in the name of sound
budgeting. This package is presented as justified by the proposition that
government is a household writ large. The most elementary principles of
Keynesian macroeconomics show why this is not simply mistaken, but a disaster,
and will keep generating recessionary pressures. It is sold as a kind of excuse
for avoiding to put in place the essential conditions for the monetary union,
namely, a common budget and a sizable transfer mechanism to the regions just as
exists in the United States. But they do not want to do that, but still they
call this agreement 'cooperation', which is all about not cooperation, but
about writing these dictates around this zombie idea written into the very
basic architecture of the EU. Beyond EU politics, it materializes all the way
down to, I don't know, the function of the privatization of the Post Office, it
goes all the way down to the sort of capillaries of how universities are run,
and the incentive systems that have placed upon academics, and there is very
little pushback. The one reason, why I am almost completely delighted about
Jeremy Corbyn's election as the leader of the Labour party, is that this is one
small case of where there seems to be some concerted pushback against these
zombie ideas. The point being that the established Labour party basically
bought into this whole set of neo-liberal ideas. It combined maintaining the
overall structure of inequality in society with more emphasis on providing some
help to the poor, but they had to be hardworking poor.



Yet, one knows
that there can be dramatic changes in the prevailing zeitgeist of norms. One
knows that there can be big changes in the space of a few decades and the
question is can one imagine a scenario in which they might be a big change in
norms back to a more kind of social-democratic direction. So where will this
take place? Because of technological change in the labor market, there is a
real big crisis of employment with many middle-class jobs cut out and
polarization in the labor market. This might then induce a political movement
to have a much bigger change in income distribution than anybody with power is
now talking about. Talk of re-distribution these days is really almost entirely
around redistribution through the state, but the point I would make is that if
there is to be any significant reduction of inequality, especially inequality
at the top, there has to be more attention to changes in market-income
distribution.



Let me explain. The
share of profits in national income has been going up and the share of labor
income has been going down. So we should harness the shareholder structure of
the market to affect a more equal income distribution by enabling a much wider
section of the population to buy into the profit share. At the moment the
profit share goes to senior executives and equity holders, but equity holders
are highly concentrating at the top of the income and wealth distribution. If
equity earners could be spread much more equally, then a much wider section of the
population would get income, while they sleep so to speak. We could institute
something like trusts, whose members could be the employees of a company, the
customers, the neighbors of the company, and the trust would borrow on capital
markets and take out insurance against the repayment of the lending of loan and
then it would buy shares, it would use that borrowed money to buy shares in the
company, and the company would pay out dividends on the shares and then that
dividend income coming out of profits would be distributed to the members of
the trust. That would be a way of getting the rising share of profits in
national income distributed out to the population at large. I particularly like
this metaphor of "earning income while you sleep", since at the moment it is
only the rich people, who are earning income while they sleep. Somehow that facility
of earning income while you sleep has to be made much more widely and available—by
using the market against itself, so to speak.





How did you arrive at where
you currently are in your thinking about International Relations?



I suppose the starting point was really this; my
father was a New Zealand diplomat, so we moved quite often. By that time I was
twelve my parents were posted to Colombo, Ceylon as it was called then. After
having lived just in Western countries, I suddenly encountered at this very
formative age Colombo and Sri Lanka. I was just amazed by that experience; by
the color, the taste, the exoticness, but I was also very struck by how the
many boys at the same age as me, were walking around with no shoes. I particular
remember this boy carrying a baby on his shoulder, the baby looked half-dead
and covered in scabs, and I think it was then I got the idea of just how
unequal the world was. Then at university I studied economics, but I also
visited my parents in Kuala Lumpur, Malaysia and I got another sense of that
great disparity in wealth and living standards. At this time I had come across
Adam Smith and the wealth of nations question and that helped to encapsulate or
to crystalize my interests. So I wanted to go the Institute of Development
Studies in Sussex and  got enrolled for a
PhD in economics, but en route I spent several weeks in India and during that
time I began to dwell upon just how boring and how useless everything I studied
under the name of microeconomics. I kept thinking of these dreadfully dry
textbooks of marginal cost curves and marginal revenue curves and utility function
and difference curves etc., which I had forced myself to sit exams in. By this
time I had done a little bit of fieldwork, living on Pitcairn Island in the
middle of the Pacific.



When I got back to Sussex after fieldwork I announced
that I wished to not do a PhD in economics, but to do one in anthropology
thinking all the time, that this would actually be more use for understanding
why for example India, where I had been, was so very poor. So that's what I did:
a PhD in anthropology… In some ways I regard that as having been a mistake,
because the sort of mainstream of anthropology is very far away from the Adam
Smith questions. Having done the degree in anthropology, pretty soon I began to
change direction and pay much more attention to the state, to the state
bureaucracy. I went to India and I studied the Irrigation Department and other
related departments. I went to South Korea and I studied state irrigation
agencies and I went to Taiwan and I studied the state more broadly. So I was
kind of moving up from my Italian village, moving kind of up the scale in terms
of state agencies and then the state as a whole.



Then I went to work for the World Bank in the 1980s and
my main reason for doing that was not to do the research the World Bank wanted
me to do, but rather to study the World Bank from the inside as fieldwork. If
in some ways switching to anthropology was a mistake, in other ways it was not,
because I approached those kind of Wealth-of-Nations-questions in a way very
different from how economists approached them. For example when I went to
Taiwan and studied the trade regime, the first thing I did was to go and talk
to people who operated through the trade regime, whereas I noticed that the
published works by economists celebrating Taiwan's free trade regime was based
on what the rules said and what certain government officials told them was the
case. They had never actually talked to
people who traded through the trade regime. If they would have, they would
have learned about all the covert controls that went on such that there was
quite a distinction between the liberal face of the trade regime and the
reality of the trade regime. The reality was that the government was managing
trade in line with industrial policy, but the government absolutely did not
want the world to know that. So all this was kept hidden and I was really
regarded as rather unwelcome visitor—and in fact to this day my book Governing the Market (1990, read the
introduction here) is not well
received in Taiwan. It says the government of Taiwan did a good job of managing
the market, but they want the world to believe that Taiwan is a free trade
country. So that is the kind of intellectual trajectory that I have been on.



So I think that the value of the anthropology PhD was
that it really taught me, in practical terms, the meaning of the
anthropological maxim, which is 'soaking and poking'. To put it another way—I
love this—anthropologists are social scientists, who believe that the plural of
anecdote is evidence. And indeed I place a lot of weight on anecdotes, on
gossip, on the stories people tell, whereas economists would be much happier
reducing, let us say, South Korea's trade regime to one data point in a matrix,
and then compare that data point with, let us say, Malaysia's data point to see
how the trade regimes are correlated with growth, or something like that, and
that is really not my interest.





What would a student need to
become a specialist in IR or understand the world in a global way?



Despite what I've just said, I do think that a graduate
training in economics is very useful, provided one does not believe it. And that is really
difficult, because the socialization pressures are intense: if you do not say
the right things—which are neoliberal type things on the whole—then you will
likely not get a high grade. But I have noticed that economists tend to know
how to think, how to make arguments,
they tend to understand the idea of causality, and that may seem an astonishing
thing to say on my part, because it implies that students coming from other
disciplines are often weak in understanding the very basic ideas of causality,
but that is my experience. I had many students coming from, who knows, IR or
Political Science or Sociology or Anthropology, who clearly do not have much
idea of causality; they can describe things, but they find thinking in terms of
cause and effect, in terms of independent and dependent variables, in terms of
left and right side, they just find it difficult. So I do think that there is a
lot to be said for studying economics, and mastering the maths, provided that
the critical facility is not lost. That is point number one.



Point number two is that I think that there is a huge
premium on doing fieldwork, and the field work maybe in developing countries,
but when I say field work, I don't just mean going out to villages, going out
to see poor people 'over there'. I am talking of fieldwork inside bureaucracies:
to try and understand the culture, the incentive systems that people are
working under—fieldwork at home so to speak, in the countries one comes from. From
the students' point of view, it is clearly much easier to sit in the LSE
library to do the research. So in my marking I give quite a premium to a
student actually doing fieldwork, going out and interviewing, and having the
experience of writing up and interpreting the interviews and somehow fitting it
back into a larger argument—but really few students actually do that, and I
think that that is a real, real big mistake. Mind you, the same risk holds for fieldwork in economics as it does for
studying economics: I encourage students to work for (do fieldwork in,
experience) the World Bank; and several have—but to the best of my knowledge
almost none of them has kept their critical perspective. They really come to
buy into it.





The relations between states are settled
either through diplomacy or warfare. Why would we have to focus on economics to
understand IR?



Because economics—such as
for example balances of payment, surpluses and deficits—set the constraints and
incentives on countries in terms of their relationships with each other. A great
deal of diplomacy is driven by economic pressures: diplomacy to get other
countries to for example open their markets, or to cut deals with countries—'if
you do this, we will do that'—deals that may relate to areas that are rather
different, for instance if you buy more of these of our exports, we will help
you fight such and such country, because the manufactures are in my
constituency.



So, in a way, the way you
framed the question is part of the reason why I react against the discipline of
IR: because it tends to treat diplomacy, war, and so on, as somehow rather
separate from economic pressures, and I see these economic pressures as very
powerful drivers of both of the other two things. As another example, one of
the drivers of the Syrian conflict was that there was an acute drought (like
Weizman observed in Theory Talk #69, red), which meant that many people
were rendered destitute; rural areas flooded into the cities, and the Assad
regime just was—understandably—unable to cope; and large numbers of young men,
concentrated in cities, rootless and with no jobs, just were recruiting fodder for
the Wahhabi sect. I have always thought of economics—not so much as in the
making choices in conditions of scarcity, that is sort of Lionel Robin's definition—in the sense of Alfred Marshal, about how people make a
living, as a very fundamental driver of a lot of what happens in International
Relations.





Pikkety recently published Capital in the
21st Century, causing quite the stir. But why would inequality
between people matter for IR?



Let me comment by invoking
a very contemporary exhibit—the migration crisis in Europe now. Maybe a decade
ago I looked at the figures and if you took the
average income of the EU-15 prior to latest extensions and then expressed the
average income of countries outside of the EU—including sub-Sahara Africa—as a
percentage, then there was a really dramatic falling away of income levels
relative to the EU, in countries all around the EU and whether you took market
exchange rates or purchasing power parity. If you went round to sub-Sahara
Africa and took the average, it was more like two percent in market exchange rates
and seven percent in purchasing power parity; and the 'problem' is that there
is certainly here a rather thin slither of sea between Africa and the promised
land of Europe and to the east there are these great open planes, where armies
can go up and down to the speed of light, so to speak, but people can also move
pretty quickly across these planes.



So all one has to do—and this
might just be only a bit of an exaggeration—if one is on the poor end of this
poverty pyramid is hop across the border and you have a chance at least of
getting a very appreciable increase in living conditions and income, with which
you can then get savings to remit back to home. So the migrations pressures are
just huge. So that is one reason for linking inequality to issues in International
Relations—really fundamental issues, and very very difficult to dissolve.





You've done anthropological fieldwork inside
the World Bank—an institution drawing a lot of criticism from its detractors in
IR. Can you shed some kind of light about what kind of 'animal' the World Bank
is?



First of all, let me say
that at the micro-level—the level of the people you know and the people I know
inside the World Bank—I agree that there are people doing a lot of good work.
But if you look at the organization more generally—the World Bank and also the
IMF—they are clearly instruments mainly of US foreign policy—and any number of
US senators, members of the House, have basically said that. When they are
defending the International Financial Institutions (they often criticize them),
they do so by saying they are important for US foreign policy. And you have to
look at the governance structures to see how it is that the US in particular—but
Western states more generally—have from the beginning, through the very Articles
of Agreement, created a structure which locks in their power, and has made it
very difficult for other countries (including Japan) to significantly increase their
shareholdings. The US has kept the presidency of the Bank and the much less
recognized Number Two position of the IMF, and has used these positions to have
a very strong influence.



Just to illustrate what the
Bank and the Fund do: at the time of the East-Asian crisis—specifically the
Korean crisis in 1997-1998—the IMF mission was in Seoul. The negotiations were
in a hotel there. David Lipton from the US Treasury (and a former student of
Larry Summers who was by then Deputy Secretary) was just down the corridor of
where the negotiations took place, and every so often the IMF people would walk
out of the negotiations and consult with David Lipton, then come back in and—as
Paul Blustein reports in his book called The Chastening—often said
something rather different from what they had been saying before they consulted
with David Lipton.



Just to take another
example, the US being able to appoint the president of the Bank—to appoint a
person known personally to the Treasury Secretary or to the Secretary of the
State, or both—is really of great value: when there is a 'trustful relationship'—or
a relationship of dependency, the president being dependent on those who
appointed him in the Administration—it is possible for those people in the Administration,
or people close to them, to just ring up the president of the Bank, and talk in
a very informal, confidential, trustful way about what is happening in Latin
America, or what is happening in the Middle East, and what the US thinks the
Bank should or should not be doing in those places. Larry Summers appointed a
protégé of his to one of the regional development banks, and this person—who is
very senior in the bank—told me that Larry would frequently ring him, while he
is being driven home in the evening from the Treasury, just to have a chat
about how things were going in her region, and to pass on suggestions about
what the Bank should be doing there, and to get intelligence from her about
what was happening in the region, and so on. The point is that, making these
personal connections is of immense value, but at the same time, the US
Congress, in particular, is very much against having a big Bank against allowing
a capital increase for the World Bank—so that the bank could, as it should be
doing, increase its lending for infrastructure investment ten times. It is just
a complete scandal how little the Bank has been lending for the past 20 years
or more for infrastructure, for roads and power stations and so on. The US does
not want the Bank providing socialistic competition with the private sector: it
says these things are for the private sector to do, and the Bank has to take
care of poverty, because the private sector is not interested in poverty.



So the US wants to keep the
presidency of the Bank, it wants to keep, secondly, its unique veto right on
the big decisions, such as decisions on whether to increase the capital base—but
provided those two things are met it does not care that much about the Bank. In
the case of the Fund, the US is also very powerful, but of course the Europeans
have a bit more relative power. Right now I think the world is in an even more dangerous
sort if financial condition than might appear, because the IMF is acutely short
of secure or guaranteed lending resources, so if there is to be another round
of crisis—as I think is entirely likely within the next five years—the Fund
depends upon borrowing short-term from member countries, like on six months
terms, but member countries can say 'no', and that means that the Fund's
ability to fight crises is quite constrained. The Fund should implement what
was agreed in 2010 by all the member countries represented on the board of the
IMF: to roughly double the quote of the guaranteed lending resources, that is,
resources the countries actually hand over to the Fund, over which they
actually give up country control. All the relevant capitals ratified it with
one exception—the US—because Congress refused because the individual barons,
who are not under that much party discipline, each said to the Treasury: 'look,
the question of the IMF is of zero significance to my electorate, so if you
want my vote on the IMF, you have to give me things that I want like projects
in my constituency and so on'. The Treasury added up the demands of the people,
whose vote had to be won, and it considered those demands were just way, way,
way over the top. As long as a Democrat is in the presidency, while the House
is controlled by Republicans the world is sort of held hostage to this. Beyond
this example, this actually entails a structural problem: the US blocking or
producing a gridlock in international organizations, because the Congress is
hostile to international organizations, because Congress sees it to imply a
loss of US sovereignty. The only way to end this gridlock is to end the US veto
in the Fund and the Bank, but the problem is that the US can veto any measures.



One response of the big
developing countries is to create bypass organizations—such as the Asian
Infrastructure Investment Banks, such as the new Development Bank, such as the
Contingent Reserve arrangement the BRICs have established, and then a growing
number of sort of regional development banks. And I think that that is a good
thing, but it does raise questions about coordination, about who is looking
after, if you will, the global interests, global issues such as climate change.
In short, we need a genuine World Bank, rather than the American-Bank-in-the-World
we have today.



You engage thoroughly with economics and
economic theory. Now there seem to be two kinds of critical approaches to
economics in IPE: one criticizes its rationality as flawed, and another buys
into its rationality but attempts to point out where actual policy gets it
wrong. Where do you stand in this?



If you take the example of
how the EU attempted to impose fiscal rules on Greece, you see a notion of
rationality which draws upon these very primitive notions that I referred to
right at the beginning, where the government is just a household writ large,
and the same set of rules that apply to the budgeting of the household must
apply to the government as well. Here, the assumption is that any macroeconomic
proposition must have microeconomic foundations, that it must be derivable from
propositions about microeconomic agents acting in this sort of self-maximizing
way, and if you cannot derive macroeconomic propositions from those micro
foundations, then there is something unreliable, un-rigorous about your macroeconomics.
So what are then the sources of these micro-economic assumptions?



This leads us to one
fundamental and almost completely unaddressed weaknesses of economics can be
traced back to the Marginal Revolution in the late 19th
century. From that moment onwards, there has been an attempt to model economics
on physics, and that was very explicit on the part of people like Pareto and
Walras, and Jevons, early Marginalist thinkers. They even drew up tables with
terms of physics, like velocity, on one side, and then corresponding terms in
economics on the other. That had a huge benefit in terms of the 'science' of
economics, because it cut economics loose from Adam Smith's and other classical
economists' preoccupations with issues of morality and ethics. Adam Smith
thought his most important book was not the Wealth of Nations but his Theory of Moral Sentiments, on which he was working,
revising yet again, when he died. For Smith, economics and morals were never
separate worlds, but intimately related. So for him, the Theory of Moral
Sentiments and the Wealth of Nations were just twins. The point
about the marginalist revolution, and the embrace of physics as the model, was
that it cut economics free of all that sort of subjective stuff about values. So
economics after the marginalist revolution set off with the assumption that not
production, but the movement of individuals in markets engaged in trading with
each other became the center of gravity of economics. Making the study of exchange
rather than the study of production central was analogous to, say, Boyle's Law
in physics. Boyle's Law in physics explained the
movement of molecules in gasses, as a function of the pressure applied to the
gas. So why did they make that analogy?



The point of likening of
individuals in microeconomic actions with molecules in gasses was the
following. Everybody knows that we do not apply any consideration of
ethics or moral sentiments to the movement of the molecules in gas, so neither should
we apply any notions of ethics or moral sentiments to the movements of
individuals in market exchanges. And that was the way that all considerations
of ethics, of morality were just removed from economics. I for instance asked the
question to well-known American growth theorist, as we were walking down the
street in Providence at Brown University: 'is it moral for people to freeride?'
And he said, 'yes of course, provided they do not break the law'. So ethics and
questions of morality have been almost completely expunged from economics in a
way that would horrify classical economists including Smith; and a particular idea
of rationality has been an important part of cleansing economics from those
moral considerations. George DeMartino, editor of the Oxford Handbook of
Professional Economics Ethics which just appeared has a wonderful phrase to
capture this—'econogenic harm': the harm built into the way that economics,
professional economists work.





Haven't specific fields, like development
economics—a field you engage with yourself—advanced to overcome these
weaknesses in economic theory?



Let me root my answer again
in observations about the linkages between theory and practice, for it is in
practice that economic theory really does its work and its politics becomes
visible. It always amazes me we have had a development industry in place for
roughly the past 70 years with vast numbers of people, organizations, money all
orchestrated underneath this umbrella of development; yet if you go back and
read what the early writers about development and economic growth said—I am
thinking of people like Paul Rosenstein-Rodan, Myrdal, Hirschman, Prebisch, but also Moses Abramovitz. If you go back and look
at what they were saying, it seems to me that we have not advanced all that
much. Sure, we have advanced a lot in terms of econometric techniques, but in
terms of substance we have not. One conclusion I draw from that is that it is
really important that international regimes—for example, World Bank and IMF
loan conditions, but also WTO regimes—give room for experimentation, because it
is really not the case that 'there is no alternative'. This Washington
Consensus agenda has clearly not been effective in accelerating production,
upgrading it, and production diversification, or export upgrading, or export
diversification. So, there should be written into the regimes a lot of room for
experimentation. But this isn't there because of the political origin of these
regimes; because of what western countries want for the rest world, namely, to
open the rest of the world to their markets.



In the 80s there were a lot
of experts in industrial development in the World Bank and they did good work,
promoting industrial growth and investment in productive infrastructure. But
then Anne Krueger came in as chief economist, and brought in a whole lot of
people with her—who, like here, were arch-neoliberals. The industrial growth
people were invited to find employment elsewhere, or to rebrand themselves as
experts in who knows what, environmental assessment, primary education, or good
governance. There was no room for them. This also fitted well with some bad
experiences the Bank had had with investing in infrastructure. It had gotten
into a lot of trouble with large-scale infrastructural interventions such as
roads and dams and the like from, especially, US NGOs mobilizing Congress—which
then put pressure on the Treasury and so on. My lament throughout this whole
conversation has been that we seem to have become just locked into this
direction that was set in the 1980s, and it is very difficult to see what kind
of economic catastrophe would be necessary to give a sufficient shock to
reroute the global system of economic governance.



So after the 1980s, the
Bank sort of backed off and began saying that development, economic
development, was about poverty reduction—the slogan of the Bank became, 'our
dream is a world free of poverty'. You can understand that shift partly in
terms of pulling out of the concern with production to get into safe territory,
but also because poverty reduction seemed to sort of take care of inequality,
because you reduced inequality to poverty—to the poor 'over there', and we can
feel good about helping them; but we do not want talk about inequality, which
involves us, because then there is the question of justice of our income.



But then the most recent
turn is that we're seeing a renewed push for infrastructure in the World Bank
and western development agencies. I think that you can link this recent
infrastructure push to uncertainty about the sources of economic growth. In the
West there is a real question about sustaining economic growth without housing
bubbles and stock market bubbles—in other words, without endogenously building
financial instability. There may well be a similar sort of issue in terms of
the growth of developing countries.





Last question. Adam Smith seems to be
constantly present in your work as a critical interlocutor. How come?



I kind of engage in a
critical debate with Adam Smith, but especially with people today, who believe
his ideas. I often start to frame arguments in terms of his famous 40 word
summary of the causes of the relative wealth of nations, which he actually
wrote in 1755, which is to say long before the first edition of the Wealth
of Nations. I will just tell you what these 40 words say, and then I will
tell you the significance of them. He said:



'Little else is
requisite to carry a state to the highest degree
of opulence from the lowest
barbarism than peace, easy taxes, and tolerable
administration of justice; all the rest being
brought about by the natural course of things.'



So I am struck by how today
many economists say or imply that this is essentially right; you need some
qualifications of course, but essentially that is the nub of it. You might have
to translate peace, easy taxes, tolerable administration of justice into more
modern terms, but that is the essence of it. For example, Gregory
Mankiw—Professor of economics at Harvard, former chair of the National Council
of Economic Advisers during the Bush administration, and author of a very
popular textbook in economics—said in the Wall Street Journal in 2006: Adam Smith was right to
say that – and then he gave the 40 word quote. The renowned economists Timothy
Besley and Torsten Persson wrote Pillars of Prosperity, which also
begins with Smith's 40 words, and they even see the book as a kind of
elaboration, but in that same kind of spirit, of Smith's basic idea. So my
point is that these ideas are still current; they are still the sort of front
of a lot of neoliberal thinking. I am just astonished these ideas all these
centuries later remain so powerful. I have had at the back of my mind the idea
of organizing an international competition to provide a contemporary 40 word
statement, which is sort of equivalent to Smith's, which would obviously have
to be of a more global character, encompassing the globalized world economy.







Robert Hunter Wade worked at the Institute of
Development Studies, Sussex, 1972-95, World Bank, 1984-88, Princeton Woodrow
Wilson School 1989/90, MIT Sloan School 1992, Brown University 1996-2000.
Fellow of Institute for Advanced Study, Princeton 1992/93, Russell Sage
Foundation 1997/98, Institute for Advanced Study, Berlin 2000/01. Fieldwork in
Pitcairn Is., Italy, India, Korea, Taiwan. Research on World Bank
1995-continuing. Author of Irrigation and Politics in South Korea (1982), Village
Republics: The Economic Conditions of Collective Action in India (1988,
1994), Governing the Market: Economic Theory and the Role of Government
in East Asia's Industrialization (1990, 2003). Latter won American
Political Science Association's award of Best Book in Political Economy, 1992.



Related links





Faculty profile at LSE
Read Wade's The Piketty
phenomenon and the future of inequality (2014, real-world economics review)
here (pdf) 
Read Wade's Capitalism
and Democracy at Cross-Purposes (2013, Challenge) here (pdf) 
Read Wade's Rethinking
Industrial Policy for Low Income Countries (2007 ADB Conference paper) here
(pdf) 
Read Wade's Bringing the
State Back In (2005, IPG) here (pdf) 
Read Wade's Is
Globalization Reducing Poverty and Inequality? (2004, World Development)
here (pdf) 
Read Wade's Creating
Capitalisms (Introduction to 2003 book 'Governing the Market') here (pdf) 


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