Motivating development assistance

Well-known philosopher Peter Singer has a new book coming out next month titled The Life You Can Save: Acting Now To End World Poverty. He wants everyone to feel morally obligated to donate at least five percent of their income to promoting global poverty reduction. You can read an excerpt here. The book cites Jeff Sachs early to argue that extreme poverty could be “virtually eliminated” within a few decades.

While I am glad to see Singer make a strong case that developed country citizens ought to be more concerned with global poverty, I suspect that I will find the book frustrating on the whole. I am uncomfortable with those who think that economic development is impeded more by a lack of appropriate motivation than a lack of appropriate knowledge and incentives. Given the emphasis of the book’s introduction, I suspect that Peter Singer will be due some grief from Bill Easterly.

Export-led growth and development as diversification

There are few exceptions to the essential initiating role of a successful export sector in the early stages of accelerated growth of market economies. The reason is that the domestic market has been small and scattered… An expanding external market has provided the means for an increase in the size of the domestic market, growth in money income, and the spread of specialization and division of labor…

Why does one area remain tied to a single export staple while another diversifies its productions and becomes an urbanized, industrialized economy? Regions or nations which remain tied to a single export commodity almost inevitably fail to achieve sustained expansion. Not only will there be a slowing down in the rate of growth of the export good or service which adversely affects development, but the fact that the ecnomy remains tied to a single industry will mean that specialization and division of labor outside that industry are limited.

A new essay synthesizing the ideas of Johnson, Ostry, and Subramanian with Carrère, Strauss-Kahn, and Cadot? Not exactly. That passage comes the opening pages of Douglass C. North’s The Economic Growth of the United States, 1790-1860, written in 1961.

The origins of beggar-thy-neighbour

Steven R. Weisman on the history of the term:

[Joan] Robinson was apparently inspired by a card game popular in the 19th century, known as “Beggar-My-Neighbor.” One of the first literary appearances of the game was in the novel Great Expectations, published in 1861. Charles Dickens cited the game as the only one that Pip, the protagonist, seemed to know how to play. Hoyle’s says that “Beggar-My-Neighbor,” a kind of zero-sum game in which your opponent was not only defeated but left penniless, had such other names as “Beat Jack Out of Doors” and “Strip Jack Naked.”

Trade adjustment assistance in the stimulus package

Randall Soderquist notes that the stimulus package contains major trade adjustment assistance programs, such as “TAA for communities, coverage for workers in the service sector, eligibility for secondary workers in the supply chain, and availability of health care coverage.”

Now that we have significant — and of more importance — well-funded programs designed to assist American workers, it is time that President Obama move aggressively to create a trade agenda that will not only protect the economic welfare of the United States, but also establishes the conditions leading to economic growth, poverty alleviation, and political stability in the international system. Leadership on trade, especially in a world at risk because of the financial crisis, requires looking forward at obvious opportunity, not just back at glaring mistakes.

US external debt credibility

Tyler Cowen:

Many on the left are boasting that the U.S. government could borrow lots more (look at the current T-Bill rate), forgetting they used to warn us that international capital flows, as amplified through noise traders and speculators, mean that crises can arrive in a single, whiplash moment, bringing countries from riches to rags virtually overnight.  Somehow those old narratives are being forgotten, I wonder why.

Willem Buiter has a longer explanation.