There are 15 million Roma living in the world, between 10-12 million of whom live in Europe. They are probably the most discriminated against people in Europe, to the point of being granted asylum in countries such as Canada. Antonio Capello at the Demography Blog has an interesting graph of the distribution of Roma in Europe and the sad day-to-day reality of Roma life:
Roma have always been victims of intolerance, prejudice and discrimination, their presence in Europe is characterised by centuries of persecution,extermination and discriminatory policies. Nowadays, the majority of modern societies continue to show anti-gypsy feelings and to perceive, disseminate or tolerate negative images linked to ROMA who are still considered “different” and not “fully citizen” of their respective countries. As reaction, Roma have developed, as self defense, isolation and diffidence against society and institutions.
There are many successful Roma. Portuguese football player, Ricardo Quaresma is one of them. Unsurprisingly and rather sadly, his fans completely dissociate him from the Roma community and leave their view of the community unchanged.
In the economic study of discrimination, two topics remain largely unexplored. (1) To what extent do the economic well-being of discriminated groups improve when they move to less discriminatory countries (eg. the Roma moving from Czech Rep to Canada)? (2) What effects does discrimination have on effort, say in acquiring education or integrating within society. On one hand, one could expect that a discriminated group can react by sending their kids to school in a way that they end up better educated than the average, hence compensating for discrimination. On the other, they can have a notion of fairness, and react or resign to unfairness by excluding themselves from society. Quite often, this is what actually occurs.
I have long considered to stop blogging given time constraints and the sheer supply of good econ blogs. But then again time spent blogging is not completely lost. Reading other people’s blogs is good, but there is more one learns about a topic when one writes about it. So basically this blog is not quite dead yet!
In a recent paper entitled “Political Careers or Career Politicians?,” Andrea Mattozzi and Antionio Merlo ask the following questions: “Who wants to be a politician and why? How do monetary incentives affect the quality of politicians and their career paths?” Naive economic thinking would suggest that if society offers better financial rewards to politicians, it will attract the best talents, much like one can buy better-quality tomatoes, or a better car, if only one is prepared to pay more for them. But Mattozzi and Merlo suggest that the market for politicians differs from the market for tomatoes. How? Read the rest of this entry »
The innovative “bonus-malus” scheme introduced in France in Jan. 2008, where purchases of new, high carbon-emitting cars are taxed (between €200 – €2600) while purchases of new, low carbon-emitting cars are subsidised (between €200 – €5000), is having a great success. Sales of small cars (those emitting less than 130 CO2 per km) have gone up by 45% and CO2 emission by new cars have been reduced by 9%, more than the reduction planned for 2012-2020! The cost of the success: what was planned as a revenue-neutral scheme is costing €140 million to the tax payer in 2008, as the number of subsidised cars sold far outpaces the number of taxed ones. Does the environment have a price? No, says the French Environment Minister, Mr Borloo, who wants to extend green taxes and subsidies to a host of household items (television sets, computers, tyres, light bulbs, etc). Finance Minister, Mr Woerth, on the other hand, seems to be more concerned about the fiscal costs of the operation: France wants to balance its books by 2012. The question, of course, is whether the 9% reduction in CO2 emission is really worth an annual €140 million – i.e. €2.50 per capita. Also, can a similar reduction be achieved at a lower cost, say if the measures were less generous? It’s all about price elasticities of demand.
This “only child” generation is now reaching adulthood. A child born in 1980 is now 28 years old, and China is beginning to realise the consequences of this demographic imbalance. Among 16-25 year olds today, there are nearly 110 boys for every 100 girls…
To what extent is the rise in the number of young men responsible for the increase in crime? A recent study by Edlund, Li, Yi, and Zhang…concludes that the one-child policy explains one-seventh of the increase in crime.
Why?
…the difficulty that young men have getting married is probably one source of this phenomenon. A long-term study of Vietnam veterans in 1998, cited in a recent New Republic article, provides some clue as to why. The subjects’ testosterone levels, which are linked to aggression and violence, dropped when they married and increased when they divorced. Men who remain single maintain high levels of testosterone, which may make them particularly aggressive.
In a recent survey, the IMF paints a rosy picture of the economic prospects of Mauritius: the country is on its way to a second growth miracle. Despite the declining terms of trade (due to the erosion of trade preferences in textile and sugar), GDP growth was above 5% in the last 3 years and this trend is expected to continue into the foreseeable future. The country seems indeed to be doing the right thing: it has simplified business regulation, chosen a flat (and low) tax regime, and considerably strengthened its monetary policy framework. It is also addressing its level of public debt and, perhaps more importantly, it is aggressively seeking to diversify its economy, with emphasis on the financial sector and on tourism. There is, however, room for improvement, according to the IMF. The government ought to disengage itself from loss-making parastatals, labour market reforms and training ought to be accelerated, and social spending ought to be more targeted towards the needy. As ever, the IMF is silent on one important count: corruption. Read the rest of this entry »
I just discovered the second-best to Economics: learning a new language! As I learn Portuguese, I benefit from centuries of human endeavour in the Lusophone world. And it helps me better appreciate the art of translating. Which are the most difficult words to translate in the world? According to a panel of 1000 linguists, it is “ilunga” from the Tshiluba Language (spoken in DR Congo), meaning “a person who is ready to forgive any abuse for the first time, to tolerate it a second time but never a third time.” In second position, the Yiddish word “shlimazl” which is “a chronically unlucky person!” The Portuguese word “saudade” comes as the 7th most difficult word to translate in the world. “Saudade” is like a bit like nostalgia, in sadder, and has “the hope that what is being longed for might return, even if that return is unlikely or so distant in the future to be almost of no consequence to the present.” Source of the beautiful Fado, the word “saudade” is said to have originated from the Portuguese Discoveries, from the sadness felt by the women and children left behind as their loved ones embarked on journeys in unknown seas. Finally, although not present in the linguists’ list, a great word from Mauritian creole: “accorité“, which represents situations when “people sympathise with and help each other although they may be different or they may disagree on things.” There is no better word to capture the essence of being Mauritian.
Randy Pausch, Professor of Computer Science at Carnegie Mellon University, died yesterday of pancreatic cancer at the age of 47. He inspired millions of people with his Last Lecture, “Achieving Your Childhood Dreams”.
How did the per capita GDP of the landlocked, resource-rich, sub-Saharan African country of Botswana grow by an average annual 7.2% between 1966-2006 (which is even higher than China’s 6.9%)? And why did other, apparently-similar countries in sub-Saharan Africa (eg. Congo) fail? According to Mr Caesar Lekoa, the Ambassador of Botswana to the US in a CATO Institute podcast, (pointer from Bayesian Heresy) the societal values of Botswana have been the foundations for the success of a country which, after Independence, had only 12 kms of paved roads and 22 university graduates. These values are (1) tolerance towards dissenting opinions (2) pragmatism in decision-making and (3) an innate sense of accountability by tribal leaders. The latter is in sharp contrast with Botswana’s neighbouring countries: the president of Botswana does not live in a mansion and does not fly in helicopters and he has even been seen doing his own shopping! These values, according to Mr Lekoa, are the reasons why Botswana chose a pluralistic democracy, chose to steer away from socialism and its leaders chose not to plunder the country’s resources in diamond. And these values predate the British colonization: “western institutions were new only in name, but not in practice.” Acemoglu, Johnson and Robinson in a 2002 paper on Botswana, agree: “despite adverse initial conditions, including minimal investment during the colonial period and high inequality, Botswana achieved rapid development … Why? First, Botswana possessed relatively inclusive pre-colonial institutions, placing constraints on political elites. Second, the effect of British colonialism on Botswana was minimal, and did not destroy these institutions.” But they also add. “Following independence, maintaining and strengthening institutions of private property were in the economic interests of the elite … [Also] Botswana is very rich in diamonds, which created enough rents that no group wanted to challenge the status quo at the expense of rocking the boat. Finally, this situation was reinforced by a number of critical decisions made by the post-independence leaders.” It seems that when the odds are stacked against oneself, a lot of conditions are need to be able to steer away from a poverty-trap: good initial institutions which go back well in time, a sufficient amount of resources and good leadership. Of course, if Economics could be done in a laboratory, we could alter each of these conditions to see which ones really matter. Perhaps Botswana would have grown even if it were not diamond-rich, or even if it didn’t have a democracy (like Singapore did). But this, obviously, we will never really know.
The French Ambassador to Madagascar, Mr Gildas Le Lidec, announced yesterday that he was being recalled home, only five months after being appointed. Was he bad in his job? He was flawless, according to French officials. But, in 2001, while he was in post in Kinsasha (Congo), Laurent-Désiré Kabila was assassinated, and, in 2002, he was ambassador in Abidjan (Ivory Coast) during the attempted coup on Laurent Gbagbo. His “evil eye” costs him the job; his attempts to meet the Malagasy President fell on deaf ears, who, worried for his life, demanded his recall. This story captures an important difference that exists between nations with GDP per head of $600 and those with $30,000: the generalised ‘backwardness’ in the former (even among their so-called ‘elites’) that prevents growth-enhancing behaviours and policies. Is the situation hopeless? For many economists (these poor chaps who have been unable to foretell the subprime, food, oil, etc crises!), the answer is no. Economic forces are stronger than any other, they would say. For some, a poor country like Madagascar should simply open its economy to trade, provide guarantees to foreign investors that the rule of law will be respected, balance its budget and avoid printing money to service its debt and good things will come. For others, a subtle mix of industrial policy, protectionism and undervalued real exchange rates as well as good institutions are required. Nevertheless, both groups would agree that economic development gradually dilutes backwardness, triggering a virtuous cycle. It is happening, if only imperceptibly. And slowly, the people of Madagascar will worry more about working to buy a fridge or a motorbike than about killing the aye-ayes due to their malefic powers. On the slow but inexorable road to wealth, they will be more demanding towards their policy-makers, will have less children (and spend more time and resources educating them) and will want laws that better protect property rights, prevent corruption and discrimination, all of which are essential to development. The question is how long will all this take?
It started in 1834 when Great Britain called for contract labourers from India to work in the sugarcane fields in Mauritius, as slavery would be finally abolished in 1835. Until 1920, more than 500,000 of such workers, men and women will reach the shores of Mauritius and the overwhelming majority will stay on, even after the expiry of their contracts. Many of these workers spoke a language called Bhojpuri and came from specific regions of Bihar which happened to be producing India’s most successful export at the time, opium. In his recent novel entitled “Sea of Poppies“, Amitav Ghosh beautifully captures this part of History. The story is set in a ship called the Ibis, on its way to Mauritius, carrying sailors (the lascars), convicts and indentured labourers. As the story unfolds, the heroism of some of these people, farmers from the deep interior of India and culturally “afraid” of water, as well as the hardships that led them to leave India become clear. It is a voyage into the unknown by people of different religions and castes, each socially conditioned to believe that there is no way of organising a marriage, cooking spices or peeling a fruit other than their own! But they soon realise that their lives will never be the same again, as the journey dilutes all the boundaries that define each one of them. As one migrant puts it: “On a boat of pilgrims, no one can lose caste and everyone is the same. From now on and forever afterwards, we will all be ship-siblings – jahaz-bhais and jahaz bahens – to each other. There’ll be no differences between us.” But he was wrong. As everyone who knows Mauritius would agree, and as Amitav Ghosh himself puts it in an interview, caste and religion still matter economically and politically. An absolute must read!
It is puzzling how the very people who care about the environment are now lamenting over high oil prices. Surely, high oil prices have at least this virtue: at long last, clean energy sources are becoming economically viable. A fascinating read from McKinsey’s June Quarterly puts forward the following claim: “Within three to seven years, unsubsidized solar power could cost no more than electricity generated by fossil fuels. By 2020, global installed solar capacity could be 20 to 40 times its level today.” Economic forces, it seems, will do more good to the environment than all the good intentions of all the good Samaritans. Here are excerpts from the (gated) article: Read the rest of this entry »
Ever wondered why bananas are so cheap in Europe and North America, even though they are grown thousands of kilometres away. And why is there only a single variety on sale, while there are more than a thousand of them? This fascinating article in the NYT by Dan Koeppel, author of “Banana: The Fate of the Fruit That Changed the World”: Read the rest of this entry »
What is the secret to economic development? According to the recently released Growth Report from a group of economists lead by Michael Spence, economies develop with the “right mix of ingredients“. William Easterly is predictably skeptical about any lesson that can be learnt from the past and drums up his usual claim that nothing is predictable. Indeed, who could have predicted that “South Korean entrepreneurs would create a carmaker (Hyundai) with greater market value than General Motors or Ford or that a schoolteacher named Dong Ying Hong, formerly earning $9 a month in Datang, China, would become a millionaire making socks“? Some lessons can be learnt from past successes and while some things are not predictable at an individual level, others are at a macro level. For instance, one can reasonably predict that, with its current policies, North Korea will never produce a Dong Ying Hong. The Growth Report does offer fascinating insights into the successes of 13 countries which have grown by more than 7% in the last 25 years. With the exceptions of Botswana and Oman, these high-growth economies are not particularly well-endowed in natural resources – they grew by acquiring ideas and technologies and know-how from the rest of the world. And the report identifies some countries which face more challenges than others in sustaining growth, among those are resource-rich countries. Thorvaldur Gylfason explains how Norway has avoided the resource curse: Read the rest of this entry »
Trade between Africa and China grew from $10.6 billion to $73.3 billion between 2000 and 2007, making China Africa’s third largest trading partner behind the EU and the US, while the Chinese FDI stock in Africa has grown from $49 million in 1990 to $2.6 billion in 2006. This had prompted some to claim that China has become the dominant influence in Africa; some have gone further to call it the “second scramble for Africa.” In a recent NBER Working Paper, Canadian economists, Besada, Wang and Whalley have sought to put these figures into perspective: China still accounts for only 1.4% of total FDI inflows to Africa; and only 8.6% of African exports and 9.6% of African imports. But these figures are rising fast. They also advance some important factors behind this growth, not limiting themselves to the argument that it is all about securing oil and mineral resources. And, according to these authors, what makes the Chinese adventure in Africa unique is the fact that it is mostly commercial (the Chinese precept of not mixing business with politics), leading to “large and largely untied development finance for Africa (in contrast to the present conditional OECD flows) which impacts directly and positively on living standards.” Here are highlights of the paper: Read the rest of this entry »
