Category Archive: Sources

  1. Strahler

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    This is an archived version of the PW Sources newsletter from Saturday, February 17, 2024. Sign up to receive PW Sources directly to your inbox here.

    ELECTORAL BONDS

    On Thursday, a few months ahead of nationwide elections, India’s Supreme Court banned electoral bonds—anonymous political donations sold by the State Bank of India. Since the Modi government introduced electoral bonds in 2017, more than $1.9 billion in secret donations have been distributed to political parties. 

    In a 2022 analysis, the Association for Democratic Reforms finds that Modi’s Bharatiya Janata Party (BJP) was the scheme’s largest beneficiary from 2017 to 2021: 

    “As per the annual audit report of BJP submitted with the Election Commission, the party had received Rs 210 crore worth of contributions in the form of electoral bonds for FY 2017-18. This was a whopping 95% of all the electoral bonds purchased in 2017-18. For FY 2018-19, BJP had received Rs 1450.89 cr worth electoral bonds and Indian National Congress had received Rs 383.26 cr worth electoral bonds. The BJP has redeemed Rs 4230 cr worth electoral bonds from 2017-18 to 2020-21, which is 65% of the total amount during these years. This is nearly six times that of second placed Indian National Congress, which has redeemed Rs 716 crores til 2020-21. The two regional parties of Biju Janata Dal & Yuvajana Sramika Rythu Congress Party occupy the next two places followed by Trinamool Congress. Given the anonymity provided to donors and political parties by the electoral bonds scheme, it has emerged as the most popular mode of donations to political parties for FY 2019-20. More than 62% of the total income of seven National Parties came from Donations through Electoral Bonds (Rs 2993.826 cr).”

    +  “The 2019 general (Parliamentary) election in India emerges to be the most expensive election ever, anywhere.” The Centre for Media Studies’ report on India’s first general elections following the 2017 campaign finance reforms. Link. And Aseema Sinha and Andrew Wyatt examine industrialist interests in Parliament after 2019. Link. 

    +  “Not only did the government dismiss the Reserve Bank of India’s initial objections to electoral bonds, it also ignored most of the bank’s subsequent suggestions to make the scheme less vulnerable to fraud and less prone to destabilising the Indian currency.” From the first installment of Nitin Sethi’s ten-part investigation into the scheme, based on Right to Information appeals. Link to the piece, link to the series. 

    +  “The banning of company donations in 1969—without adequately substituting for it with public funding—was a key moment in the path-dependent evolution of political finance because it strengthened ties between political parties and the black economy.” Milan Vaishnav and Devesh Kapur’s 2018 book on the history of political finance in India. Link. 

    NEW RESEARCHERS

    Conditional Cash Transfers in Peru

    HA LUONG is a PhD candidate in Economics at the University of Barcelona. Her job market paper studies how conditional cash transfers shape gender role attitudes in Peru. 

    From the abstract:

    “This paper explores the impact of conditional cash transfer (CCT) programs on children’s gender role attitudes, with a focus on Juntos, the largest CCT program in Peru. Using data from the Young Lives Survey and employing the fuzzy regression discontinuity design, I find that the program reinforces traditional gender role attitudes among children in beneficiary households. These attitudes align notably with children’s behaviors, particularly among girls. Beneficiary girls allocate more daily time to caregiving and unpaid household labor, which, in turn, is associated with their lower test scores in reading and mathematics. Investigating potential mechanisms reveals that beneficiary mothers are more likely to prioritize their time on home production over paid work or self-employment. This shift in mother’s time priority serves as a channel for perpetuating traditional gender role attitudes among children. By offering novel insights into the impact of social policies in a developing context, this paper contributes to our understanding of the complex relationship between policies and gender norms.”

    + + +

    +   “With much of the media attention on the Houthis, little has been said about Ethiopia’s renewed interest in securing Red Sea access.” New on PW, Kaleb Demerew on the history of Red Sea power struggles. Link.

    +   The Just Energy Transition Partnership (JETP), a climate finance framework endorsed by world leaders, struggles to raise capital. Link. And a JETP report from the Rockefeller Center on addressing finance gaps for developing countries. Link.

    +   A decomposition on the rise of the populist radical right in Europe shows evidence of voters prioritizing nativist cultural positions. By Oren Danieli, Noam Gidron, Shinnosuke Kikuchi, and Ro’ee Levy. Link.

    +   “The marginal cost debate served as part of the foundation for various fields of modern economics, particularly institutional, regulatory, and public choice economics as well as law and economics.” By Brett M. Frischmann and Christiaan Hogendorn. Link. 

    +   “In 2011, the major German electricity-producing utilities faced an existential crisis: a sudden and unexpected volte-face on nuclear power regulation.” Gregory Ferguson-Cradler on “transition risk.” Link. 

    +   Ron Boschma, Ernest Miguelez, Rosina Moreno, and Diego B. Ocampo-Corrales on technological breakthroughs in Europe from 1981 to 2010. Link.

    +   “Exports as a share of GDP have constantly risen to become the most important growth engine in the Korean economy. This long-term trend, however, has coincided with a decline in the labor income share.” By Tanadej Pete Vechsuruck. Link. And see Kang-Kook Lee’s recent PW essay on South Korean growth models. Link. 

    +   Katherine Walla on US Commerce Secretary Gina Raimondo’s plan to set AI standards in an effort to compete with China’s high-tech manufacturing investments. Link.

    +   “A nationalist class conscious tradition stemming mainly from the Mexican Revolution of 1910-1914 survived and even thrived among Mexicans in Los Angeles. This tradition derived from the Partido Liberal Mexicano (PLM). Many of the PLM members who fought in support of the revolution in northern Mexico belonged to the IWW and often PLM members organized Mexican workers for the IWW. In its Fresno Local 66 during 1909 and 1910 the IWW, for example, while unable to create an ongoing union, organized many Mexican migratory agricultural and railroad workers. The famous Frank Little headed the Fresno organizational efforts and the Mexican IWW organizer, Jesús González-Monroy, was also a PLM leader. In Los Angeles in 1910-1911, the IWW exerted influence in strikes of Mexican street railway and gas workers.” By Douglas Monroy. Link.

  2. Horse Notations

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    This is an archived version of the PW Sources newsletter from Saturday, February 10, 2024. Sign up to receive PW Sources directly to your inbox here.

    PRICES

    The inflation slowdown in the United States stabilized in the last half of 2023 at approximately 3.1 percent. A January report by Liz Pancotti and Lindsay Owens of Groundwork Collaborative attributes most of the rise in prices during the last quarter to corporate profits. 

    In 1972, former Chief Economist to the Subcommittee on Antitrust and Monopoly of the Senate Judiciary JOHN MALCOLM BLAIR proposed an “excess-profits” tax, designed to induce competitive pricing and alleviate the inflationary effects of concentration where antitrust enforcement could not reach.

    “A precedent for preempting those corporate profits that by some designated standard are deemed to be ‘excessive’ is provided by the excess profits in which earnings above a certain specified return on investment or greater than those earned during a base period are returned to the Treasury. Its scope, however, could be broadened beyond disincentives to profiteering through a ‘forgiveness’ feature under which the tax owed would be forgiven to the extent that price reductions were made. With such a feature the objective of the tax would be to return monopoly profits to the public either through tax revenue or lower prices at the corporation’s discretion. The corporation would have full discretion in determining whether it simply wanted to pay the tax or whether it wanted to obtain ‘forgiveness’ through price reduction on all or any part of its output.” 

    +  “Whether or not price increases are happening, shortages are a constraint on conducting additional economic activity.” Nathan Tankas on “non-price” adjustments to demand. Link. And Sandy Brian Hager and Joseph Baines find that the structure of tax obligations in the US has contributed to a concentration of ownership in the corporate sector. Link.

    +  “Firms in the US increased their markups and profits in 2021 at the fastest annual pace since 1955.” By Mike Konczal and Niko Lusiani. Link. And a Bain report advises companies on “opportunistic” pricing strategies amid inflationary pressures. Link. 

    +  Geoff Barnard and Patrice Ollivaud critique the use of decompositions of GDP inflation, as were employed in Groundwork Collaborative’s report. Link.

    NEW RESEARCHERS

    Pre-Colonial Egyptian Agriculture

    AMR KHAIRY AHMED recently received his PhD in Human Ecology from the Department of Human Geography at Lund University. His dissertation studies the integration of industrial infrastructure in Egypt. 

    From the abstract:

    “How did fossil-fuelled technology find its way to Egypt on its way to global dominance? This thesis presents a socioecological history of energy technologies in agrarian production in pre-colonial Egypt (1820s—76). It situates them in the nineteenth century, understood as the beginning of the epoch of the Capitalocene; and in Egypt’s case, this is simultaneously part of the rise of Britain’s fossil empire. The thesis studies how the steam engine—and eventually the modern factory—was integrated into the Egyptian economy and society during this period, focusing on material aspects, as well as cultural dimensions. Several overlapping microhistories take the investigation to its conclusion in 1876 and bring the overarching research question down to the ground of Egyptian life. Historical analysis here identifies two phases for Egypt’s transition to steam technology in agrarian production. First, the predatory but frustrated empire-building project of Mohamed Ali that sought to compete with Britain, thwarted through the massive imbalance in coal endowments. Second, originating from this moment, the gradual growth of the dependency of Egypt on European fossil and financial capital, and its simultaneous integration into industrial capitalism.”

    + + +

    +   “Argentina has never before had to choose between China and the United States.” New on PW, an interview with Maia Colodenco on Milei’s foreign policy agenda, available to read in English and Spanish. 

    +   On Friday, Israeli Prime Minister Netanyahu ordered evacuations of Rafah in advance of an IDF military offensive. Link. As has been widely noted, there is nowhere safe to evacuate to: four months of a historically brutal bombing campaign decimating civilian infrastructure has driven 1.3 million Palestinians into crammed tent dwellings at the southernmost edge of the Gaza Strip. Link to a NYT article from January using satellite imagery to document the growth of the humanitarian catastrophe in Rafah. Link to a thread by Itay Epshtain recalling the role of Rafah in documents published in October outlining a strategy for its campaign in Gaza. Link to Moody’s statement on its downgrading of Israel, link to Seth Ackerman’s newsletter on the volatility of domestic Israeli politics, link to Tim Sahay’s interview with Guy Laron from November on the failure of the Netanyahu doctrine, and link to Amal Saad’s thread on Rafah.

    +   Brad Setser on China’s currency management. Link.

    +   “To finance internal war, the government proposed to raise the value-added tax on non-essential items from 12 to 15 percent.” Michele Bertelli on militarization in Ecuador. Link. 

    +   “Just as in 1936, when the colonial police went to great lengths to explain women revolutionaries, Delhi is struggling to understand what it means when women—young women, middle-aged mothers and older dadis—come out onto the streets.” By Atiya Hussain. Link. 

    +   “The non-state actors in this alliance are acting in accordance with their own political beliefs and strategic interests rather than following Iranian diktat.” Amal Saad in The Guardian on the Resistance Axis. Link. 

    +   “During the Anti-extradition Movement in Hong Kong, a wave of new unions surfaced—18 newly registered unions in 2019 and 491 in the first half of 2020.” By Anita Chan and Sallie Lau. Link. 

    +   “The Sindhi Sikhs exhibit a severe disillusionment with the Congress’ violation of Harmandir Sahib in 1984, which led to the assassination of Prime Minister Indira Gandhi and the backlash against the Sikh community. In Tej Kaur’s interview, she displayed a continuing palpable fear because she had been a witness to the anti-Sikh pogrom of 1984. While Mehrwan Singh, Hotusingh and Dayal Singh also referred to 1984 in their interviews, their articulations of the historical moment were accompanied by disillusionment and anger towards the Congress. Dayal Singh echoed Mehrwan Singh’s appreciation of the ‘government’ at the time of resettlement in India and his later antagonism towards Congress: ‘It helped us with groceries and shelter for two years. Congress was good. In fact the BJP [Bharatiya Janata Party] did not even exist then. However 1984 ruined everything. We lost our people and faith in the government.'” Rita Kothari & Jasbirkaur Thadhani on post-Partition politics in India. Link.

  3. Ascension

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    This is an archived version of the PW Sources newsletter from Saturday, February 3, 2024. Sign up to receive PW Sources directly to your inbox here.

    FOREIGN INVESTMENT

    New data released by China’s General Administration of Customs in January provides insight into China’s economic relationship with Latin America and the Caribbean. Since the pandemic, China has substantially recalibrated its direct investment, moving away from large-scale infrastructural projects associated with the Belt and Road Initiative (BRI). 

    A new report by MARGARET MYERS, ÁNGEL MELGUIZO, and YIFANG WANG contextualizes China’s declining investment in the region. 

    From the text: 

    “The term ‘new infrastructure,’ which emerged as a concept in 2018 and featured in China’s 14th Five-Year Plan (2021-2025), is woven throughout Chinese policy documents, alongside other modernization-related lexicon. It is understood in relation to “new industrialization,” for instance, which featured in the 2022 20th Party Congress, and refers to the realization of ‘informatization, urbanization and agricultural modernization.’ Both ‘new infrastructure’ and ‘new urbanization’ would appear to support ‘China-Style Modernization,’ which the Chinese Communist Party (CCP) aims to achieve by 2035. In China’s 2022 Government Work Report, ‘new infrastructure’ was positioned alongside ‘new urbanization’ and ‘major project construction,’ which together were dubbed the ‘Two News and One Major.’ China’s focus on ‘new infrastructure’ also coincides with a growing focus on ‘small and beautiful’ projects along the BRI. China has described these projects as smaller investments of a shorter overall duration, and which are better aligned with countries’ social welfare needs. According to Wang Jian, director and researched at the Institute of International Studies of the Shanghai Academy of Social Sciences, this concept gained traction as China recognized the need for enhanced ‘[prudence in assessing] the environmental and financial sustainability of projects…[a]gainst the backdrop of global economic downturn, the appreciation of the US dollar, and the further shrinking of the fiscal space for some developing countries to undertake large-scale projects.’ “

    +  “A large greenfield project involving opencast mining or oil extraction in an environmentally sensitive area is more likely to generate debate (and, therefore, a political backlash) than is an acquisition in which a Chinese company becomes part of a larger entity.” By Adriana Erthal Abdenur. Link. Also see a Reuters report on China’s rising greenfield investments in European EV manufacturing. Link.

    +  A 2022 report by Myers and Brian Fonseca examines China’s educational partnerships in Latin America and the Caribbean. Link.

    +  “In July 2020, to deal with the breakup of global supply chains and the economic downturn, the central government proposed establishing ‘a new development’ pattern centered on ‘internal circulation.’ ” Sit Tsui, Erebus Wong, Lau Kin Chi, and Wen Tiejun on China’s domestic economy. Link. And James Fok argues that China’s weak domestic markets have necessitated more private savings invested internationally. Link.

    NEW RESEARCHERS

    Inequities in Cancer Treatment

    SASMITA BEHERA recently obtained her PhD in health economics from the National Institute of Technology, Rourkela in Odisha, India. A recent paper, co-authored with Jalandhar Pradhan, analyzes inequities in out-of-pocket expenditures for cancer patients in India. 

    From the abstract:

    “Cancer patients in India often face the burden of paying out-of-pocket (OOP) for their treatment that is not covered by any health insurance. Moreover, inequities in OOP payment are also found among these patients. This study aims to determine horizontal and vertical inequity in OOP expenditure associated with cancer hospitalisation in India and analyse the demographic and socio-economic determinants of these expenditures. Data has been retrieved from 75th round of the National Sample Survey Office (NSSO), conducted by the Government of India between July 2017 and June 2018. The result of vertical inequity shows that the predicted mean OOP expenditure is more for lower-income quintiles, indicates a regressive nature of health financing for cancer treatment in India. Non-schedule caste and tribe (SC/ST) people have a higher percentage of OOP expenditure as compared to their SC/ST counterparts in the poor and middle-income quintiles, whereas for the richer income quintiles, OOP expenditure is higher for SC/ST population. The mean OOP cost is also higher for the male respondents than the female across all the quintiles. The result of GLRM shows that predicted OOP expenditure is significantly associated with residence, gender, insurance coverage, and level of care.”

    + + +

    +   Yen Chen on the immediate and long-term impacts of the UAW-Detroit Three 2023 National Contracts on the U.S. automotive sector. Link.

    +   “Spending on basic school infrastructure such as HVAC raises test scores but not house prices, while capital spending on athletic facilities raises house prices but not test scores.” Barbara Biasi, Julien M. Lafortune, and David Schönholzer on school capital investment. Link. And see David Backer’s PW essay on green investment in school infrastructure. Link. 

    +   First direct estimates of the Bolsa Familia transfer program on relative state-level GDP in Brazil, from the Federal Reserve Bank in San Francisco. Link.

    +   “Four firms would have experienced a collective $1.6 billion drop in operating profits in 2022 had the market been integrated.” Catherine Hausman on the US electricity transmission network. Link. 

    +   Yu Luo, Ming-ang Zhang, and Sihan Zhang leverage the implementation of the Golden Tax Project III in China to explore how tax enforcement contributes to the improvement of air quality. Link.

    +   “Through the utilization of the geographical factors, the Houthi insurgents managed to execute maritime operations and challenge the superior coalition with limited naval capabilities and unconventional tactics.” By Khaldoon Ahmed Hasson Abdulla. Link. 

    +   “The Kenyan High Court ruling provides the international community an opportunity to replace its plans for a mission that has almost no chance of bringing sustainable security or democracy to Haiti with support for a Haitian-led transition to democracy.” An interview with Brian Concannon. Link.

    +   “As America’s entrance into the war restructured Haiti’s trade, customs revenues fell precipitously. Customs receipts in 1941–42 were lower than at any point in the previous 20 years, including every year of the Depression. The fall came because the war diverted high-tariff imports like cars and cement. Unlike previous revenue shortfalls in the decade, customs remained persistently low for years. Anticipating a sustained shock, President Élie Lescot’s administration rushed to find new sources of revenue. ‘Before many weeks of war had passed, it became evident that new methods would have to be devised and special arrangements made in order to enable the country to ride out the storm.’ The administration appealed to the United States for help, received a line of credit from the Export-Import Bank, and passed a special tax on the country’s largest export, coffee. But its efforts were insufficient.” By Craig Palsson. Link.

  4. Memory

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    This is an archived version of the PW Sources newsletter from Saturday, January 27, 2024. Sign up to receive PW Sources directly to your inbox here.

    BABRI MASJID

    On Monday, Indian Prime Minister Narendra Modi inaugurated the Ram temple in Ayodhya, Uttar Pradesh, marking a triumph for the Bharatiya Janata Party (BJP) and far-right Hindu groups including the Vishva Hindu Parishad (VHP) and the Rashtriya Swayamsevak Sangh (RSS). The temple was built on the site of the Babri Masjid, a 16th-century mosque illegally destroyed by 150,000 Hindu extremists in 1992, in a campaign which incited communal violence across the country. 

    In a 1994 book, NILANJAN MUKHOPADHYAY examines the political actors involved in the temple campaign and the 1992 demolition. 

    From the text:

    “The manifold growth of the BJP in 1989 stemmed from two factors. First, by shrewdly aligning itself with the anti-Congress opposition parties, and sensing that the Indian electorate was keen to jettison the Congress if a viable alternative appeared in the offing. Second, the BJP also reaped the benefits of the Vishva Hindu Parishad’s (VHP) Ram temple agitation. It projected itself as the only political party that considered the temple agitation to be a legitimate one, and a right one at that, to undo the ‘historical wrong.’ The BJP was also aided in its rise to the pivotal position by the inability of other non-Congress parties to assess the ultimate plan of the BJP. This was evident in the manner in which non-Congress opposition parties forged alliances with the BJP, solely to defeat the Congress and paid scant regard to what the BJP could gain from such alliances. This included the communists, who forged indirect political alliances with the BJP, in the general elections of 1989 and in the elections for state assembly in Haryana in 1987. The BJP’s new thrust began in 1986, when Advani was elected president. Shrewdly, the BJP did not get directly embroiled in the VHP agitation. Instead, the party waited for the agitation to gain momentum, and when the political developments started snowballing towards a crisis, the BJP cleverly played the ‘temple card’ and reaped electoral benefits from the supporters of the temple agitation. From the time the VHP launched its temple agitation and started its campaign, the BJP had virtually two machineries at its disposal: its own cadre drawn from the RSS fold, and the neo-converts to the VHP fold.” 

    +  “The VHP’s case is based on false history.” AG Noorani in 1989. Link. And see Noorani’s two-volume The Babri Masjid Question 1528-2003, an extensivedocumentation of the political and legal battles around the mosque. Link. 

    +  “One of the most sinister features of the recent Hindutva movement has been the foregrounding of the militantly communal Hindu woman.” Tanika Sarkar in 1991 on the RSS women’s wing. Link. And Sudha Pai on caste and communal violence in Uttar Pradesh after 1992. Link. 

    +  “A high court in independent India, swearing by the lofty ideals of the Constitution, relies on the ‘faith and belief of the Hindus’ to decide a property dispute, thereby retrogressing to pre-modernity.” Anand Teltumbde on the 2010 Supreme Court decision. Link. And a recent op-ed by Ashoka Mody on the decline of secularism. Link. 

    NEW RESEARCHERS

    Armed Conflict and Deforestation

    TATIANA CANTILLO is a postgraduate researcher at the Land, Environment, Economics and Policy Institute in the University of Exeter. A recent paper co-authored with Nestor Garza studies the impact of the Colombian internal armed conflict on local development processes and deforestation during the 21st century.

    From the introduction:

    “The existing literature does not offer a consensus on the direction of the relationship between armed conflict and deforestation dynamics. Some authors have found that higher conflict intensity is linked to higher deforestation, whilst others have found that the armed conflict has slowed down deforestation. These contradicting results are due to differences in armed groups’ strategies within different spatial and temporal scales. However, to the best of our knowledge, the explicit (theoretically supported) mechanisms by which armed conflict and deforestation change over time and space have not been determined. That is why we develop a novel spatiotemporal theoretical and empirical framework of deforestation determinants in the context of an armed conflict, which we then test using dynamic spatial econometrics.”

    + + +

    +   “The good old days of high economic growth, low inflation, low interest rates, and low exchange rates were over; they had always depended on massive foreign capital inflows.” New on PW, Özgür Orhangazi on the roots of Turkey’s economic crisis. Link. 

    +   “Rather than a basic provision from the state, welfare provisions are marketed and advertised as a benevolent gift from the BJP government, indeed as the beneficence of Modi himself.” New on the Polycrisis, Tim Sahay speaks to Ravinder Kaur about Hindu nationalism and the BJP’s branding campaigns. Link. 

    +   In a new JFI report, Jack Landry analyzes the anti-poverty impacts of Congress’s new proposal for an expanded child tax credit. Link. 

    +   “Globalization of arms production has not led to a convergence of national defense industries into a liberal-market model.” Chonghyun Choi on the South Korean defense industry. Link.

    +   Zhun Xu on the characteristics of land transfer and the current state of farmland concentration in rural China. Link.

    +   Sebastian Diessner on central bank losses and monetary-fiscal coordination in Europe and Japan. Link. 

    +   “The new labour codes are an addition to the series of ‘reforms by stealth’ carried out by the government, to enhance flexibility in the labour market in the guise of promoting employment.” Adwitiya Mishra and Aasheerwad Dwivedi on India’s labor reforms. Link. And see Chirayu Jain’s PW essay on the subject. Link. 

    +   Margaret Myers, Ángel Melguizo, and Yifang Wang on minerals, metals, and changes in Chinese foreign direct investment in Latin America. Link. And see Juan Pablo Spinetto in Bloomberg on China’s Latin America strategy. Link. 

    +   “It is clear from our study that the official history writing and commemorative practices in Iran have not focussed on the World War I famine, nor on other severe famines. Despite its casualties being counted in the millions, other dramatic events have overshadowed the Great Persian Famine (GPF). The Islamic Revolution of 1979 was a watershed when it comes to how Iran’s official history has been narrated and which traumas of the past have been recognised and commemorated. While official memorialisation had a vastly different focus before and after the revolution, the GPF was written out of official history during both periods. In the pre-revolution period, powerholders had an interest in maintaining good relations with the former imperial powers, who had been instrumental in causing the GPF.” By Zahra Edalati. Link.

  5. I Carried On Walking

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    This is an archived version of the PW Sources newsletter from Saturday, January 20, 2024. Sign up to receive PW Sources directly to your inbox here.

    CORPORATE LAW

    Because of their ability to own property, enter into contracts, and stand in court independently of their owners, charted corporations facilitated the long term capital commitment that often underpinned industrialization. Standard accounts hold that states primarily contributed to the rise of the corporate form by credibly constraining their own use of power.

    In a recent article, TAISU ZHANG and JOHN MORLEY challenge this narrative, arguing that the geographical reach, coercive force, administrative power, and legal capacity characteristic of modern states were indispensable to the appearance of the business corporation.

    From the text:

    “The late imperial Chinese economy met all of the primary conditions that scholars have previously identified as necessary for the rise of the business corporation: there was robust long-distance trade both within the empire and with foreign parties, and there was ample credible commitment from the state not to expropriate. Despite these favorable conditions, the legal technologies of asset partitioning and share transferability did not emerge in any significant way. Instead, Chinese firms, through the end of the nineteenth century, tended to be full-liability partnerships with no robust asset partitioning in either direction and, therefore, very little free transferability of shares. The pace of incorporation picked up considerably after 1929, when the Nationalist government issued a new Corporations Law. By 1949, there were some 11,000 corporations operating across the country, over forty percent of which were in capital-intensive industries. What changed? The issuance of a new Corporations Law may have had some impact on investor confidence, but much more importantly, the new regime also embarked on a series of state-building projects that significantly enhanced its socioeconomic control. In other words, the state strengthened its ability to enforce corporation law.”

    +  From 2017, Giuseppe Dari-Mattiacci, Oscar Gelderblom, Joost Jonker, and Enrico C. Perotti examine the influence of corporate law on colonial trade in the Dutch and British East Indian Companies. Link.

    +  “Nonprofit groups advocating social and political change rarely met the requirements necessary to obtain a corporate charter.” Ruth Bloch and Naomi Lamoreaux on incorporation and political mobilization in the nineteenth-century US. Link.

    +  A 1991 book by Thomas Owen “analyses the legal framework imposed on corporations by the imperial Russian Government” and considers their implications for the “development of capitalism on the eastern periphery of Europe.” Link. And a 1995 article by Katharina Pistor assesses the role of corporate law in late twentieth-century Russian privatization. 

    NEW RESEARCHERS

    Collective Agriculture

    In a co-authored paper, PhD candidate in economics at UC Berkeley OLIVER KIM uses satellite imagery to analyze grain yields during China’s transition to decollectivized agriculture in 1978. 

    From the abstract:

    “We study one of the central reforms in China’s economic miracle, the Household Responsibility System (HRS), which decollectivized agriculture starting in 1978. The HRS is commonly seen as having significantly boosted agricultural productivity—but this conclusion rests on unreliable official data. We use historical satellite imagery to generate new measurements of grain yield, independent of official Chinese statistics. Using two separate empirical designs that exploit the staggered rollout of the HRS across provinces and counties, we find no causal evidence that areas that adopted the HRS sooner experienced faster grain yield growth. These results challenge our conventional understanding of decollectivization, land reform, and the origins of the Chinese miracle.” 

    +   “Keynesian wage-led growth has been replaced with trickle-down economics, with poor prospects for growth and redistribution. What went wrong?” New on PW, Kangkook Lee on South Korea’s growth models. Link. 

    +   “Japan has contributed the highest amount of foreign aid and has become the largest donor to Bangladesh since the late 1980s.” By Md. Jahangir Alam and Md. Saifullah Akon. Link. 

    +   Kubra M. Altaytas on the privatization of Turkey’s sugar industry. Link. 

    +   A new paper on the supply, demand, and polarization challenges that could determine the implementation of the Inflation Reduction Act. Link. 

    +   “The recent fervour surrounding the Bihar caste census serves as a reminder of the ongoing struggle between electoral concerns and actual attempts by the state to ameliorate social inequities.” Noel Mariam George on a caste census in India. Link. 

    +   Sharat Ganapati on the growth of “superstar” wholesalers in the US. Link.  

    +   Benjamin Braun on the ECB’s newly-released distributional wealth accounts. Link.

    +   “Amidst the ongoing economic turmoil in Syria, characterized by rampant inflation and the devaluation of the lira, it has become more lucrative for top-tier industrialists and merchants to invest in illicit sectors.” Fidaa Itani on the shadow economy in Syria and Lebanon. Link. 

    +   “Massive immigration that commenced in the 1880s drove policy makers to take quick action to modernize conscription (systems of both obligatory and voluntary military service had existed since colonial times) into a tool to integrate the sons and grandsons of immigrants into the national fabric by fostering a common social and political understanding of what it meant to be Argentine. Extremely low rates of naturalization by immigrants, around 2 percent in 1914, and the parallel rise of anarcho-syndicalism as an essential feature of working-class life, added urgency to this project. Indeed, as Omar Acha notes, the golden years of anarchism coincided with the ‘unfolding of a nationalizing strategy by the state.’ The 1901 conscription law, rendered more effective by 1911 registration legislation, developed into one of Argentina’s most vivid, widespread, and concrete manifestations of nation-building.” By Jonathan Ablard. Link. 

  6. Witnesser

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    This is an archived version of the PW Sources newsletter from Saturday, January 13, 2024. Sign up to receive PW Sources directly to your inbox here.

    INTERNATIONAL LAW

    This week, arguments were presented in South Africa’s proceedings against Israel at the International Court of Justice in The Hague. The landmark case, whose initial results will not be clear for weeks, has placed international law and its voluntary institutions at the forefront of the assault on Gaza. 

    A 2011 collection of essays by legal scholar MARTTI KOSKENNIEMI address the history of international law, its constitution as a professional community, and the theoretical battles over its status in the twenty-first century.

    “The opposition between ‘realism’ and ‘idealism’ in respect to international law is only of limited usefulness. The labels invoke contrasting political sensibilities and different jurisprudential techniques that often merge into each other. Even the hardest realism reveals itself as a moral position (for example by highlighting the priority of the national interest) inasmuch as, ‘philosophically speaking, realism is unthinkable without the background of a prior idealistic position deeply committed to the universalism of the enlightenment and democratic political theory.’ On the other hand, any serious idealism is able to point to aspects of international reality that support it, and needs such reference in order to seem professionally credible. Many lawyers make a more ambitious defense of international law in terms of such practical effects. In their view, international law slowly socializes initially egoistic states into the law’s internationalist spirit. An alternative but parallel approach would be to characterize the system in terms of a ‘culture of civility’ shared by its administrators. Such an explanation resonates with international law’s emergence in the late nineteenth century as an aspect of optimistic evolutionism among elites of Europe and North America.”

    +  Two further books: Jack Goldsmith and Eric Posner’s The Limits of International Law, and Susan Marks’s The Riddle of All Constitutions.

    +  “International law assumes juridical equality and unequal violence.” Link to China Miéville’s book Between Equal Rights. And link to Ntina Tzouvala’s history of international law, Capitalism as Civilization. 

    +  A chapter by Dire Tladi on the role that the ICJ has played in developing international law. Link. And Noura Erakat and John Reynolds on the significance of South Africa’s case at the ICJ. Link.

    NEW RESEARCHERS

    Conscious Consumption 

    In his job market paper, PhD candidate in economics at Stanford University LEVI BOXELL looks at the impact of companies taking public stances on social issues. 

    From the paper:  

    “We study the extent to which individuals’ consumption decisions are influenced by firms’ stances on controversial social issues and the implied incentives for firms to take such stances. We use transactions from a major payment card company to predict cardholders’ likely social alignment with firm stances and to quantify effects on consumption. The social stances taken by firms increase revenue on average, with significant heterogeneity across consumers and firm stances. Consumers most aligned with a firm’s social stance increase their consumption at the firm by 19 percent in the month following widely known social stance events, and consumers most opposed to the firm’s stance decrease their consumption by 11 percent. These diverging consumption responses attenuate over time but persist even a year later. Firms tend to take stances that align with their consumers’ and employees’ social preferences and that correlate with the firm’s ownership structure. Together our results show that consumers meaningfully respond to their social alignment with firms, and that this consumer response can incentivize profit-maximizing firms to engage with social issues.”

    + + +

    +   “What is needed is a new monetary system: democratic choices about what serves as money, who can create it, and what its value is tied to.” New on PW, Pierre-Christian Fink reviews Jakob Feinig’s Moral Economies of Money. Link. 

    +   “In a late-night move on March 31, 2020 … the Indian federal government announced the gazette notification altering over 100 J&K laws and totally repealing about 30.” Anuradha Bhasin on India’s latest Supreme Court decision on Jammu and Kashmir. Link. And see Sehar Iqbal’s PW essay on legal autonomy and land reforms in the region. Link. 

    +   Joseph Politano on the geography of US economic growth since Covid. Link.

    +   “If Lula’s first and second terms created the illusion of painless progress, his third has all but removed social justice from the picture.” André Singer and Fernando Rugitsky on Lula’s return to power. Link. 

    +   Adriana Calcagno on Raúl Prebisch, industrialization, and Latin American growth. Link. 

    +   Shruti Sharma on tariff liberalization and women’s employment in India. Link.

    +   “Nine years after its founding, the Bank folded, swallowing $1.2 million in deposits (approximately $29.6 million today) spread among roughly 61,000 individuals.” Ely Melchior Fair on the Freedman’s Bank Crisis. Link. 

    +   More on vibecessions, from the FT. Link. (And link to the paper, by Jules van Binsbergen, Svetlana Bryzgalova, Mayukh Mukhopadhyay and Varun Sharma.)

    +   “We show that firms that previously relied on EXIM support saw a 18% drop in global sales after the agency closed down, driven by a reduction in exports.” By Poorya Kabir, Adrien Matray, Karsten Müller & Chenzi Xu. Link.  

    +   “Since its first appearance in the late 1800s, the reasons behind the rise of the Sicilian mafia have remained a puzzle. In this article, we argue that the mafia arose as a response to an exogenous shock in the demand for oranges and lemons, following Lind’s discovery in the late eighteenth century that citrus fruits cured scurvy. More specifically, we claim that mafia appeared in locations where producers made high profits from citrus production for overseas export. Operating in an environment with a weak rule of law, the mafia protected citrus production from predation and acted as intermediaries between producers and exporters. Using original data from a parliamentary inquiry in 1881–1886 on Sicilian towns, the Damiani Inquiry, we show that mafia presence is strongly related to the production of oranges and lemons.” By Arcangelo Dimico, Alessia Isopi, and Ola Olsson. Link.

  7. Sea Is Rough

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    This is an archived version of the PW Sources newsletter from Saturday, January 6, 2024. Sign up to receive PW Sources directly to your inbox here.

    RED SEA

    Houthi-led attacks on commercial vessels in the Red Sea have caused major disruptions in maritime trade. With land-locked Ethiopia also recently signing an agreement with Somaliland to gain Red Sea access, the trade route is now the site of multiple geopolitical conflicts. 

    In their 2011 book, ANOUSHIRAVAN EHTESHAMI and EMMA C. MURPHY trace the political evolution of the Red Sea region.  

    “In purely military terms, US access to the Red Sea became an essential aspect of its global strategic planning during the Cold War. Two developments had encouraged this tendency in the 1980s: Somalia’s consent to allow the US Navy to stage P-3 anti-submarine flights out of Berbera to track Soviet submarines passing through the Bab el-Mandeb; and, when Egypt agreed in 1986 to grand nuclear-powered US naval vessels permission to sail through the Suez Canal. For both superpowers, the Red Sea provided the vital maritime link between the continents. According to Cold War strategists, of some 100 internationally significant choke points, there are a handful which can affect the course of a major conflict. Two of three such choke points identified in the Middle East lie along the Red Sea. The reality has not changed with the passing of the Cold War and the blockage of Red Sea choke points remains as bad for business as it does for the strategic well-being of interested actors; with over 10 percent of the world’s seaborne commerce passing through this waterway, equivalent to over 21,000 ships a day, its blockage could immediately disrupt international trade patterns. The ease with which shipping can be disrupted in this waterway was graphically demonstrated in July and August 1984, when some 18 vessels were damaged by sea mines laid near the Gulf of Suez. Almost immediately, Egypt was forced to seek outside assistance in dealing with the crisis. Thus, a mine-clearing operation was launched with direct Western support, involving the naval units of Britain, France, Italy, and the US, as well as Soviet cooperation.” 

    +  “Land-locked Ethiopia is clearly looking to break its heavy dependence on Djibouti, which has handled 90% of its foreign trade since the border war with Eritrea was triggered in 1998.” A 2018 article by David Styan on port development in the Red Sea. Link. And a recent Odd Lots episode on trade impacts, with Craig Fuller from FreightWaves. Link.

    +  “40% of Asia’s trade with Europe transits through the Red Sea.” Luigi Narbone and Cyril Widdershoven on shifting alliances and trade flows. Link. And Riad al Kouri on the geopolitics of the Houthi attacks. Link. 

    + “The scale of customs revenues from the Red Sea trade appears equivalent to the total combined tax income from several provinces.” Andrew Wilson on Rome and the Red Sea. Link. And Caesar Farah on Italian smuggling in the Ottoman-controlled Red Sea during the late-19th century. Link. 

    NEW RESEARCHERS

    Place-based Industrial Policy

    LORENZO INCORONATO is a PhD candidate in economics at the University College of London. His job market paper looks at the long-term impact of a 1960s–70s targeted industrial policy program in Italy called Cassa per il Mezzogiorno, which aimed to reduce regional inequalities between the North and South of the country. 

    From the paper:  

    “The core of this industrial policy were the Industrial Development Areas (IDAs): clusters of municipalities identified as suitable for industrial agglomeration, with the goal of ‘clearly directing the location choices of economic agents’ and ‘establishing positive externalities thanks to the proximity to other industries and workers.’ Combining historical archives spanning one century with administrative data and leveraging exogenous variation in government intervention, we investigate both the immediate effects of PBIP and its long-term implications for local development. We find that the policy led to agglomeration of workers and firms in the targeted areas persisting well after its termination. By promoting high technology manufacturing, the policy boosted demand for business services and favored the emergence of a skilled local workforce. Over time, this shifted the local economy towards high-skill industries and produced a spillover from manufacturing—the only sector targeted by the program—to services employment.”

    + + +

    +   “The challenges of Argentina’s external accounts are not due to faltering commercial or economic competitiveness. Rather, they can be attributed to the nation’s longstanding financial constraints.” New on PW, Ignacio Juncos on the Argentine peso. Link. 

    +   “It was in response to the revolutionary fervor that swept Europe after the First World War that austerity was hatched as a global project.” Also new, Dillon Wamsley reviews Clara Mattei’s The Capital Order. Link.

    +   “In the fifty-six years since it occupied the Strip in 1967, Israel has transformed Gaza from a territory politically and economically integrated with Israel and the West Bank into an isolated enclave, from a functional economy to a dysfunctional one, from a productive society to an impoverished one.” Sara Roy on the political economy of Gaza. Link. 

    +   Mariano Schuster and Pablo Stefanoni on Argentina’s right-wing turn. Link. And a recent PW interview with Mercedes D’Alessandro on Milei and the future of Peronism. Link. 

    +   Brad Setser and Theo Maret on Zambia’s debt restructuring. Link.

    +   “When it comes to the type of limited-scope reforms evaluated by gold standard causal inference methods, change is hard to engineer. A dominant perspective on social change—one that forms a pervasive background for academic research and policymaking—is at least partially a myth.” Megan Stevenson reviews the limited results of fifty years of randomized control trials on criminal justice reforms. Link.

    +   Colin Chia on nationalism and airline liberalization. Link. 

    +   “We investigate the employment consequences of deindustrialization for 1,993 cities in France, Germany, Great Britain, Italy, Japan, and the United States.” By Luisa Gagliardi, Enrico Moretti, and Michel Serafinelli. Link. 

    +   “While France already introduced the principle of the military draft in 1793 (a measure formalized in 1798), it was only under Napoléon that conscription became foundational to the country’s military system and a permanent feature of French society. Every year during Napoléon’s reign, tens of thousands of civilians were forced to abandon their homes and villages and join the army for the following several years. This system faced one major obstacle: draft evasion. This article discusses Napoléon’s response to widespread draft evasion. First, we show that draft dodging rates across France varied with geographic characteristics. Second, we provide evidence that the regime adopted a strategy of discriminatory conscription enforcement by setting a lower (higher) conscription rate for those regions where the enforcement of conscription was more (less) costly. Finally, we show that this strategy resulted in a rapid fall in draft dodging rates across France.” By Louis Rouanet and Ennio E. Piano. Link.

  8. The Buffalo Hunt

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    This is an archived version of the PW Sources newsletter from Saturday, December 17. Sign up to receive PW Sources directly to your inbox here.

    A YEAR IN REVIEW

    In 2023, Phenomenal World sparked discussion across urgent issues of political economy, investigating the IMF, debt, and the dollar; the future of industrial policy in the global South; legacies of the left in Latin America; crucial elections around the world, and more. We look forward to exciting announcements regarding our international coverage, translation projects, and PW book series in the coming year. 

    If you’ve enjoyed reading, we ask that you share this letter with colleagues and friends, and encourage others to subscribe to PW Sources. We will be off until 2024. Until then, here is a roundup of some of our favorite essays, series, and newsletters from the past year. 

    Thank you for reading, and best wishes for the holiday season. 

    PHENOMENAL WORLD

    +  New on Phenomenal World this week: Ignacio Silva Neira on Sunday’s constitutional vote in Chile. Link. For the Polycrisis, Tim Sahay in conversation with Navroz Dubash on COP28 and climate diplomacy. Link. And Maria Fernanda Sikorski interviews Mercedes D’Alessandro on the aftermath of Milei’s victory in Argentina and the future of Peronism. Link. 

    +  In the first PW essay of 2023, Herman Mark Schwartz investigated Schumpeterian growth waves and the “Nokia risk”: “Nokia’s handsets and related telephony equipment accounted for 20 percent of Finnish exports at peak, driving Finland’s current account surplus to nearly 7 percent of GDP. When the Apple iPhone launched in 2007, Nokia’s handset market collapsed, exports fell by half, Finland’s current account swung into deficit, and a decade plus of economic stagnation began.” Link. 

    +  In March, Lin Chun examined fiscal and monetary experiments during China’s Communist Revolution: “The red banks functioned as central banks while playing a range of microeconomic roles as commercial banks as well. The Northeast Bank followed this pattern to issue and solidify its dongbeibi after Japan surrendered. The revolution took the whole region in the next few years and turned the northeast into its own gigantic industrial and financial powerhouse.” Link. 

    +  Amid conversations around the CHIPS Act and US-China competition over semiconductor production, Susannah Glickman wrote about Intel: “In recent years, interventionist policy has fallen out of favor, and American chipmakers like Intel now find themselves lagging behind competitors in Taiwan and Korea. Following the panic that surrounded pandemic supply-chain shortages, semiconductors have returned to their earlier status as a litmus test for American power and decline.” Link. 

    +  This year, we published on the politics of agribusiness. Guilherme Delgado and Sérgio Periera Leite interrogated the reprimarization of the Brazilian economy: “‘Primary specialization’ does not enhance Brazil’s autonomy in external economic relations or foreign trade. Rather, it intensifies an economy-wide dependence on primary goods exports, gradually displacing other sectors—in particular, manufacturing goods exports.” Link. And Shreya Sinha questioned the results of industrial agricultural in Indian Punjab: “Defying the conventional development narrative, increased investment in the agricultural sector has not automatically led to industrial development or increased employment.” Link. 

    +  In April, we launched a new series by Elham Saeidinezhad on market microstructures, examining the origins of financial stability and crisis. Thus far, Saeidinezhad has written on new SEC regulations, the global payments system, and the changing nature of interest rate swaps. Each column has beenaccompaniedby an interview to illuminate the decision-making processes of financial actors. Link to the series. 

    +The Polycrisis, led by Kate Mackenzie and Tim Sahay, has consistently published on the shifting dynamics of climate change and the global financial architecture. The Polycrisis newsletter has covered topics like the hottest summer in recorded history, climate investments in Africa, the energy transition in the Gulf, and Pakistan’s debt crisis. Longer investigations include Mona Ali on NATO’s climate framework, Advait Arun on private financing, and an interview with Isabella Weber on inflation’s drivers. The project has been shared in a variety of media outlets, including the Financial Times Alphaville and the New York Times.

    PW SOURCES

    +  In February, a 7.8 magnitude earthquake struck Turkey and Syria, causing over 50,000 deaths. A 2012 paper by Osman Balaban looks at Turkey’s construction boom in the previous decade: “The construction boom of the 2000s took place largely in an unplanned manner. In many cities, profit-oriented and speculative attempts of developers were regarded as signs of ‘good business climate’ and welcomed by public bodies without questioning their potential impacts. In this sense, public sector has supported recent construction boom by adopting various legal arrangements and amendments. Most of these were in form of deregulation in order to facilitate real estate and construction investments.” Link to the newsletter, link to the paper. 

    +  In May, we spotlighted Alice Amsden’s classic 1992 study of South Korea’s industrialization: “[South Korea] has involved a high degree of state intervention to get relative prices ‘wrong’ in order to overcome the penalties of lateness, the growth of large diversified business groups to transcend the hardships of having to compete without the advantages of novel technology, the emergence of salaried managers responsible for exploiting the borrowed technology, and a focus on shop floor management to optimize technology transfer. In other countries—in Turkey and India, for example—subsidies have been dispensed primarily as giveaways. In South Korea the wrong prices have been right because government discipline over business has enabled subsidies and protection to be less than elsewhere and more effective.” Link to the newsletter, link to the book. 

    +  As sovereign debt crises peaked in Sri Lanka, Zambia, and elsewhere across the globe, we shared a 2009 paper by Tanzanian scholar Issa Shivji on structural adjustment programs in Africa: “Unleashing the market meant doing away with protection of infant industries and rolling back the state from economic activity. The results were devastating: education, medical care, health, nutrition, rates of literacy, and life expectancy all declined. Deindustrialization set in. Redundancies followed. Even some of the modest achievements of the nationalist period were lost or undermined.” Link to the newsletter, link to the book. 

    +  Amid the ongoing assault on Gaza, we spotlighted Ahmed Tannira’s 2021 chapter on the political economy of the Strip: “After victory in the Palestinian Legislative Council elections in 2006, Hamas formed its own government. Consequently, Israel withheld the transfer of Palestinian tax revenue, which in 2006 constituted approximately 40% of the PA’s budget, and enforced further punitive measures that included tightening control over Gaza’s six land crossings. This collective punishment had an immediate impact on Gaza’s industrial sector. It was estimated that more than 90% of factories in the Strip had closed and the remaining 10% continued to work with minimum workforce capacity… This deterioration continued through 2009 resulting in more than 65% of the labor force becoming unemployed.” Link to the letter, link to the text. 

  9. Procession

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    This is an archived version of the PW Sources newsletter from Saturday, December 9. Sign up to receive PW Sources directly to your inbox here.

    TECHNOLOGY AND GROWTH

    The global energy transition and the specter of AI have led to predictions of massive changes to the global social and economic system—fundamental transformations of production, employment, and governance.

    In a 2016 paper, economist CARLOTTA PEREZ takes a neo-Schumpeterian approach to the question of stagnation and growth in the twenty-first century:

    “Historically, the innovation potential of each major technological revolution has been shaped and steered by government, society and business in periods that are very similar to the present, when the recessions following major bubble collapses have led to widespread fears of joblessness and secular stagnation. Pessimism is a recurrent phenomenon based on the stalling of innovation, after major bubble collapses, in spite of the existence of plenty of technological possibilities. It results from the decoupling of the financial sector from the production economy during the boom and its reluctance to take risks investing in the real economy after the experience of the crash.” 

    +  “Certain types of technical change—defined as changes in ‘techno-economic paradigm’—have such widespread consequences for all sectors of the economy that their diffusion is accompanied by a major structural crisis of adjustment to bring about a new ‘regime of regulation.'” A 1988 paper by Perez and Christopher Freeman on business cycles and investment behavior. Link. And a 2021 paper by Perez on innovation and growth. Link.

    +  Leonard Reich’s 1985 book on the invention of industrial research in the United States, at General Electric and Bell. Link.

    + “Dynamic growth required radical innovation in five interconnected areas: new modes of transportation, new energy sources, new consumer goods, new general purpose production technologies, and, though he underemphasized this, new legal organization or governance structures for firms.” Herman Mark Schwartz on Schumpeterian waves and the “Nokia Risk.” Link. h/t to HMS for recommending the work of Perez.

    NEW RESEARCHERS

    Trade unions in Zambia

    JUSTINA NAMUKOMBO is a lecturer in the Department of Government and Management Studies at the University of Zambia. A paper co-authored with Clever Madimutsa studies the changing composition of the Zambian working class. 

    From the paper:  

    “When the Movement for Multiparty Democracy formed a government, it decided to liberalise the economy by implementing structural adjustment policies spearheaded by the International Monetary Fund and the World Bank. This entailed decontrol of prices of goods and services, decontrol of exchange rates, free trade and downsizing of the public sector, among others. Downsizing of the public sector was done through the implementation of two programmes, namely, privatisation and public service reform programmes. The implementation of these programmes resulted in job losses in the public sector which had guaranteed workers formal jobs. For instance, the number of workers in state-owned enterprises reduced from more than 100,000 in the 1980s to 58,581 in 2014. For central and local governments, their combined workforce reduced from 180,000 in 1993 to 104,000 in 2000. Because of these job losses, the informal sector became the major employer in the country. In 2014, only 0.6 million out of the total labour force of 6.3 million (i.e. 10 percent) were formally employed while the majority (i.e. 90 percent) were either informally employed or unemployed. Because of job losses resulting from the implementation of the privatisation and public service reform programmes, trade unions lost their membership. For instance, the membership of the Civil Servants and Allied Workers Union of Zambia reduced from 65,000 in 1995 to 17,000 in 2010.” 

    + + +

    +   “While the AfCFTA is ambitious in many areas, it doesn’t necessarily align with domestic political ambition.” New on PW, Michael Odijie on free trade and industrial policy in Africa. Link. 

    +   “What is the appropriate role for institutions with unrivaled power—and high levels of political independence—to shift the financial conditions that are critical for a response to climate change?” Monica DiLeo, Glenn Rudebusch, and Jens van ‘t Klooster on green central banking at the ECB and the Fed. Link. 

    +   “Mass assassination factory.” Yuval Abraham’s +972 investigation on Israel’s aerial bombardment program assaulting Gaza. Link. And the Financial Times on Israeli bombs. Link.

    +  “The silences of Bretton Woods on gender inequality and racial discrimination were particularly striking because its delegates were asked, less than two months before the conference began, to consider these issues by a high-profile body: the International Labour Organization.” By Eric Helleiner. Link.

    +   Nathan Tankus on accounting gimmicks and the debt ceiling. Link.

    +   “Most of the SLLDP farm beneficiaries are capitalists from non-agrarian sectors who increasingly see land reform as the new frontier for accumulation.” Farai Mtero, Nkanyiso Gumede, and Katlego Ramantsima on land redistribution in South Africa. Link. 

    +   Employ America’s “playbook” for Fed policy in 2024. Link.

    +   “This paper explores the impact of water quality on mortality by exploiting a natural experiment: the rise of tea consumption in eighteenth century England. This resulted in an unintentional increase in consumption of boiled water, thereby reducing mortality rates. The methodology uses two identification strategies tying areas with lower initial water quality to larger declines in mortality rates after tea drinking became widespread and following larger volumes of tea imports.” By Francisca Antman. Link. 

  10. Les Fanatiques

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    This is an archived version of the PW Sources newsletter from Saturday, December 2. Sign up to receive PW Sources directly to your inbox here.

    NAGORNO-KARABAKH 

    In September, Azerbaijan launched a military attack on Nagorno-Karabakh. The majority ethnic Armenian enclave inside Azerbaijani borders has been the site of territorial disputes since its creation within the Azerbaijan Soviet Socialist Republic in 1923. But the latest conflagration resulted in a ceasefire whose terms included the disarming of Armenian separatist groups, the announcement of the dissolution of the enclave’s Armenian government, and almost all of the territory’s 120,000 ethnic Armenians fleeing west across Armenia’s borders. 

    In a 2003 book, Thomas de Waal reconstructs the history of the Nagorno-Karabakh conflict.

    From the text:

    “From 2004, President Ilham Aliev slowly established himself as leader of Azerbaijan. The main reason for his  success was the huge economic lift delivered by Azerbaijan’s new oil boom. In 2006, the Baku-Tbilisi-Ceyhan (BTC) pipeline was inaugurated. At a length of 1100 miles or 1768 km, it was the second longest pipeline in the world, shipping oil from the Azerbaijani sector of the Caspian Sea via Georgia to Turkey and then on to Western markets. Azerbijan was now host to an oil-and-gas route that was beloved by Western oil companies and politicians for being under the operational control of BP and bypassing both Russia and Iran. Azerbaijan was the world’s fastest growing economy in the years 2005–2008 and in 2008 its GDP had risen to $35 billion, having been just $1.3 billion in 1991. Oil revenues completely dominated the economy, comprising more than 90 percent of the country’s exports. The new State Oil Fund of Azerbaijan was set up in 2000 to manage revenue flows and had accumulated assets worth more than $22 billion in early 2011. Azerbaijan’s foreign ministry expanded rapidlly. Azerbaijani military spending had topped $3 billion and exceeded the entire Armenian state budget—an explicit goal the Azerbaijan leadership had set itself.  Five years before, Baku had embarked on a new arms race, acquiring heavy artillery, MiG-25 fighter aircraft, tactical midrange and long-range missiles, and multiple launch rocket systems. Although they constituted a threat of war, the declared aim was to force Armenia into an arms race it could not afford and therefore into concessions at the negotiating table.”

    +  “The EU also wants to keep Azerbaijan on side for energy reasons: its natural gas resources could make up for the embargo on Russian gas.” Constant Leon in Le Monde Diplomatique. Link. A SIPRI report on arms sourcing in the conflict. Link.

    +  “The economic effect of a resolution of the Nagorno-Karabakh conflict on Armenia and Azerbaijan,” by David Saha, Ricardo Giucci, Matthias Lücke, Robert Kirchner, Veronika Movchan, and Georg Zachmann. Link.

    + “In the New Left Review, Georgi Derlugian explores the history of the conflict. Link. And a Times op-ed from October by Derlugian on the exodus. Link.

    NEW RESEARCHERS

    Pentecostal TV

    MARCELA MELLO is a PhD candidate in economics at Brown University. Her job market paper examines media dispersion and the Pentecostal movement in Brazil.

    From the paper:  

    “We study the socioeconomic consequences of adherence to the Pentecostal movement in Brazil, using exposure to a church-affiliated TV channel as a source of quasi-random variation in religiosity. Our empirical strategy exploits the placement of transmitters prior to the channel becoming religiously affiliated. Results show that exposure to this TV channel increased the number of Pentecostals in Brazil (30% increase compared to baseline) ten years after change of ownership. Consistent with the church’s prescriptions, municipalities exposed to this TV channel had higher fertility rates, lower female labor force participation, lower schooling for young women, and more votes for Pentecostal candidates. We find no effects on schooling for boys. Results persist in following 20 years. In an event-study framework, we exploit the expansion of RecordTV over time to show that the number of Pentecostal churches increases following the introduction of channel in the municipality.”

    + + +

    +  ” The proliferation of state-led industrial policy across the global South in recent decades holds a crucial lesson: there is not one path to economic transformation.” New on PW, Jojo Nem Singh offers a comparative study of industrial policy. Link. 

    +  “Most of the countries in the Sahel are now under the control of military juntas.” Tamas Gerőcs on French colonial legacies and recent coups in in West and Central Africa. Link. 

    +  Mariana Mazzucato and Laurie Macfarlane examine mission-oriented development banks. Link. 

    +  “I demonstrate that the number of military operations significantly increased in the lead-up to elections, which strongly indicates the extent of instrumentalisation.” Huseyin Zengin on the Turkish army and Erdogan’s AKP party. Link. 

    +  Francisco Javier Bonilla on extractivism and political clientelism Panama’s most recent anti-mining protests. Link.

    +  Brad Setser on Argentina, Milei, and the dollarization question, on Odd Lots. Link.

    +  “Building on the BJP’s increased organizational capacity is the mobilization of state welfare benefits by the party and the concerted effort to convert welfare recipients into supporters.” Shashank Chaturvedi, David Gellner, and Sanjay Kumar Pandey on the 2022 state elections in Uttar Pradesh, India. Link. 

    +  “This paper empirically examines the role of gender diversity in inventive activity during the first and second industrial revolutions. The analysis of systematic data on patents and unpatentable innovations uniquely enables an evaluation of women’s creativity within both the market and nonmarket sectors. British women inventors were significantly more likely than men to focus on unpatentable innovations in consumer final goods and design-oriented products that spanned art and technology, and on uncommercialized improvements within the household. Conventional approaches that fail to account for nonmarket activity and for such incremental changes in consumer goods and design innovations therefore significantly underestimate women’s contributions to household welfare and overall economic progress.” By B. Zorina Khan. Link.