I’m glad that Michael Bloomberg wants America to resist protectionism, but by writing in the FT, isn’t he preaching to the choir, and a largely non-American choir at that?
Author Archives: jdingel
Arbitrary Development Numbers: MDGs
William Easterly has a new paper exposing silly development bureaucracy numbers: the Millennium Development Goals.
Measuring social and economic progress is not at all as straightforward as the discussion of the MDGs makes it seem. Setting targets in a particular way will make some regions look better and others look worse depending on a number of choices that any target-setting exercise must make. These choices include the following:
1. Choice of benchmark year
2. Linear vs. nonlinear relationships with time or per capita income
3. Absolute changes versus percentage changes
4. Change targets versus level targets
5. Positive vs. negative indicatorsThere has been very little discussion of these choices that were made in setting the MDGs. Sometimes, the choices made just seem a priori to make no sense; other times, they seem arbitrary and it is unclear on welfare grounds which measure to prefer; finally, the choices do not seem consistent across the seven MDGs. Unfortunately, as this paper will argue, many of the choices made had the effect of making Africa’s
progress look worse than is justified compared to other regions.
For example, for the poverty goal, countries are given credit when a citizen exits poverty, but met with silence if a citizen moves from near-poverty to a comfortable life. And why are the targets set vis-a-vis 1990, when the grading was announced in 2000? To meet targets, “17 African countries… would need 6 percent per capita growth over 2005-2015”: failing to meet the target is merely failing to produce a miracle.
Read the full paper. See a prior installment in arbitrary development numbers.
[HT: Pienso]
What’s new about foreign auto plants in the US?
Daniel Altman thinks it’s notable that Fiat and Volkswagen are thinking about building automobile plants in the United States. But that’s far from remarkable. Toyota has been building plants in the American South for years.
So if this story is newsworthy, it must be so because there is something distinct about European investment in the States or because it highlights the magnitude of the dollar’s fall. It’s not news that America has run a trade deficit for years, which is the same as saying its enjoyed significant net capital inflows for years, including investments in automobile plants.
What's new about foreign auto plants in the US?
Daniel Altman thinks it’s notable that Fiat and Volkswagen are thinking about building automobile plants in the United States. But that’s far from remarkable. Toyota has been building plants in the American South for years.
So if this story is newsworthy, it must be so because there is something distinct about European investment in the States or because it highlights the magnitude of the dollar’s fall. It’s not news that America has run a trade deficit for years, which is the same as saying its enjoyed significant net capital inflows for years, including investments in automobile plants.
What's new about foreign auto plants in the US?
Daniel Altman thinks it’s notable that Fiat and Volkswagen are thinking about building automobile plants in the United States. But that’s far from remarkable. Toyota has been building plants in the American South for years.
So if this story is newsworthy, it must be so because there is something distinct about European investment in the States or because it highlights the magnitude of the dollar’s fall. It’s not news that America has run a trade deficit for years, which is the same as saying its enjoyed significant net capital inflows for years, including investments in automobile plants.
Congress frustrated by MCC independence
The NYT reports that some members of Congress are unhappy with the Millennium Challenge Corporation’s rate of progress – it hasn’t spent fast enough. They want to grab the MCC’s unspent billions and make it come back to Congress when it needs money. This attack on the MCC’s independence undermines its founding purpose and has serious consequences:
If the agency gets the lesser Senate amount, under the current rules requiring the money up front, Burkina Faso, a West African country that has spent more than two years qualifying for and drafting its $560 million to $620 million plan, will get nothing, agency officials said. Tanzania and Namibia are ahead of it in line…
In small, poor countries like Burkina Faso, every burp and hiccup of an aid agency like the Millennium Challenge Corporation is news — and often front page news. David Weld, the agency’s country director for Burkina Faso, said he did not know how he could face people there if Congress did not come through with enough money to help them.
“What type of message does that send to Burkina Faso, a country that has spent a huge amount of political capital and money on this process?” he asked. “What does that tell the Togos, the Nigers that want to become eligible? It tells them: Do everything like Burkina Faso, make all these reforms, spend millions of your own money, and then maybe at the end we might be able to sign a compact with you — or maybe not.”
Is the bicycle theory a scare tactic bound to backfire?
Along the lines of Rodrik’s skepticism, is there danger that the bicycle theory of trade negotiations may be a self-fulfilling prophecy? Perhaps if free traders expressed greater confidence in the WTO’s ability to prevent backsliding, it would actually serve as a credible backstop.
In defence of cosmopolitan football
Simon Kuper, the FT‘s sport columnist, guts the case for protectionism in football:
British panic over immigrants has spread to football. English clubs prefer foreign players because they are better. Arsenal has almost dispensed with Englishmen altogether. English footballers accounted for only 37 per cent of total minutes played in this season’s Premiership, according to Dutch magazine Voetbal International. To some degree, English soccer is disappearing… Or one could say they get a massive 37 per cent, more than any other nationality in what is arguably the world’s toughest league.
Rather than playing too little top-class club soccer, Englishmen probably play too much. The Premier League is becoming a global league, seen on television everywhere, soccer’s equivalent of the US’s National Basketball Association. So players earn millions. So the league is all-consuming. Players have to give everything, every match.
A Croatian playing in a smaller league can husband his energy so as to peak in international matches. But English players must peak for their clubs. That means they often start international matches tired and unfocused…
In any case, English supporters want foreign players. Mr Platini wonders whether Liverpudlians can identify with a Liverpool team packed with foreigners. Judging by the Premiership’s record crowds paying record ticket prices, fans identify enough. England can have either an excellent league or an English league, but not both. Fans apparently prefer excellence.
We need skills!
Jacob Funk Kirkegaard says that America is in desperate need of more high-skilled immigrants.
Clinton’s comments
Kim Elliott says that Hillary Clinton is alienating poor countries:
But in questioning the worth of reviving the Doha Round, as she did in an interview with the Financial Times, Clinton overreacts and comes across as isolationist and completely oblivious to the consequences for the poorer countries in the world. It is correct, as Clinton implies, that the economic benefits of Doha overall would be modest. The US market is already relatively open so the effects here would be small. But they could be important for some low-income countries that pay the highest tariffs remaining in the US schedule. Those tariffs, on less expensive clothing, footwear, and other products, are also regressive in their effects on US consumers, hitting the poorest at home the hardest. Perhaps most important, failure of the Doha Round could undermine support for the multilateral, rules-based system that is the only thing protecting smaller, poorer countries from predatory trade practices by the powerful.
Dan Drezner points out that Clinton isn’t making Peter Mandelson happy either.
Trade Diversion 