Monthly Archives: February 2009

Volcano Monitoring and Climate Change Negotiations

A couple of days ago, Paul Krugman took Louisiana Governor Bobby Jindal to task on his response to President Barack Obama’s Tuesday night speech.  In his response, Jindal criticized the government for its wasteful spending, highlighting two examples: $140 million spent on volcano monitoring and $8 billion for high speed rail projects, including a magnetic levitation line from Las Vegas to Disneyland. Setting aside the accuracy of the claims regarding the two projects (people on both sides of the debate have challenged both the figures and the accuracy of the description of the two projects), Jindal’s criticism does point to an interesting and important questions.  What should the government be doing?

This simple question is at the heart of the political and philosophical divide between conservatives and progressives in American politics.  Conservatives echo Jindal’s sentiment that, “The strength of America is not found in our government. It is found in the compassionate hearts and the enterprising spirit of our citizens” (which itself is a refrain of President Ronald Reagan’s famous statement, “Government is not the solution to our problems; government is the problem.”)  Progressives argue that government should play an active role in ensuring all Americans enjoy certain basic and fundamental rights, including livelihood.

Beyond these philosophical differences, however, Krugman rightly points out that historically conservatives and progressives agreed that the government also had a role in addressing collective goods problems.  Collective goods are characterized by two important features which differentiate them from other goods.  They are non-rivalrous and non-exclusive.  Non-rivalry means that one person’s use of the good does not diminish another person’s ability to use that same good.  Non-exclusivity means that it is not possible to prevent people who have not paid for that good from benefitting from the provision of that good.  The classic example of a collective good in international relations is national defense.  Because of these two characteristics, the private market generally under-produces collective goods.  Both progressives and conservatives thus agree that the state should provide for public goods like national defense.

Here’s the problem, though.  Volcano monitoring is clearly an example of a public good.  We have a collective interest in ensuring that communities living near volcanoes have sufficient warning in the event of an eruption.  And clearly the market will tend to under-produce volcano monitoring, as it exhibits the characteristics of a collective good: one person knowing about a forthcoming eruption does not prevent others from having the same knowledge, and it is not practical to warn only those who have contributed to the volcano monitoring of a forthcoming eruption. High speed rail may be a bit more complicated, but most rail networks rely to a greater or lesser extent on public financing, primarily because of the nature of rail transit itself (lending itself to monopolistic characteristics). 

At the international level, though the problem is even more difficult.  At the domestic level, we can look to the state to provide collective goods—assuming, of course, that we can agree on what they are.  At the international level, there is no overarching authority to look to.  The nature of the international system thus makes collective goods even more difficult to provide.  Indeed, historically the provision of collective goods at the international level has tended to rely on the goodwill and desires of a particularly powerful state (e.g., through hegemonic stability theory), or through difficult and convoluted negotiations around national interests.  The lack of a higher authority with the ability to enforce its decisions means that states (behaving rationally) would hope to free ride on the goodwill and generosity of others.  But if all states do that, the collective good will be under-provided.

And thus the difficulty of international negotiations.  The problem of global climate change exhibits many of the characteristics of a collective good.  Yet states have incredible difficulty in reaching consensus on developing a framework to address the problem of climate change.  International negotiations underway this year are intended to develop a post-Kyoto framework to reduce global greenhouse gas emissions.  The likelihood of success will depend on the degree to which states can address the collective good dilemma that characterize talks in this area.  And if progressives and conservatives in the United States can’t agree that volcano monitoring is a collective good, I’m afraid that any real agreement at the global level around the issue of climate change may prove even more elusive.

You can see Barack Obama’s speech on the MSNBC website .  A transcript is available at the official White House website.  The video of Bobby’s Jinal’s response as well as the transcript of his speech  are both available at his official website.

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Five Stories You Might Have Missed

Perhaps the most shocking news from the previous week came in a series of stories and rumors that the U.S. government may move to nationalize some banks in an attempt to address the ongoing global economic crisis.  In an interview on Tuesday, former Federal Reserve Chairman (and ardent free marketeer) commented that, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.” In the same story, Republican Senator Lindsey Graham concurred, noting, “If nationalization is what works, then we should do it.” Speculation that Citibank and Bank of America may be the first banks to be nationalized drove their stock values down and led to both dramatic selloffs on Wall Street and a sharp increase in the price of gold, normally used to hedge against uncertainty. The events forced the Obama administration to attempt to reassure global markets, as White House Press Secretary Robert Ribbs said, “This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government. That’s been our belief for quite some time, and we continue to believe that.” Remember when the Democrats were the ones who wanted greater government control over the economy, and Republicans opposed such intervention? Seems the global financial crisis makes the conventional wisdom less and less relevant.

Here are five stories from the previous week you might have missed if you’ve been trying to keep the players in the nationalization debate straight:

1. On Friday, the government of Mexico confirmed the country was following the general trend in much of the rest of the world, heading into recession. In the final quarter of 2008, the Mexican economy contracted by 1.6 percent. In an attempt to stimulate the economy, the government cut interest rates. But close ties to the ailing U.S. economy have acted as a drag on the Mexican economy, undermining the ability of the Mexican government to develop an effective stimulus program.

2. The United Nations-backed naval taskforce in the Gulf of Aden appears to have been generally successful in addressing the problem of piracy in the region. A number of U.S. and E.U. naval vessels, as well as ships from several other navies, have been operating off the coast of Somalia in an attempt to curtail the piracy which had become endemic to the region. The government of Somalia remains unable to assert control over its territorial waters, and piracy was one of the few ways in which Somalis were able to earn a living.

3. The government of Pakistan and Taliban fighters in the northwestern part of the country agreed to a “permanent ceasefire” on Saturday.  In exchange for agreeing to the ceasefire, the Pakistani government has offered to reinstate Islamic sharia law in the region. Many observers are concerned that the ceasefire may create a safe haven in Pakistan for Taliban and al Qaeda fighters could regroup.

4. Latvia’s Prime Minister, Ivars Godmanis, became the second victim of the global financial crisis on Friday, as he was forced to resign from office amid widespread popular protest. Like the government of Iceland before it, the Latvian government had been forced by the global economic downturn to launch a series of austerity measures imposed by the International Monetary Fund. A number of other countries in Central and Eastern Europe, including Hungary and Ukraine, have already implemented structural adjustment programs. Several others, including Serbia, Romania, Lithuania, and Estonia, are also seen as vulnerable.

5. The conflict in Sri Lanka continues. After the government had made significant advances into rebel territory over the past several weeks, Tamil Tiger rebels responded on Friday night with a surprise air raid on the Sri Lankan capital, Colombo. Initial reports indicated that at least 42 people were injured in the attack. An estimated 70,000 people have been killed since the civil war began in 1983.

The Politics of Coalitions

President Shimon Peres asked Benjamin Netanyahu, leader of the conservative Likud Party in Israel, to form the new government on Friday.   Elections held last week produced a sharply divided Knesset (the Israeli parliament).  

Like many countries around the world, Israel uses a closed list proportional representation system, which means that voters cast ballots for parties rather than for individual candidates to represent them in parliament.  Parties send a number of delegates to the national legislature based on the proportion of the popular vote they receive.  So, for example, if a party wins 45 percent of the popular vote, it would be entitled to 45 percent of the seats in the legislature.

In the most recent Knesset elections, held on February 12, 2009, twelve parties won seats in the legislature.  The largest, Kadima, won 22.47 percent of the popular vote, entitling it to 28 seats (of the total 120 seats) in the Knesset.  Likud came in second place, with 21.61 percent of the popular vote, giving it 27 seats in the parliament. Some 21 additional parties also ran but failed to garner more than 2 percent of the nation-wide vote.  Under Israeli election law, these parties receive no representation in the Knesset.  Election results are listed below.

Party                    Percentage of the Popular Vote          Number of Seats
Kadima                                         22.47                                               28
Likud                                             21.61                                                27
Yisrael Beiteinu                         11.70                                              15
Labour Party                                9.93                                               13
Shas                                                  8.49                                              11
United Torah Judaism              4.39                                                5
United Arab List-Ta’al               3.38                                               4
National Union                             3.34                                              4
Hadash                                             3.32                                              4
New Movement-Meretz            2.95                                              3
The Jewish Home                        2.87                                              3
Balad                                                 2.47                                              3

The outcome of the Israeli elections demonstrate some of the challenges faced by parliamentary systems which use proportional representation electoral systems.  While such systems more accurately reflect the will of the electorate by allowing third party candidates to be represented in the national legislature, they also necessitate the development of coalitions to create majorities in the parliament.  Without a majority in the parliament, the ruling party cannot govern effectively—witness recent challenges in Canada

Netanyahu’s proposal to create a unity government, which brings in center-right and center-left parties into a single coalition, has already been rebuffed by Kadima and Labour, the two most obvious coalition partners.  Without their support, it appears that Netanyahu may have to rely on far right parties to secure a legislative majority.  Such a political maneuver—while perhaps necessary to establish a government in Israel—would further complicate peace efforts in the Middle East.  The incoming Israeli government faces a serious challenge, then.  If Likud forms a government of national unity, brining center-left and center-right parties under a single coalition, it risks creating an unstable government which may not be able to effectively rule the country.  If, on the other hand, Likud reaches to the right, forming a coalition with some of the parties on the far right, it may create a more stable government, but it would also be a government much less likely to move forward with the peace process.  Either way, Israeli politics should provide some interesting material for the study of international and comparative politics moving forward.

Five Stories You Might Have Missed

The meeting of the Group of Seven, or G7, took place in Rome on Saturday.  And while anti-poverty campaigners appealed for the group to address the problem of increasing global inequality and rising poverty, the primary focus of the annual meeting was the global economic crisis.  Following the dispute over the inclusion (and subsequent removal) of buy-American provisions in the U.S. economic stimulus package, the G7 felt the need to include a commitment to use “the full range of policy tools” to address the global downturn while simultaneously renewing commitments to avoid protectionist measures.  This amid news that the Eurozone has now entered its worst slump in fifty years, with the Eurozone GDP falling 1.5 percent in the fourth quarter of 2008, and the German GDP falling by 2.1 percent of the same period.  Amid the poor economic news, the European Central Bank is expected to cut its prime interest rate to 1.5 percent, its lowest rate ever.  The U.S. Federal Reserve’s federal funds rate has already been effectively reduced to 0 percent.

In other news from the previous week:

1.  A U.S. missile strike in the South Waziristan region of Pakistan (along the Afghan border) on Saturday killed at least 25 al Qaeda-linked militants.  The drone-launched missile was the third such strike since President Obama took office.  The Pakistani government has been undercut the influence of militants in the region, believed to be a bastion for al Qaeda.   But the continued strikes by the U.S. also threaten to undermine the legitimacy of the Pakistani government.

2. Israel announced it would not agree to a ceasefire with Hamas unless an Israeli soldier held since he was kidnapped in a cross-border raid in 2006.  The Israeli position appears to complicate efforts to reach a permanent ceasefire.  A series of rocket attacks and retaliatory strikes (or strikes and retaliatory rocket attacks, depending on whose press you read), has made establishing a lasting ceasefire between the combatants more difficult.  Further complicating the situation were Israeli elections held last week.  The elections handed Tzipi Livni’s centrist Kadmina party a narrow one-seat victory over the rival center-right Likud party under Benjamin Netanyahu.  The close victory has left both parties scrambling to line up potential coalition partners, leaving the final outcome of the election uncertain.

3.  The outlook for the ongoing crisis in Zimbabwe appeared to brighten a bit last week, as a unity government took office.  Under the terms of the agreement, Robert Mugabe will remain President of Zimbabwe.  His political rival, Morgan Tsvangirai, will become the country’s prime minister.  The government of national unity appears to have—at least temporarily—brought to a close the country’s ongoing political crisis.  But how long this remains the case is unclear.  By Friday, the arrest of Roy Bennett, Tsvangarai’s nominee for deputy agriculture minister, on charges of treason raised questions about the degree to which the new government represents a real break with the past.    Further, the heavy lifting of addressing a national cholera outbreak and brining the country’s economy back from total collapse remains on the to-do list. 

4. The situation in Afghanistan appears to be deteriorating.   A series of bombings and well-coordinated attacks by gunmen over the last several days has left dozens of people dead.  While such attacks had become increasingly common in the Taliban-dominated areas along the Pakistani border, the most recent attacks occurred in what had historically been viewed as the safest region of the country—its capital, Kabul.  Analysts view the attacks as an indication of the increasing support and sophistication of Taliban-backed forces.  The attacks come amidst indications that the Obama administration is considering a request to increase by 30,000 the number of troops deployed to Afghanistan.

5. Disputes between European Union member states over the structure and nature of efforts to address the global economic crisis have led to tension within the Union.  On Tuesday, the Czech Republic’s prime minister (and current president of the European Union) accused the member state governments of engaging in policies that threaten to “deform” the Eurozone.  On Wednesday, in an indication of how serious the dispute is, the European Union scheduled two emergency summits to address the crisis, suppress protectionism, sustain employment, and prevent the bloc’s political fragmentation into old and new member states.

Five Stories You Might Have Missed

The global economic crisis continues to expand.  Despite the announcement of a tentative agreement on a $827 billion stimulus package in the U.S. Senate and announcement of a $200 billion lending facility by the U.S. Federal Reserve intended to encourage more lending by banks and credit card companies, the economic numbers continue to decline.  Despite being relatively insulated from global markets, Brazil announced a large slump in output and a decline in jobs last week.  Following an announcement that the national economy contracted by 4.6 percent in December—the largest contraction since reunification in 1990s—and more than 2 percent last year, the German Economic Minister, Michael Glos, offered to tender his resignation.  Many observers are also concerned that some of the stimulus packages proposed by national governments may rekindle protectionist measures.  (Indeed, the Financial Times now carries a special section, updated regularly, on “The New Protectionism.”)   

In news from outside the financial crisis last week:

1.  In the first major foreign policy speech of the Obama administration, Vice President Joe Biden proposed to “press the reset button” on relations with Russia, noting that despite policy differences in many areas, the U.S. and Russia could still work together on areas of mutual interest and concern.  The conciliatory tone did not include a review of the U.S. missile defense system, which has angered Russia.  In recent weeks, the Russian government has announced a series of initiatives, including plans to establish naval and air bases in Abkhazia, an air defense treaty with Belarus, and a collective security organization which includes many of the former Soviet republics.

2. A Pakistani court last week released Abdyl Qadeer Khan from house arrest.   Khan is the nuclear scientist responsible for the development of Pakistan’s nuclear capabilities.  He is also believed to have played a key role in the proliferation of nuclear equipment and know-how to North Korea, Iran, and Libya.  Khan’s role in the Pakistani nuclear program made him a national hero, and many Pakistanis believe the evidence against him was fabricated.  But under threat of sanctions, the Pakistani government placed Khan under house arrest five years ago.  His release was greeted by disappointment from the United States and France.  Despite the move, Pakistan is still hoping to woo more aid from—and potentially a closer relationship with—the United States.

3.  With elections for the Israeli Knesset scheduled for Tuesday, polling over the weekend suggested the race would be much closer than anticipated.  Early polling had suggested that the center-right Likud party would cruise to an easy victory, as most Israelis were identifying security as their primary concern and Likud was seen as strong on security.  But recent polling data suggests that neither Likud nor the center-left opposition Kadima party will win a majority, forcing either to enter into negotiations with minority parties to form a government.  Meanwhile, polls from Gaza show a sharp spike in support for Hamas following Israel’s three-week military offensive in the Palestinian territory,  suggesting that Hamas may actually have been strengthened by the campaign.

4.  The longstanding drought in Argentina continues.  The drought, the worst in nearly fifty years, threatens the collapse of Argentina’s agricultural exports.  As one of the world’s second largest exporter of agricultural commodities and livestock, the projected collapse of exports from Argentina threaten global food supplies.  World food prices had declined form their record highs set in 2007-08 in part on projections of increased production from Argentina.  Global market prices for rice, wheat, and soy have already increased 20 percent in the last two months, and with declines now projected for Argentina’s wheat, corn, and soy output, world prices are projected to continue to increase.  In an unrelated development, the Chinese government declared an emergency in response to drought conditions in central and northern China.  The Chinese drought undermined wheat production.

5.  Relations between British Prime Minister Gordon Brown and French President Nicolas Sarkozy stumbled late last week after Sarkozy declared that Brown’s proposal to temporarily cut the value-added tax in an attempt to stimulate the economy would have “absolutely no impact,” arguing that Britain “doesn’t have any industry left” and its banks were “close to ruin.”  Brown is already facing strong domestic opposition from the opposition Conservative Party, whose leader, David Cameron, sized on the French president’s comments.

The Immigration Debate

On Jon Stewart’s Daily Show the other night, correspondent John Oliver met with Kenyan ambassador to the United Nations, Azchary Muburi-Muita.  Their conversation focused on the need for Kenyan expertise in the United States.  They already gave us a Head of State, Oliver argued.  Now we need a Banking Czar, Car Czar, a new American Idol, and so on.  In the second half of the interview, Oliver raised the question of British recolonization of Kenya–much to the dismay of the Kenyan ambassador. 

The clip is available through the Daily Show website.  The exchange follows the classic formula of other Daily Show interviews, and pointed to some real issues as well.

Perhaps the most important question centers on the political economy of global immigration.  The immigration debate in the United States tends to focus on illegal immigration by unskilled workers.  However, from the perspective of many developing countries, an equally important problem of the out-migration of highly trained professionalize, often referred to as the brain drain. 

It is estimated that 30 percent of sub-Saharan-born doctors and 15 percent of its nurses work outside Africa.  Training a doctor in Mozambique, to pick one example, costs the state approximately U.S. $80,000.  There are some benefits that accrue from immigration–certainly for the individual, who is able to earn much higher wages in working in Western hospitals than African ones; and likely for the family and the economy more generally, largely through wages sent home through remittances.  And, as Michael Clemens points out, we can’t necessarily assume that doctors working in the developing world necessarily translate directly into better health care systems.  That said, the cost of training doctors, nurses, and other professionals represents a real and uncompensated cost for the countries of the developing world.

Certainly something to think about next time the immigration debate reheats.

Five Stories You Might Have Missed

The annual meeting of the World Economic Forum took place in Davos, Switzerland, over the weekend.  The forum is intended to provide world economic leaders an opportunity to meet to discuss issues of global importance.  The meeting is normally incredibly cordial, as the economic focus of the conference provides an opportunity to move beyond traditional political wrangling that characterizes official meetings of heads of state.  This year, however, the Gaza crisis prompted the Turkish prime minister to leave the meting in protest and tension filled the air.  In general, this year’s forum has been dominated by discussion of the global economic crisis  British Prime Minister Gordon Brown warned against a rising tide of protectionism similar to the trend that occurred leading into the Great Depression, while bankers cautioned the U.S. government against political interference in banking operations

In news outside Davos this week:

1.  Provincial elections in Iraq on Saturday were generally peaceful.  Although the final tally will take more than two weeks to complete, preliminary results indicate voter turnout was 51 percent, a slight decline from 2005.  Turnout in Sunni provinces, which had previously dismissed the electoral process as biased against their interests, was particularly high.  With more than 14,000 candidates competing for just 440 seats, there are bound to be a large number of disappointed political parties and candidates.  The question that worries observers now is: how do those who lose the vote respond?

2.  A last-ditch effort to craft a government of national unity in Zimbabwe appears to have been successful, as Morgan Tsvangirai’s Movement for Democratic Change agreed on Friday to join Robert Mugabe’s ruling Zimbabwe African National Union, Popular Front to govern the country.  Once one of the wealthiest and most productive countries in the region, Zimbabwe has gradually collapsed into economic chaos.  With the unemployment rate at an estimated 95 percent, the World Food Programme estimates that up to 70 percent of the country’s population may require food aid in the next six months.  In an effort to deal with the crisis and bring the country’s rampant inflation—currently believed to be running as high as a quadrillion percent (that’s 1,000,000,000,000,000%, incase you’re wondering) under control, the government last week also removed restrictions on using foreign currencies for economic transactions within Zimbabwe.  It is now possible—indeed likely—that bread, gas, and other basic commodities will be priced in U.S. dollars, pound sterling, South African rand, or other foreign currencies.

3.  The crisis over the future of South Ossetia and Abkhazia, which was at the heart of a diplomatic standoff between the United States and Russia lat year, has once again reemerged on the international stage.  Russia has announced plans to construct a new naval base in Abkhazia, a move which Georgia claims will undermine its national sovereignty.  Meanwhile, in an apparent overture to the west, Russia has suspended plans to deploy a missile station in Kaliningrad.  Russia had announced its intention to deploy cruise missile batteries in the enclave last year after the United States moved forward with plans to deploy its missile defense shield in Eastern Europe. 

4.  The Mexican government announced on Tuesday that the country is likely headed into recession, with the economy estimated to contract by as much as 1.8 percent in 2009.  The Mexican economy is heavily dependent on exports to the Untied States, with exports to the U.S. accounting for 80 percent of all Mexican exports and representing about 25 percent of all economic activity in the country.  Already, Mexico’s central bank has cut interest rates in an attempt to stimulate the domestic economy.  Meanwhile, an ongoing conflict between powerful drug cartels and the central government has led some analysts to forecast that Mexico could achieve “failed state” status if it is unable to assert control over the cartels.

5.  Although the fragile ceasefire in Gaza has officially held, a number of fractures are beginning to appear.  On Thursday, Hamas launched rockets into Israel in response to an Israeli airstrike against a suspected arms factory in Gaza on Wednesday.  President Barack Obama named George Mitchell his Middle East envoy, and Mitchell appears to have his work cut out for him.  Arab states are demanding an investigation into alleged war crimes committed by Israel during the conflict in which more than 1,300 Palestinians were killed and more than 5,000 were injured. 

And in a bonus story this week:

6.  A moderate Islamist leader, Sheikh Sharif Ahmed, was declared the winner of Saturday’s presidential elections in Somalia.  Ahmed was the head of the country’s sharia court system that brought stability to southern Somalia in 2006.   But the withdrawal of Ethiopian troops earlier this year has led to even more instability in Somalia, and the political process, now to be led by Ahmed, has been dislocated from the country, now based in neighboring Djibouti.  Somalia has become a haven for piracy in recent months, and the World Food Program was forced to halt shipments to the country due to insecurity.