Development

The implications of rising inequality are massive. Economists need to tackle it together.

John Kenneth Galbraith noted in 1973 that establishment economics had become the “invaluable ally of those whose exercise of power depends on an acquiescent public.” If anything, economists’ embrace of that role has grown stronger since then.

For years, governments in India and much of the developing world have followed the advice of a paper arguing that labor regulations actually hurt workers. The problem? The research was wrong.

Chaired by Nobel laureates Joseph Stiglitz and Michael Spence, INET has assembled a global team of leaders and scholars calling for new thinking & new rules for the world economy

A new report examines the path to global social progress. Unfortunately, there are no easy answers

Clear rules and sound principles for debt restructuring would level the playing field between developing countries and creditors

In a complex world, we’ll experience more “black swans”, and the things that standard economic models assumed away will matter much more.

In the face of  laissez-faire capitalism at home and resurgent nationalism across the globe, INET offers an innovative look at the causes of—and solutions for—the problems that ail a fissuring world economy.

Coping with the dysfunction of advanced economies, and developing strategies for economic development.

A better set of approaches for the 21st century.

Robinson explains how natural experiments are done and why they’re useful. He also explains distribution of power and development of state play critical roles in successful economies.

Young Scholars Initiative (YSI) has released a new e-book, “Conversations on Dependency Theory”

A new book by economist Peter Temin finds that the U.S. is no longer one country, but dividing into two separate economic and political worlds

Along the entire “innovation chain” — from research and development, to production and commercialization — government and private sectors have very different roles to play.

A discussion with Kaushik Basu, Professor of Economics and the C. Marks Professor of International Studies at Cornell University and former Senior Vice President and Chief Economist of the World Bank. 

New findings show that hourly wage-rates in China are higher than in middle-income countries and are approaching the levels of Greece and Portugal

Institute Senior Economist Pia Malaney sees the election of Donald Trump as a message from the Rust Belt signaling a systemic failure in US political economy 

Any effort to replace the Affordable Care Act will be confronted by the same structural imbalances in the health care economy that the legislation’s authors faced

Milwaukee-born short-seller Jim Chanos, founder and managing partner of New York-based Kynikos Associates, teaches University of Wisconsin and Yale business students about corporate fraud. During his life and career, he has witnessed seismic shifts in economic thinking and the relationship between labor and capital. Chanos shares his thoughts on the world emerging from the election of Donald Trump and the tumultuous political events of 2016. 

Beneath the heated political rhetoric over U.S.-China economic ties lies an increasingly complex reality

By suddenly eliminating two widely used bank notes, India’s government risks undermining public confidence in the basic means of exchange

A change in macroeconomic policies will not be sufficient to set Argentina on a path of inclusive and sustained economic development. But, as last month’s currency scare showed, abandoning the approach adopted by President Mauricio Macri’s administration at the end of 2015 is a necessary step.

The World Bank and IMF say developing economies can’t afford to have strong labor laws. Actually, they can’t afford not to.

Global public goods, from health to peace to security, crisscross national and social boundaries. We need a new economic theory to understand their pivotal role in the global economy.

For the BRICS countries to not just grow their economies but also raise the standard of living of their people, inclusive growth that prioritizes poverty reduction is a must

But the five countries must still support greater investment in other emerging and developing economies

The BRICS countries—Brazil, Russia, India, China, and South Africa—play a crucial and growing role in the world economy. Sanjay Reddy kicks off our series exploring shifting social and economic dynamics within these countries, and what they mean for the global economy.    

The African Development Bank has laid out a plan for economic prosperity in the continent. But to get there, African countries must first confront jobless growth and underfunded infrastructure projects.

There’s no turning back from humanity’s move to high-density living, says Ed Glaeser. The task of the century will be making cities more liveable.

The Implications of Xi’s Belt and Road Initiative for China and the World Economy

Joseph Stiglitz, Michael Spence and a global team of leading thinkers are calling for new thinking & new rules for the world economy

“Blindly” Engaging in Global Supply Chains Can Erode Developing Nations’ Economic Power

A discussion featuring Kenneth Smith, Head of the Trade and NAFTA Office of the Ministry of the Economy of Mexico, and Jay Pelosky, Principal of Pelosky Global Strategies.

Brazil’s current economic scenario does not resemble the emerging economy that until recently fueled the optimism of analysts and investors.

Notes from the Institute’s Director of Research on some significant papers and contributions produced in 2016 under the INET rubric 

Campaign promises aside, the policies favored by President-elect Donal Trump are likely to bring more pain than gain to  working-class Americans 

Beijing’s leaders face a critical dilemma over a credit boom that imperils China’s prospects for a smooth transition to a sustainable economic path

Flows of goods and services, people and capital have overwhelmed the ability of political processes to accommodate them

Nobel laureate argues that the party’s adherence to neoliberal orthodoxy has hurt its prospects

Mass protests challenging the government to focus on job-creation rather than on market liberalization and trade deals may carry a cautionary message to Western policy makers, too.

We have developed over a number of years and now make publicly available a new and unprecedented data resource for understanding levels of living, poverty, inequality and inclusivity of growth and development around the world.

Exploring inequality, gender, and the North-South divide.

In directing panelists to distinguish between what governments “can” and “will” do, this session’s title frames economic policymaking as a balancing act. Principled efforts to define and pursue the public interest are contested and repeatedly knocked off course by conflictingpersonal, bureaucratic, and political concerns that impinge on government decisionmakers.

Financial crises are staggeringly costly. Only major wars rival them in the burdens they place on public finances.

The crisis of the export led model in the EMU countries and its monetary and financial consequences on European integration.

The presentation explains that Indian Economy is basically a market-oriented economy with constant rebalancing between state andmarket.

At a time when China is the favored investment destination in the global market, it seems unlikely that it would ever face capital flight.

This is a small paper on a big subject: the polarization of American politics since the mid-1970s. In its early stages this process bore more than a passing resemblance to the opening scenes of a Grade B disaster movie: With almost everyone’s attention focused elsewhere, a series of tiny, seemingly insignificant departures from long standing routines took place.

Many companies around the world have discovered they can benefit financially from integrating environmental, social and governance (ESG) targets in their daily operations and strategy.

The theme of this session is very timely and controversial, on the ability of sovereign governments to supervise Large Complex Financial Institutions (LCFIs), now officially described as G-SIFIs, global systemically important financial institutions.

After the inception and, hopefully, the passing of the most dangerous phase of the international financial crisis, economists have returned to the long favoured subject of global imbalances.

Leading thinkers from outside the developed countries look to the future, spotlighting the pitfalls and opportunities thatawait us.

The ongoing eurozone crisis has prompted many to argue that monetary union withoutfiscal union was bound to fail.

A combination of leeway within the government and constitutional immunity during incumbency enables office holders to abuse their budget at will, which in turn creates a crisis of growth in Africa, relative to other parts of the world.

Three major crises are confronting the world. The first is the increasing and uneven burden of humans on the biosphere, and the observation that we have already surpassed the ‘safe operating space’ for humanity with respect to three planetary boundaries: climate change, the nitrogen cycle and biodiversity loss.

How can we distribute growth globally when the developed world needs growth to emerge from debt overhangs and inequality between nations is still quite formidable?

These are truly testing times. The world economic order – capitalism – is being called into question following the Lehman crisis. The world’s best form of societal organization – democracy – is being challenged by the economic success of autocratic countries such as China and Singapore.

A country that produces goods of high quality at a competitive price is likely to be rewarded for its ingenuity with a trade surplus. Small countries often achieve great development success through export-led growth. At the same time, the entire economic system must be balanced.

Only a few years ago, comparisons of American politics to opéra bouffe were not outrageously farfetched at least if you were not poor or sick.

Since the dawn of this millennium, and long before the current financial turmoil and the subsequent bitter pill of austerity therapy hit the Untied States and the European Union, the Chinese Communist Government has publicly recognized the monumental challenge of polarity.

There are a number of possible purposes in assessing the level of economic development of a country or part of a country. The assessment may provide an incentive for better development, particularly if it can be compared meaningfully with assessments for other countries.

“Taking advantage of the opportunity offered by the structural adjustments of the global economy…”The decisions on the four modernisations taken at the Third Plenum represented a radical change in Chinese domesticdevelopment strategy.

Political meritocracy is the idea that a political system is designed with the aim of selecting political leaders with above average ability to make morally informed political judgments. That is, political meritocracy has two key components: (1) the political leaders have above average ability and virtue and (2) the selection mechanism is designed to choose such leaders.

Mercantilism, Accumulation of Foreign Exchange Reserves, and RMB Internationalization

Internationalization of the renminbi is a stated goal of the Chinese government, its brief flirtation with Special Drawing Rights and an Asian Currency Unit notwithstanding. Chinese officials understand that a dollar-centric international monetary and financial system is a mixedblessing.

Healthy innovation economies are the main driver of prosperity in the 21st century. But the three players that have traditionally sponsored basic research and invention in those economies are no longer willing or able to perform that role.

The developed economies of Europe, North America, and Japan are facing tremendous challenges related to indebtedness and stagnation. How will the developing economies of Asia respond to this challenge as they reorient their growth strategies to meet the rising aspirations oftheir people?

The Foundations of Economic Prosperity: The Lessons of Innovation Process and History

The Arab Spring has been a fundamental event in the Arab world and yet among Middle East scholars, there is great intellectual and analytical debate about the degree of political change or continuity that the Arab Spring had produced. As reverberations of the global economic crisis have continued and the international rules of the game have fundamentally remained unchanged, the demand on post-Arab Spring governments to change policy course is high.

The chief obstacle to transformative change in the contemporary Middle East is the region-wide configuration of social power which was consolidated in the Arab provinces of the Ottoman Empire and which survived the transition from empire to post-Ottoman independent states largely intact.

While successive waves of democratization over the last half century changed the political landscape in various regions of the world, the authoritarian regimes have maintained their hold on power in the Arab region.

Five years after the end of the Great Recession, corporate profits are high and the stock market is booming. Yet most Americans are not sharing in the apparent prosperity.

This article studies the reasons for the under-investment in research vs. development in the decentralized equilibrium and argues that this bias provides a micro-foundation for the government direct involvement in conducting applied research rather than just financing it.

The logic of deep global capitalist crises needs to be incorporated centrally into an understanding of the changes in the within-country inequality levels. I present a theoretical framework that incorporates two levels of political economic processes. First,global capitalist crises lead to the creation of an institutional structure or a regime in the capitalist centers that influences inequality in these core countries and in the periphery. Second the class configuration in the non-core countries - a set of institutional arrangements that can be termed local political economy - also plays a key role in determining inequality outcomes.

The paper presents a newly compiled and improved database of national household surveys between 1988 and 2008. In 2008, the global Gini index is around 70.5 percent having declined by approximately 2 Gini points over this twenty year period. When it is adjusted for the likely under-reporting of top incomes in surveys by using the gap between national accounts consumption and survey means in combination with a Pareto-type imputation of the upper tail, the estimate is a much higher global Gini of almost 76 percent.

Economists’ assumptions, even about seemingly “small” matters, make an enormous difference to global poverty estimates but their impact often goes unnoticed, and the choices made have been badly justified. We must stop pretending that the World Bank’s “$1 per day” estimates are at all reliable.

The World Bank’s global poverty estimates suffer from deep-seated problems arising from a single source, the lack of a standard for identifying who is poor and who is not that is consistent and meaningful.

The effect of ethnic violence on electoral results provides useful insights into voter behaviour and the incentives for political parties in democratic societies.

This research project will study the long-run interactions between transport infrastructure and economic development using spatially-disaggregated data for England and Wales over the period c.1817—2011. It will look to inform policy toward large investments in physical infrastructures.

This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness.

Pushing this strand of research brings a certain feeling of trepidation. It comes from recognizing that by openly elaborating on how to catch or deter a criminal, you thereby confer an undue advantage on the criminal through forewarning.

“Oh, the Chinese hate the Japanese and the Japanese hate the Chinese—to hate all but the right folks is an old established rule. The Koreans hate the Japanese and the Vietnamese hate the Chinese, and the North Koreans hate them all. Oh, the People hate the Communists and the Communists hate the People. The Nationalists hate the Communists and the Communists hate themselves. The Confucians hate the Buddhists and the Muslims hate them all. All of my folks hate all of your folks. But during National Brotherhood Week, be nice to people who are inferior to you. It’s only for a week, so have no fear—be grateful that it doesn’t last all year.”

Over the past decades African economies have exhibited two stunning paradoxes: growth acceleration coexisting with stubbornly high poverty rates; increasing capital flight along with widening development financing gaps. There has been no attempt to link the two in the literature.