If you'd like to learn more, the UN isn't going to help you

The United Nations’ The Millennium Development Goals Report 2009 doesn’t have any footnotes, which makes it almost worthless. For example, they write: “Worldwide, the number of people living in extreme poverty in 2009 is expected to be 55 million to 90 million higher than anticipated before the global economic crisis.”

That’s a headline-worthy number. It’d be nice to see their calculations. Or at least identify who produced the number. Was it the UN or someone else?

A UN press release from 24 June 2009 says “The crisis-related slowdown in growth in developing countries implied there were an estimated 55 to 90 million more extremely poor people in 2009 living on less than $1.25 a day, than had been projected before the crisis.” This contrasts with numbers produced by World Bank researchers Shaohua Chen and Martin Ravallion in late April, who estimated that

the crisis will add 53 million people to the 2009 count of the number of people living below $1.25 a day and 64 million to the count of the number of people living under $2 a day. Given current growth projections for 2010, there will be a further impact on poverty in that year, with the cumulative impacts rising to an extra 73 million people living under $1.25 a day and 91 million more under $2 a day by 2010.

So did we learn during May and June that an additional 37 million persons were likely to fall below the $1.25 per day poverty line? Did Chen and Ravallion revise their updates recently, or does the UN source disagree with their estimates? We’ll never know, because the MDG Report doesn’t have footnotes or references. But at least it has photo credits!

The Travels of a T-Shirt in the Global Economy

I just finished The Travels of a T-Shirt in the Global Economy, an excellent international trade narrative by Pietra Rivoli. Gary Hufbauer summarized the book well:

This book is unlike any text in International Economics 101. It’s totally entertaining and without those dreadful equations. The Travels of a T-Shirt in the Global Economy tells the drama of globalization through real people and their daily lives. Rivoli recounts the trials of winners and losers on three continents. From a fascinating journey, she distills economic and political lessons that just make good sense.

Many of the topics covered in the book in “Part II: Made in China” and “Part III: Trouble at the Border” will be familiar to Trade Diversion readers (sweatshops, the Multifibre Agreement, Chinese textile quotas), but the text is well-written and compelling. Moreover, I learned a lot about the history of the American cotton industry (such as the shift from the Deep South to Lubbock, Texas, covered in “Part I: King Cotton”) and US dominance of used clothing exports (“Part IV: My T-Shirt Finally Encounters a Free Market”). The latter is perhaps the most interesting part of the book.

It is only at the retail level, and after it is tossed into a Salvation Army bin, that my T-shirt’s life is a story about markets rather than politics. It is political reactions to markets, political protection from markets, and political involvement in markets, rather than competition in markets, that are at the center of my T-shirt’s life story.

While the story of cotton in Texas is about public-private research partnerships and protection, and the story of textile imports is a collection of Beltway lobbyists from the Carolinas, the Tanzanian mitumba market that Rivoli visits is a cut-throat competition amongst hundreds of small entrepreneurs. And it’s fascinating.

"The Slide to Protectionism in the Great Depression: Who Succumbed and Why?"

Barry Eichengreen and Doug Irwin look at the drivers of Depression-era protectionism:

The Great Depression was marked by protectionist trade policies and the breakdown of the multilateral trading system. But contrary to the presumption that all countries scrambled to raise trade barriers, there was substantial cross-country variation in the movement to protectionism. Specifically, countries that remained on the gold standard resorted to tariffs, import quotas, and exchange controls to a greater extent than countries that went off gold. Just as the gold standard constraint on monetary policy is critical to understanding macroeconomic developments in this period, national policies toward the exchange rate help explain changes in trade policy. This suggests that trade protection in the 1930s was less an instance of special interest politics run amok than second-best macroeconomic policy management when monetary and fiscal policies were constrained.

Trade costs between cities

Ed Glaeser is pretty blasé about some intranational trade costs in this paragraph:

The national high-speed rail agenda is being pushed with claims that these trains will jump-start economic growth. No serious evidence supports such claims. When new transportation does affect local economies, it generally does so by moving activity from one place to another, not by creating nationwide benefits.

Better intercity transit shifts economic activity with no gains from economic reorganization? That’s not what economists usually expect from falling trade costs. Professor Glaeser is an expert on economic geography and urban economics, so there’s probably some research or theory behind that claim – I wish he wrote link-filled blog posts rather than Boston Globe columns.

Hat tip: Avent.