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201. Economic Freedom and Net Business Formation

Author:
Noel D. Campbell and Tammy M. Rogers
Publication Date:
01-2007
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Economic freedom indexes, especially the Fraser Institute/Cato Institute Economic Freedom of the World (EFW) index and the Heritage Foundation/Wall Street Journal Index of Economic Freedom, are becoming increasingly important as researchers seek to explore the link between economic freedom and prosperity. The consistent finding is that nations with more economic freedom—as indicated by security of property rights, free trade, limited government, low marginal tax rates, and so forth—enjoy higher per capita incomes and general living conditions compared with countries that are less free.1 In a less aggregated study, Karabegovic et al. (2003) find that differences in economic freedom across U.S. states and Canadian provinces are significantly and positively related to differences in the level and growth of economic activity across states and provinces. Various researchers have used the Economic Freedom of North America (EFNA) index, published by the Fraser Institute (Karabegovic, McMahon, and Mitchell 2005), to address questions of income differentials between states, income growth, and entrepreneurship.2 Scholars have also used the EFNA index to study migration. Ashby (2007), not surprisingly, finds that people tend to move from less free to more free areas.
Topic:
Migration, Economy, Business, Free Trade, and Freedom
Political Geography:
Global Focus

202. Energy, Cities, and Security: Tackling Climate Change and Fossil Fuel Risk

Author:
Peter Droege
Publication Date:
09-2007
Content Type:
Journal Article
Journal:
The Journal of Diplomacy and International Relations
Institution:
School of Diplomacy and International Relations, Seton Hall University
Abstract:
The world economy is based on cities: cities are its very home. Global financial flows are structured within urban systems; city networks physically articulate national and international markets. Historically, cities have been built around markets, too. Founded on trade routes, they formed growing economies in themselves; they gave rise to and nurtured the dynasties and institutions that manage the decisions that guide national economies. Cities are settings of political command and control, and centres of culture. Here society’s leading images and messages are produced and packaged, shaping social reality and articulating aspirations. The great urban centers of yore were the main stages of their respective political settings. Democracy was developed by urban societies, and it was shaped and supported in the public spaces and institutions of major cities. Today, most population growth occurs in urbanized areas, with half of the world’s population dwelling here. But cities, their form, economies, and growth dynamics have also been very much defined by the energy systems dominating their eras. The manner of this interaction helps define the security profile of an age, a nation, or the balance of global relations. Global trade, sprawling cities, or periods of large-city formation are not new historical phenomena. The stories of hegemonic urban networks involving Babylon of the 18th century BC, Angkor of the 12th century AD, or London of the late 18th century are testimony to this fact. But the speed and sheer mass of the current urbanization wave, and the formation of super and mega-sized cities as a widespread, simultaneous, indeed, global phenomenon is unprecedented; it has only been acknowledged as a significant force during this past half-century. While rampant urbanization had not found wide recognition prior to the 1970s, it has also not been particularly well understood in the time since. The massive explosion of the world’s urban population is relatively new, gathering momentum in the first half of the 20th century and accelerating from the 1950s on. From the 1970s, a burgeoning research literature genre formed to give meaning and voice to this phenomenon.1 Since then, these urban centers have been described as world cities, global cities, megacities, or referred to broadly as the global urban system. Regardless of the label used, this conception connotes primacy of global markets, corporate control, seats of national power, homes to regional security apparatuses and, above all, the agency and relevance of technological innovation in surface, air & sea transport, defense, and the advent of advanced telecommunications.
Topic:
Security, Climate Change, Economy, Fossil Fuels, Cities, and Energy
Political Geography:
Global Focus

203. Economic Freedom and Development: New Calculations and Interpretations

Author:
Erich Weede
Publication Date:
10-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
For some time there has been a debate about the effect of economic freedom on economic growth and development (Beach and Davis 1999: 10; de Haan and Siermann 1998; de Haan and Sturm 2000; Edwards 1998; Goldsmith 1997; Gwartney, Lawson, and Block 1996: 109; Knack and Keefer 1995; Pitlik 2002; Scully 1992; Torstensson 1994; Weede and Kämpf 2002). Although there is wide agreement about the stylized fact that economically free societies are richer than other societies, there is less agreement about the impact of economic freedom on growth rates. Some writers contend that the level of economic freedom affects growth, whereas others, in particular de Haan and his associates, dispute the robustness of this claim and find only a relationship between improvements in economic freedom and growth. The most recently published research on the effects of economic freedom on growth (Gwartney and Lawson 2004; Gwartney, Holcombe, and Lawson 2006) reaffirms that there are strong and beneficial effects of the level of economic freedom and of its improvement on growth rates. Looking at the published literature as well as at the work in progress by one of my doctoral students (Liu 2007), my impression is that there are two ways to strengthen the effects of the level of economic freedom on growth: first, choose a longer rather than shorter period of growth observation; second, and more important, use an average measure of the level of economic freedom rather than a single time point measure of economic freedom that refers only to the first year of growth observation. If one compares, say, de Haan and Sturm’s (2000) study with Gwartney, Holcombe, and Lawson’s (2006), then one finds that the former study uses a somewhat shorter period of growth observation, but both of them use the level of economic freedom at the beginning of the growth period to be explained.1 Whereas de Haan and Sturm (2000) find no significant and robust effect of the level of economic freedom on growth, Gwartney, Holcombe, and Lawson (2006) arrive at the opposite conclusion: The level of economic freedom does promote growth.2
Topic:
Economy, Economic Growth, Economic Development, and Freedom
Political Geography:
Global Focus

204. The Case for Market‐​Based Regulation

Author:
Gerald P. O'Driscoll Jr.
Publication Date:
10-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In this article, we reconsider the rationale for government regulation of markets. We begin by identifying markets as governed not only by prices but also by evolved institutions, rules, and standards. We then analyze how this complex order regulates human behavior, discuss the case for adding a layer of government regulation to the market’s own regulatory system, and present a number of case studies to clarify the issues. Our focus is not on the familiar public choice criticism of government regulation—namely, that regulation is more about the pursuit of economic rents than protecting the so-called public interest. While that criticism is correct and we make reference to it where appropriate, the thrust of our argument is that market self-regulation is often superior to government regulation, which frequently is a solution in search of a problem.
Topic:
Government, Markets, Regulation, and Economy
Political Geography:
Global Focus

205. On the Influence of World Religions on International Trade

Author:
Matthias Helble
Publication Date:
05-2006
Content Type:
Journal Article
Journal:
Journal of Public and International Affairs (JPIA)
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
As the world economy is integrating, trade between countries is growing rapidly. The exchange of goods not only has an economic, but also a cultural dimension. This paper investigates the possible ways that religion infl uences international trade patterns. It studies the view of the fi ve world religions, namely Hinduism, Judaism, Buddhism, Christianity, and Islam, on economic activity, and trade in particular. Analyzing empirically trade fl ows between 151 countries, the paper fi nds an impact of religion on trade. Furthermore, the results indicate that religious openness boosts trade performance of countries. Given these results, the paper derives several policy recommendations.
Topic:
International Trade and Finance, Religion, Culture, and Economy
Political Geography:
Global Focus

206. The Unsustainability of the US Twin Deficits

Author:
Nouriel Roubini
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Global current account imbalances are increasing rather than decreasing. The U.S. current account deficit was about $665 billion in 2004 and rose to $791 billion (around 6.5 percent of GDP) in 2005, and it is likely to grow to more than $950 billion in 2006 and well above $1 trillion in 2007. Most other regions of the world—with the exception of Central Europe—are now running a current account surplus. Thus, with the exception of a few countries—Turkey, Australia, New Zealand, Iceland, Spain, Britain, and some Central European countries—most of the world is running a current account surplus and financing the U.S. current account deficits. Moreover, unlike some of these other countries running current account deficits, the United States is also running a large budget deficit that is growing— after a drop in 2005—at rates that are worrisome. Thus, the United States appears to be experiencing a twin fiscal and current account deficit whose medium- to long-term sustainability is doubtful. The stability of this global current account disequilibrium is widely debated. According to some (Dooley, Folkerts-Landau, and Garber 2004, 2005), we are in a new Bretton Woods 2 (BW2) regime where Asia and most of the emerging world is now actively pegging its currencies to the U.S. dollar and thus following a mercantilist policy of undervalued currencies that lead to export-led growth. The resulting current account surpluses lead to an accumulation of official foreign exchange reserves that imply a cheap financing of the U.S. current account deficit. According to the supporters of the BW2 view, this is a stable disequilibrium that could last for a decade or two. In fact, this BW2 regime and the growing global imbalances are unsustainable and bound to unravel in the next couple of years. The U.S. current account deficits—bound to rise above 7–8 percent of GDP in 2006–07—imply an accumulation of foreign liabilities that will lead the U.S. net foreign debt to grow from the 25 percent of GDP level of 2004 to over 50 percent by 2010. Thus, the issue is whether foreign investors—both private and public—will be willing to accumulate U.S. assets at the net rate of $800 billion to $1,000 billion a year for the foreseeable future. Those who believe in the sustainability of such trends point to the strength of the U.S. dollar in 2005 and to the low levels of U.S. long-term interest rates—the so-called bond market conundrum. They also argue that global imbalances are not due to the U.S. fiscal deficits but, rather, to other phenomena such as a global savings glut or foreigners’ desire to accumulate U.S. assets (the “capital account surplus” interpretation of the current account deficit in the Council of Economic Advisers 2006 Economic Report of the President). However, a careful analysis of the data refutes the complacency of financial markets and the revisionist interpretations of the U.S. external deficit.
Topic:
Economy, Fiscal Policy, Deficit, and Bonds
Political Geography:
Global Focus

207. Corporate Crime in a Globalized Economy: An Examination of the Corporate Legal Conundrum and Positive Prospects for Peace

Author:
Paul Richardson
Publication Date:
05-2004
Content Type:
Journal Article
Journal:
Journal of Public and International Affairs (JPIA)
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
“This is it. They are going to arrest us all and execute us. All for Shell.” Ken Saro-Wiwa, a leader of the Nigerian Movement for the Survival of the Ogoni People (MOSAP), made this statement two weeks before his arrest in May 1994. Jailed for exposing the company’s role in directing and arming the Nigerian military, Saro-Wiwa’s efforts paved the way for similar campaigns throughout the world, in places as diverse as India, China, Colombia, Chad and Sudan. As the number of such cases has increased over the past decade, so too has the public’s scrutiny. What are the legal and ethical obligations of corporations operating in a conflict zone? How effective is existing international law in ensuring that companies are held accountable for extraterritorial human rights violations? Taking into account existing efforts to address corporate accountability on a global scale, this paper concludes that neither national legislation nor voluntary corporate codes of conduct provide an adequate means to ensure the protection of human rights. Instead, an international system must be created—one with sufficient oversight and monitoring powers to ensure that corporations adopt conflict-sensitive policies that contribute to peace and security
Topic:
Crime, Globalization, International Law, Economy, Peace, and Corporations
Political Geography:
Global Focus

208. Promoting U.S. Economic Growth and Security Through Expanding World Trade: A Call for Bold American Leadership

Author:
Research and Policy Committee of the Committee for Economic Development
Publication Date:
06-2003
Content Type:
Special Report
Institution:
The Conference Board
Abstract:
This report presents a leadership vision of a strong and open global trading system, and urges the United States and its trading partners to adopt vital policy reforms, including delinking agricultural subsidies from prices and production while opening agricultural markets everywhere, and eliminating all tariffs and non-tariff barriers in both manufacturing and services.
Topic:
Security, International Trade and Finance, Leadership, Economy, and Economic Growth
Political Geography:
North America, Global Focus, and United States of America