Thursday, February 15, 2007

Wall Street Journal Economics & Development Roundup

Lots of good stuff in the Wall Street Journal today on development and economics and also a bit on Africa (a subscription is highly recommended). Let's start with what's not behind their subscription services:

John Fund reviews "Radicals for Capitalism" by Brian Doherty (the publishers should have spent a bit more money on the cover page). Here's a quote: "But very few writers have devoted much attention to the role of libertarians, a more appealing and optimistic group of thinkers, political activists and ordinary citizens who believe that respect for the individual and the spontaneous order of market forces are the key to progress and social well-being."

Next comes an OECD report out on European Joblessness and the associated editorial:

Look at the welfare-besotted Nordics, in particular Denmark, which has recently found tough love. Its "flexisecurity" system combines generous jobless benefits, strong incentives to get new work fast and lenient hiring and firing rules. This encourages Danish employers to create jobs and pushes beneficiaries back into the work pool. The result: Unemployment fell to 4.8% in 2005 from 8% in 1994.

New governments in Italy and Germany and a soon-to-be new president in France have a chance to catch up with other developed economies on getting their citizens into jobs. The recipe isn't complicated: Reduce taxes to reduce wage costs, tighten rules on government benefits, loosen up employment protection laws.
Then there's Nobel Prize winner for Economics winner Edward C. Prescott arguing the merits of globalization, getting out of the way of successful industries while allowing old uncompetitive industries to die:
Of all the thankless jobs that economists set for themselves when it comes to educating people about economics, the notion that society is better off if some industries are allowed to wither, their workers lose their jobs, and investors lose their capital -- all in the name of the greater glory of globalization -- surely ranks near the top.
Finally, while I can't agree with the authors who say Doha is Africa's last best chance, they do make some good points that the collapse of the Doha round of trade talks would make African nations poorest for it. Here's the argument:
It would lead the United States and the European Union to negotiate more bilateral free-trade agreements with key countries, but not with sub-Saharan Africa and other poor countries, which offer few attractive markets for developed countries' manufactured goods and services. Africa, which has seen its share of world trade shrink in recent years, would fall even further behind.
This runs counter to those anti-trade idealists or self proclaimed advocates for the poor, however well intentioned who argue that no trade agreement is better than a flawed trade agreement.


Richard said...

FYI - You can get free access to Wall Street Journal with a netpass from:

This blogged about by Andrew Tobias and Poytner and I thought it was a great tip!

Clement Wan said...

That's excellent! Thanks.