Economics

UK Budget

The Art of the Comprehensible

By Christian Nicholson

Government economic policy is political. This is obvious, but not always fully understood by economists who prefer to keep things like public opinion out of their abstracted modelling. 

Keystone

What Future for Keystone XL?

By Roland Bensted

The decision to postpone the construction of the Keystone XL pipeline demonstrates that North America has not yet defined a workable compromise between competing demands to increase energy security, and reduce the negative environmental impacts of energy. The US$7 billion proposal by TransCanada to build a 1,700 mile pipeline from Alberta, Canada, to refineries in Texas has been delayed in the face of strong environmental protests and local opposition within Nebraska along the pipeline’s would-be route. The project, which has been strongly supported by the Canadian government, has now been pushed back until after the next US Presidential election.

FCO

Why Faith, Belief and Conviction Still Matter in Politics

By Pablo de Orellana

Against the assertion that we live in financial times and that all policy, national and international, must yield to the commonsensical gods of finance, we must not forget that a lot is still dictated and informed by religious and political belief. To say that we are all animated by the same absolute truths and resulting interests is to forgo humanity, freedom and choice in favour of a single subjectivity. Navigating the new world order is about finance and trade, Foreign Office minister Jeremy Browne asserted at a recent Chatham House conference on foreign policy. Because we live in financial times, he reiterated for close to 90 minutes, Britain's international relations must focus on economic diplomacy. He went as far as arguing that a foreign policy based on the promotion of free trade is not a “zero sum game”. One is to understand that for the British government free trade will  bring about greater freedom and promote “universal values” as a consequence of its resulting social dynamics.

Korea Strategy

China’s Uncertain Development

By Andrew Gawthorpe

The credit crunch and political paralysis in the western world has enhanced speculation about the future of China, a country which superficially seems to be doing so better than Europe or America. The headline economic growth rate in China in the three months to June 2011 was 9,5 per cent, against a figure of 0,2 per cent for Britain and 1 per cent in the US. It is little wonder that western politicians eyeball China’s trajectory enviously. Meanwhile, China’s growing economic weight has not only made it indispensible to solving global economic problems, but also seems to be translating into growing political and security influence as well. If one was needed, a reminder came recently with the launch of the country’s first aircraft carrier.

Poor Economics

Poor Economics: The Challenges of Defining Development

By Simon Halliday

We all agree that development is a good thing, but how do we know if or when a given policy works? Poor Economics enters the debate by detailing how randomised controlled trials (RCTs) help us to evaluate microeconomic development policy, while simultaneously underselling the benefits of alternative methods. Nevertheless, the book is insightful and provides a more nuanced picture of the issues of poverty and development than is typical of the popular literature on aid and development.

Deficit

The Deficit in Current Economic Thinking

By Roland Bensted and Christian Nicholson

The recent financial crisis has stimulated a justifiable interest in the future of developed economies. Since the 2008 Lehman Brothers collapse the economics discipline has been forced to confront its failings. As Dominic Lawson has noted, it has partially undergone a much needed shift towards behavioural economics rather than the cold “rational” mathematical economics that failed so spectacularly. However, as this article describes, there remains enormous scope for a more fundamental rethinking of the political economy of the developed world.

China_LatAm

The Dragon’s Appetite for Latin America

By Antonio Sampaio

For decades a generation of Latin American thinkers criticized the unequal relationships between the region and developed countries - especially the US. Their preferred weapon was Dependency Theory, which focuses on the pattern of poor countries providing cheap labour and natural resources to rich ones, and receiving in exchange manufactured goods in a way that perpetuates the backwardness of Third World economies. In the last decade, the rise of another developing economy, China, has made the old theory resurface.