Analysis

Patronage Partitions

In South Africa’s watershed election last May, the African National Congress (ANC) failed to secure an outright majority for the first time in the country’s democratic history, sinking 17 percentage points from five years prior, obtaining just 40.18 percent of the vote. Opponents of the ruling party celebrated the sudden shift in popular sentiment. The ANC’s ‘“liberation dividend”—the condition-free support it has been granted in appreciation for its role in delivering democracy—appeared to have expired. The ANC was becoming an ordinary party, in an ordinary country. 

The World’s Stockyard

In the age of climate emergency, the developmental drawbacks of being a primary goods exporter may intensify. Besides barriers to climbing the value chain on the world market, the economic cost of becoming the world’s stockyard is compounded by its environmental impacts.

Mansfield is Open for Business

In 2017, the town of Mansfield pointed the way for the Conservative Party. The Conservative candidate defeated a longstanding Labour incumbent who had tried, among other things, to sue the Mansfield Town FC supporters’ association. Amid the density of local experience it was easy to dismiss the loss as a fluke result for an unpopular candidate, but the same was happening in Middlesbrough South and East Cleveland, in Stoke-on-Trent South and in Walsall. This reflected not just local issues and not even Brexit per se, but a longer-term secular decline in Labour support among voters in areas with declining manufacturing employment, which progressives soon dubbed Labour’s “Mansfield problem.” For locals, the drift was palpable. Left commentators were initially optimistic that Mansfield could be regained at the next elections, propelled by an impressive Momentum mobilization for a sympathetic local candidate. But the public image of Jeremy Corbyn proved to be increasingly repellent to many local voters. Speaking to people in Mansfield in the Corbyn years, it was not uncommon to hear them wish him dead. In 2019, Labour got trounced here, winning 31 percent of the vote to the Conservatives’ whopping 64 percent.

Why So High?

The clashes between Lula and Campos Neto illustrate something of the complex and controversial issue of interest-rate setting in Brazil.

Strategic Interdependence

Geopolitical rivalry and strategic competition are now common parlance in describing international politics and global business. Yet, a large part of misconception stems from a severe lack of understanding about the degree of interdependencies and healthy competition permeating important supply chains that are so vital in the world economy today. Supply chains offer an alternative perspective on the continuities in foreign policy and economic diplomacy, taming exaggerated claims about Cold War rivalry and inevitability of conflicts. The advanced chip-making industry presents a highly globalized sector, with major players beyond China and the US and firms which take a leading role in shaping our responses to a new international context—one marked by economic security and industrial policy as the backbone of economic governance in the second quarter of the twenty-first century. 

Terms of Investment

Now two years old, the federal Inflation Reduction Act (IRA) sets the stage for billions of federal dollars to flow toward home energy upgrades through home energy rebates, grants, and tax credits. But in the US rental market, both the quality of housing and the terms of tenancy are largely left in the hands of landlords.

Battery Supremacy

In the Summer of 2022, Viktor Orbán sparked international outrage by lamenting that countries where Europeans and non-Europeans mingle were “no longer nations.” Amid the uproar, a dramatic pronouncement in the same speech largely escaped notice: Orbán declared his ambitions to make Hungary a “superpower” in electric vehicle (EV) battery production, with the world's third-largest manufacturing capacity.

Driving Capital

Since President Biden signed the Inflation Reduction Act (IRA) into law in August 2022, the Mexican auto assembly and parts industries have been booming. Tesla and the Chinese state-owned carmaker Jetour announced the construction of new factories for electric vehicles (EVs) and gasoline cars, spurring investments down the supply chain. Tesla’s glass supplier AGP Group plans to open a factory accompanying Tesla’s in Santa Catarina, Nuevo León.

Kishida’s New Capitalism

In September 2021, Japanese Prime Minister Kishida Fumio was elected on an ambitious platform: “New Form of Capitalism.” As leader of the Liberal Democratic Party, he promised to achieve a new and better economic system where economic growth and income distribution form a virtuous cycle. The Japanese government has presented several plans to promote this new capitalism, but the Japanese people remain dissatisfied with the current economic reality. Despite the Japanese stock market soaring and the Nikkei index briefly surpassing levels only seen during the bubble period about 34 years before, economic growth has been stagnating since mid-2023. Kishida’s approval has steadily declined, dropping to 25 percent in February 2024 from over 50 percent in early 2022.

A Safe Haven for Hidden Risks

Perceptions are shifting regarding the US fixed-income market. In September 2019, interest rates on overnight repos unexpectedly spiked, leading the Federal Reserve Bank of New York to inject $75 billion in liquidity. In March 2020, the Covid-19 pandemic triggered a wave of securities selling, prompting the Fed to purchase over $1 trillion in securities. These events have raised concerns about market stability.

Border Traffic

The rise of Ecuador in the transnational network of organized crime is a relatively recent phenomenon. Although the country has supplied chemical inputs for cocaine production in Colombia since the 1990s, there were few spikes in violence or power struggles between criminal organizations fighting over control and access to drug trafficking routes. In early 2024, however, Ecuador captured global attention when an organized criminal group (OCG) took over national TV channel TC Television, holding staff hostage in Guayaquil. Violence escalated dramatically the year prior, leading Ecuador to be classified as the most violent country in Latin America. 

The Productivity Gap

Standard development economics anticipates that the composition of a country’s labor force will go hand in hand with the composition of output, reflected in the division between the primary, secondary, and services sectors. But contemporary India, as well as several other countries across the global South, are challenging this expectation: changes in output between the sectors have preceded changes in the composition of the labor market. 

Underdevelopment and War

In the 1960s and 70s, the Colombian national government embarked on an ambitious agrarian reform program to address poverty in the increasingly violent countryside. Under the bipartisan project of the National Front, which alternated power between the Conservative and Liberal parties, these efforts sparked domestic and international debates around the nature of developmentalism in the Colombian state, especially since they coincided with a series of economic missions meant to tackle underdevelopment. Such interventions were influenced by international institutions like the World Bank and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), as well as by discussions around economic growth and capitalism taking place in North America and Europe. Amid regional development debates, the Colombian approach would be determined by entrenched inequality in rural areas and the emergence of armed resistance against the state. 

Supply-Side Healthcare?

In 2019, Florida Governor Ron DeSantis signed a bill into law that deregulated new hospital construction and unleashed a “hospital-building boom.” Some 65 new hospitals were planned in the three years after DeSantis signed the bill ending decades-old regulations on hospital construction called “certificate of need” (CON) laws, which could amount to as much as a 20 percent increase in total hospitals in the state. And it isn’t just Florida: Ohio repealed its own CON laws for hospitals in 2012. Today, Ohio is experiencing its own hospital boom. In 2019, the Cleveland Clinic planned a new facility within seven miles of two other hospitals and two other health systems. “The Columbus area seems sick with medical construction,” reports the Columbus Dispatch, “Every week, it seems, another major project gets underway.” In 2022, the largest and wealthiest hospital system in Massachusetts—Mass General Brigham—received approval for an enormous $2 billion expansion. Nationally, total private construction spending on healthcare facilities has nearly doubled in the past decade, rising from $28.9 billion in 2014 to $50.4 billion in 2023.

Partners in Growth?

With general elections continuing into early June, Indian Prime Minister Narendra Modi and his ruling Bharatiya Janata Party (BJP) are poised to begin a second decade in power. In the realm of political economy, it is meant to be the decade of Atmanir Bharat or “Self-Reliant India,” Modi’s ambitious agenda of enhancing domestic manufacturing, infrastructural development, and international competitiveness—rhetorically packaged together in the idiom of Hindutva or Hindu nationalism. To realize this vision, as the Wall Street Journal reported last year, the government depends on “six giant companies,” including Reliance (led by Mukesh Ambani, one of the twenty richest billionaires in the world) and the infamous Adani group (who has seemingly recovered its fortunes in the wake of a scandal sparked by the publication of a report by short-seller Hindenburg Research). 

The Iron Farm Bill

Agriculture directly accounts for 10 percent of US greenhouse gas emissions. These emissions, which do not include onsite fossil-fuel use, come from soil and manure management and the digestive processes of ruminants, mostly cattle. Worse, there is a substantial “carbon opportunity cost” to keeping land in crops when it could instead be turned into forest, a powerful carbon sink.

Illiberal Developmentalism

The election of Prabowo Subianto to the Indonesian presidency two months ago has been warmly welcomed by business and political elites in the country. The day following the result, the Jakarta composite index rose by 1.3 percent, a tacit sign of assent for President Joko Widodo’s chosen successor, who was always expected to win the vote. Prabowo (as he is popularly known) has promised continuity with Jokowi’s (as he is popularly known) ten-year regime, emphasizing infrastructural development and downstream industrialization.

The Origins of Conditionality

Contemporary debates around the governance of the global economy often center on the role of the International Monetary Fund (IMF), arguably the most powerful international organization that—among other responsibilities—provides loans to countries in economic crisis. The most recent iteration of these debates took place in Marrakesh in October 2023, where IMF member-states agreed on increases to its lending capacity, while preserving the current allocation of votes, which overwhelmingly favors large Northern economies. This perpetuated the widespread perception that the IMF is the enforcer of creditor countries, a concern bound to reemerge at the IMF and World Bank Spring meetings, taking place this week in Washington, DC. While the IMF’s loans carry low interest rates, their true cost for debtor countries is the obligation to implement far-ranging economic reforms.