Economic structure – Page 2

A new Washington Consensus on the role of the state?

April 15, 2021 Ilias ALAMI5 Comments

In a recent , Martin Sandbu of the Financial Times argues that 鈥渢he conversion by the IMF and World Bank to support the activist state would put Saul of Tarsus to shame.鈥� According to him, we may be witnessing the rise of a new Washington Consensus, which embraces deficit spending (by rich countries), 鈥渢emporary solidarity surtaxes鈥� on the rich and businesses, green public investment, and other forms of government intervention. This is not only to address the short-term effects of the pandemic, but also to stimulate demand across the world economy. Sandbu finds evidence of this new consensus in the benign view that the IMF has taken on Biden鈥檚鈥渞escue package鈥�, and claims that 鈥渢he new Washington consensus could prove as politically powerful as the old one.鈥� In another in October 2020,

Sandbu characterised this new consensus as follows:

鈥淎fter 1945, the guiding assumption was, first, that the state knew best, then that the private sector was best. We are about to transcend both, in favour of an economic worldview based on finding ways in which government intervention can guide the private sector to perform better. In that sense, economic planning and the activist state are back.鈥�

It is indeed striking that the IMF, the World Bank, the OECD, the G20, and other multilaterals, have adapted their discourse on the role and place of the state in development. This predates the COVID-19 pandemic. In an recently published in Antipode, we document the emergence of this new vision of the state in development and outline its key features. Since the early 2010s, these institutions have produced a remarkable wealth of material explicitly concerned with old and new forms of state ownership and intervention. Witness, for instance, this November 2020 EBRD Transition titled The State Strikes Back, or this dedicated to state-owned enterprises in the IMF 2020 Fiscal Monitor. Our analysis of such policy documents and others suggests that we are witnessing a gradual yet fundamental reorientation of official agendas and discourses about the state. This emerging vision embraces a fuller role of the state in development (than the post-Washington Consensus), including as promoter, supervisor, and owner of capital. Our analysis expounds the material context in which this vision is emerging. Two interrelated transformations are particularly important.

Enduring Relevance: Samir Amin鈥檚 radical political economy

April 11, 2021April 9, 2021 Ingrid Harvold Kvangraven1 Comment

By Ingrid Harvold Kvangraven, , and

In moments of great uncertainty there is refuge to be found in the work of intellectual titans like Samir Amin. After the sad news of his passing in August 2018 in Paris, aged 86, we began thinking about how best to explore the enduring relevance of his analysis and concepts to make sense of contemporary crises.

The pertinence and analytical heft of Amin鈥檚 work is particularly important in the contemporary period marked by the interconnected crises related to COVID-19, Black Lives Matter, the climate emergency, and looming debt crises across the periphery. In the years ahead, confronting these multiple and intertwined crises will require the kind of commitment to combining research with political engagement that Amin demonstrated.

Amin鈥檚 ability to weave together thorough analysis of the polarising effects of capitalism with concrete political projects for an international radical left makes his work particularly relevant in our quest to understand capitalism, its particularities across the world, and oppositions to it. There is a younger generation of scholars, of which we are a part, that is particularly hungry for Amin鈥檚 perspectives, one that came of age in a time where the universities have been thoroughly marketised and moulded by neoliberal processes, and where intellectual production and debates are not necessarily embedded within social struggles.

The Demise of Palestinian Productive Sectors: Internal Trade as a Microcosm of the Impact of Occupation

February 21, 2021 ishikakiLeave a comment

The Israeli occupation has consistently inflicted disastrous economic costs on the Palestinians, costs that economists have examined for decades. One dimension that has been missing in these examinations, however, relates to the distortions in the structure of the Palestinian economy, and the detrimental impacts of these distortions. The term economic structure refers to the contribution of different economic sectors, including agriculture, manufacturing, construction, and trade, to the key macroeconomic variables of output (GDP) and employment.聽

Whereas a comprehensive study of these structural distortions is beyond the scope of this blog post, we zoom in on one particular economic sector that has been playing an increasingly dominant role in the Palestinian economy: internal trade.聽Briefly, internal trade refers to the retail and wholesale buying and selling of goods, including trade with Israel. The increased relevance of the contribution of internal trade to total economic activity in Palestine is part of an ongoing聽shift away from productive sectors, such as agriculture and manufacturing, towards services, trade, and construction.

This post argues that the dominance of internal trade at the expense of productive sectors is neither a result of a conscious policy effort by the Palestinian Authority (PA) nor an outcome of 鈥渓aissez faire鈥� market governance. Rather, it is a byproduct of Israeli occupation policies, and a clear consequence of the Palestinian economy鈥檚 dependence on the Israeli economy since 1967. The post argues that internal trade is a microcosm of the Palestinian economy as a whole, highlighting the futility of international and donor support for development under occupation. Rather, what is needed involves empowering independent, transparent, accountable, and collective Palestinian policy-making, a quality of leadership and governance that the Palestinian leadership of the last 25 years cannot lead or carry out.聽

Latin America: still caught in the capital flows trap

February 8, 2021January 21, 2021 robertolampaLeave a comment

In a recent , I discussed the poor state of Latin American economies drawing on some rather obscure works by Ra煤l Prebisch, explicitly addressed to the disturbing role of capital flows on (primarized and open) Latin American economies. I find that the post-2008 cyclical trend of capital flows is an exacerbated version of what has been affecting Latin America since the days of Prebich .

Mainstream literature on capital flows to developing countries has shared two important commonalities since the 1990s. This literature, for example in the tradition of New Institutional Economics, tends to assume a beneficial effect of capital inflows, which leads to an improvement of peripheral institutions, whose deficiencies are ostensibly the main cause of economic turmoil and/or failure in attracting capital flows. In doing so, however, mainstream economists deliberately overlook the asymmetric characteristics of the international monetary system and the persisting hegemony of the US Dollar.

Economic Sovereignty for Developing Countries: What Role for Modern Money Theory?

December 2, 2020November 28, 2020 basiloberholzer4 Comments

With modern money theory (MMT) receiving impressive attention, the implications this theory has for developing countries have also been discussed more intensely. Emphasizing both its strengths and gaps provides a great chance to further develop macroeconomic strategies for poverty reduction and environmental sustainability.

In brief, the starts from the statement that money is issued by the government and brought into circulation via its expenditures. The government does not rely on taxes to fund expenditures when it is itself the source of money. Therefore, money can be created upon demand, is not limited, and can be used by the government to finance all expenditures it considers necessary to achieve policy goals such as full employment or a . The reason why agents in the economy accepts this money only consisting of numbers without any intrinsic value is the obligation to pay taxes. Since the state has the power to impose taxes, individuals need to get hold of money as this is the only way to meet their obligations; this is how the currency is accepted as a means of payments. The government thus has the power to run unlimited deficits because the fact that money is needed to pay taxes guarantees its acceptance even if those taxes do not cover expenditures. In fact, the government should run deficits because it creates the demand required for full employment while a balanced budget constrains it. The government cannot go bankrupt because there is no lack of currency it issues itself. The conditions identified by MMT for the system to work are the following: 1) the country must be sovereign of its own currency and 2) inflation needs to be kept under control. Once the latter starts accelerating due to increased nominal demand stemming from government expenditures, taxes can be increased in order to withdraw money from circulation. However, as long as full employment is not achieved, prices are argued to remain stable.

Covid-19 and The Myth of Convergence: The West, the Rest and the urgent need for fiscal space in the Remainder

November 5, 2020November 5, 2020 pbehuria5 Comments

Imagining recovery, while a pandemic rumbles on, is an ominous task. But governments around the world have been forced to contend with this challenge. Several African, Asian and Latin American economies were in precarious financial positions before the pandemic hit. Fluctuations in global commodity prices in recent years and mounting trade deficits had already forced several African countries to request the International Monetary Fund (IMF) for a range of support mechanisms including credit facilities. Debt was already reaching alarming levels. The pandemic made economic dependencies more salient, with Zambia plunging towards becoming Africa鈥檚 .

The recent thrust of research championing possible convergence (often based on questionable and selective use of data) between 鈥榙eveloped鈥� and 鈥榙eveloping鈥� countries ignores the vast range of economic trajectories of former colonies. In slapdash cross-country economic studies, a strategic use of averages and unreliable categorisation is often used to draw generalisations about large-scale change. Sweeping claims made about a rising 鈥榙eveloping鈥� world often fail to isolate China鈥檚 rise. There is rarely any acknowledgment that most countries鈥� economies remain undiversified and deeply dependent on foreign actors. The data used to make the case for convergence often relies on GDP and human development indicators, rarely mentioning let alone measuring the of economies. Structural transformation remains one of the essential facets of economies that have . Whether countries can retain fiscal space after this crisis will inevitably depend on the nature of structural transformation and how that has shaped national growth and dependency within the global economy.

The Social (Relations) Dilemma

October 19, 2020October 17, 2020 Aabid Firdausi1 Comment

The Social Dilemma that is currently streaming on Netflix has garnered much attention by raising a single question 鈥� how have we come to accept as normal the fact that a few hundred tech-enthusiasts in Silicon Valley has had an unprecedented impact on billions of lives around the world? Directed by Jeff Orlowski, the Social Dilemma features tech industry insiders raising ethical concerns about business models that shape our everyday digital experience.

Though the docudrama has topped charts, the narrative on reckoning with this digital Frankenstein moment is not new. For example, Black Mirror is a popular show streaming on Netflix that speculates on how unchecked tech developments can result in a dystopian world. What makes Social Dilemma unique is perhaps because it features an array of 鈥� usually white males who got rich working for big tech, but then got disillusioned and subsequently achieved 鈥渆nlightenment鈥�.

The tech-bros point out that most platforms were started with good intentions to improve the quality of human lives. However, due to the advancements in AI, coupled with a shareholder model of revenue maximization, these platforms have become weaponized by those with nefarious interests. This has threatened liberal democracies, leading to political polarization. We are warned that a civil war is on the horizon, ironically triggered by social networks apparently aimed at bringing people together.

Developmental Agency under the Radar: Developmental States and Coalitions in Dependent Market Economies and Low-Tech Sectors

October 14, 2020September 21, 2020 David KarasLeave a comment

In a co-authored with L谩szl贸 Bruszt and published in a of Review of International Political Economy, we identify a developmental state in the least likely of times 鈥� the period of hegemonic neoliberalism in the 1990s and early 2000s 鈥� and the least likely of places, namely the post-socialist Central Eastern European (CEE) economies conventionally described as FDI-dependent (DMEs).

黑料社区