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In his third term, Roosevelt appointed Vice President Henry A. Wallace to Chair the Board of Economic Warfare. Conflicts soon arose with Secretaries Jessie Jones and Cordell Hull. An ailing Roosevelt replaced Wallace by Leo Crowley and adopted a bipartisan policy to win the war. He abandoned the New Deal, and left to Wallace to support trade unions, to protect the rights of Blacks in the South and of those working in defense industries in the North and to champion the interests of the common man. Roosevelt dropped Wallace from the ticket in 1944 to get southern support to run for a fourth term. As Secretary of Commerce in President Truman's cabinet, Wallace advocated normalizing relations with the U.S.S.R. But like his father before him, he now represented a minority view in a government dominated by industrial, military, and financial interests. At the urging of Secretary of State Byrnes, President Truman dismissed Wallace in 1946.JEL Classification: F5.

In three successive generations, a Henry Wallace advocated interests of the agricultural Midwest: trust busting, natural resource conservation, application of science in agricultural, freer trade, and international comity. While characterized as a Midwest institution, the family's success as Secretaries of Agriculture ultimately depended on presidential support. Henry C. Wallace failed to restore prosperity to farmers in the depression after World War I due to the opposition of President Harding. His son Henry A. Wallace succeeded in the Great Depression thanks to strong support of President Roosevelt. JEL Classifications: N13, Q15

When should internationally shared resources be subdivided and property and management rights to parts of the resource be distributed among nation states? Subdivision leads to inefficient exploitation and to an arbitrary division of benefits under three conditions: when property rights cannot be economically enforced; when the size and the value of the resource are unknown; and when exploitation involves external economies. The efficient use of such common property resources requires private or public regulation. Voluntary private regulation is likely to be effective only when few users are involved. In other cases, public regulation is called for. Some attributes of an intergovernmental organization designed to achieve efficient, equitable, and stable exploitation are presented. Current proposals for managing ocean resources, the orbit-spectrum resource, and Antarctica are considered.

Excessive concentration increases national risk in an uncertain world. This paper views economic and political diversification as an essential aspect of national risk management aimed at promoting efficiency, growth, and welfare. The paper first presents economic and political diversification side by side in a cross-country framework and discusses how they interact and encourage more stable long-run economic growth. Thereafter, the paper considers Iceland as a case study of the intertwined effects of insufficient economic and insufficient political diversification. Dominated for decades by the fishing industry, the Icelandic economy is more diversified than before following the financial crisis of 2008 with tourism now generating more foreign exchange than fisheries. The paper ends with some general policy conclusions.

Under what conditions can the European Neighbourhood Policy achieve one of its main objectives: to resolve conflicts in the European Union's neighbourhood? In the spirit of Montesquieu and Monnet, the basic hypothesis of the EU is that closer economic integration encourages governments to take steps to resolve conflicts and vice versa, creating a virtuous circle of prosperity and detente. The EU has a strong motive in this, since conflicts in its neighbourhood spill-over into the EU itself. The paper identifies some factors important for success, including the existence of active facilitators of compromise, strong intraregional trade, and the prospect of accession to the EU. It concludes that the EU's Member States must give conflict resolution greater priority in the European Neighbourhood Policy and provide stronger means, larger resources and better incentives if this goal is to be realised.

Since Jean Monnet conceived the Coal and Steel Community, free trade has successfully prevented serious conflicts in Europe between democratically governed States with market economies. After six countries established the European Community, this principle has been extended successfully to its immediate neighbours, successively enlarging the European Union to its current 27 Member States. The Union's European Neighbourhood Policy (ENP) has through the Union for the Mediterranean and the Eastern Partnership attempted to further political stability and economic development by liberalising trade between the EU and its neighbours as well as among these neighbours themselves. The Arab Spring initially improved the prospects for establishing political democracy and human rights in key countries. In response, the EU increased the emphasis in the ENP on supporting the democratization process in the Barcelona countries and on negotiating deep and comprehensive free trade agreements among the countries of the region as well as between each such country and the EU. Using a panel gravity model of trade, this paper estimates the potential for increased intra-regional trade among ten countries of the Southern and Eastern Mediterranean coast of the EU. It attempts to answer the following questions. Between which groups of countries (e.g., Agadir countries, key actual/former belligerent countries in the Middle East) is this potential largest? Is it anywhere sufficiently large to provide an incentive for these countries to integrate much more closely with each other and with the EU? Can the prospect of such closer integration provide sufficient economic benefits to encourage progress in democratisation in key countries and resolution of conflicts between key participating countries? Or are stronger incentives needed?