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34681. The Cost of Multilateral Action

Author:
Shepard Forman, Maurizio Iacopetta, Charles Grayboy, and Yoram Wurmser
Publication Date:
06-2002
Content Type:
Working Paper
Institution:
Center on International Cooperation
Abstract:
This explanatory note accompanies five tables developed and prepared over the past two years by graduate assistants at the Center on International Cooperation (CIC), New York University. Together, the tables describe CIC's preliminary efforts to aggregate the costs of international public goods and services provided through intergovernmental organizations. It does not account for bilateral funding nor for expenditures from non-governmental and other private actors. While the data is partial and subject to methodological deficiencies, it does provide a framework for estimating annual expenditures associated with the provision of goods and services through intergovernmental organizations as well as an indication of their distribution across sectors and regions. Reporting our findings at this early stage of the work is intended to encourage commentary on both the methodology employed and the findings to date, as well as to stimulate further research on the costs and financing of the international public sector.
Topic:
Government, International Cooperation, and Non-Governmental Organization
Political Geography:
United States and New York

34682. Global Economic Prospects

Author:
Michael Mussa
Publication Date:
09-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The global economic recovery is continuing but at a somewhat slower pace than was anticipated six months ago. Specifically, using the country weights from the IMF's World Economic Outlook, the forecast for real GDP growth in the world economy during 2002 (i.e., on a fourth-quarter-to-fourth-quarter basis) is cut by about half a percentage point to 3 percent—a pace that is slightly below my estimate of the potential growth rate for world GDP. This downward revision reflects primarily slower growth than earlier expected during the first half of 2002 in most industrial countries and the expectation that growth will remain somewhat more sluggish than earlier expected at least through year-end. For 2003, the forecast for global economic growth is also cut by about half a percentage point—to 4 percent—reflecting both general factors suggesting slightly weaker performance in many industrial and developing countries and the particular economic risks arising from possible military action against Iraq and from potential credit events affecting key developing countries. Despite these downward revisions, however, there is little doubt that the world economy will see significant improvement this year from the 1 percent growth recorded in 2001, and it is still reasonable to expect further improvement to a growth rate modestly above global potential during 2003.
Topic:
Economics
Political Geography:
United States, Iraq, Europe, Israel, Asia, South America, Latin America, and North America

34683. The Foreign Sales Corporation: Reaching the Last Act?

Author:
Gary Hufbauer
Publication Date:
11-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Some trade disputes—like long Russian novels—never seem to end. The United States, Europe, and other trading nations have disputed the taxation of export earnings since the 1970s. To understand why the Foreign Sales Corporation (FSC) dispute is so hard to resolve, we must start with a historical tour.
Topic:
Economics and Political Economy
Political Geography:
Russia, United States, and Europe

34684. Further Financial Services Liberalization in the Doha Round?

Author:
Wendy Dobson
Publication Date:
08-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Recent evidence demonstrates strong links between developing countries' long-term growth and financial reform. Deputy Treasury Secretary Kenneth Dam has suggested that developing countries can transform their domestic financial sectors into "engines of growth."
Topic:
Economics, Emerging Markets, International Organization, and International Trade and Finance

34685. Is Brazil Next?

Author:
John Williamson
Publication Date:
08-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
This policy brief examines whether the pessimism that recently gripped the financial markets about Brazil's economic prospects is justified, and whether the big IMF program in support of Brazil announced on August 8, 2002, is likely to succeed in turning the tide. It concludes that present policies would be adequate to secure a gradual reduction in the debt/GDP ratio given return of the exchange rate to a less undervalued level and a level of interest rates that is normal by past Brazilian standards though still high by world standards, though not under the recent conditions of a severely undervalued real and astronomical interest rates. It also concludes that the strongly improving trend recently evident in Brazilian trade promises a progressive reduction in external vulnerability, though this again could be jeopardized by the maintenance of sky-high interest rates. It then argues that, despite the mixed records of the two principal opposition candidates for the presidency, neither would be likely to choose a policy of deliberately reneging on Brazil's debts. That being so, the recent market turbulence has to be interpreted as a panic in which even those convinced that Brazil's fundamentals are sound did not dare to speculate in favor of restoration of normality. Such situations are exactly those where the IMF can play a useful role in breaking a panic, and hence the new loan much improves the chances of Brazil avoiding the implosion that would be likely to follow a debt restructuring.
Topic:
Economics and International Trade and Finance
Political Geography:
Brazil and South America

34686. The Looming Japanese Crisis

Author:
Adam S. Posen
Publication Date:
05-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
After more than a decade of economic stagnation and minimal structural change, Japan stands on the brink of outright financial crisis—the only debate is whether the Japanese government can dodge its imminent economic threats for another six months at most, or ride the wave of global expansion to throw still more money at these problems with decreasing effectiveness until the public debt becomes unsustainable (which should be no later than 2005). Either way, volatility in Japanese asset markets will be extremely high for the next 36 months, with significant declines on average in asset prices and the yen.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
Japan, Israel, and East Asia

34687. Support the Ex-Im Bank: It Has Work to Do!

Author:
Gary Clyde Hufbauer and Ben Goodrich
Publication Date:
05-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The US Export-Import (Ex-Im) Bank is again at the center of controversy, as Congress debates the terms for its charter renewal. This policy brief critiques provisions of the House and Senate versions of the reauthorization bill and summarizes three justifications for Congress giving adequate support to the Ex-Im Bank. Box 1 provides a capsule description of the Ex-Im Bank's operations.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

34688. Sovereign Debt Restructuring: New Articles, New Contracts – or No Change?

Author:
Marcus Miller
Publication Date:
04-2002
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
It was at the National Economists' Club in November 2001 that Anne Krueger, first deputy managing director of the International Monetary Fund, threw down the gauntlet. “There is,” she said, “a gaping hole [in the international financial architecture] – we lack incentives to help countries with unsustainable debts resolve them promptly and in an orderly way. At present the only available mechanism requires the international community to bail out the private creditors. It is high time this hole was filled.”
Topic:
Economics, Government, and International Trade and Finance

34689. Economic Issues Raised by Treatment of Takings Under NAFTA Chapter 11

Author:
Edward M. Graham
Publication Date:
11-2002
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This working paper examines, from an economic perspective, the treatment of takings (property rights) under NAFTA Chapter 11. To be more precise, the paper examines the treatment of takings as environmental groups fear might be established as the result of investor dispute settlement under this chapter; as of the date of this writing, most of the cases that have the potential to be precedent-setting have not been finally decided, albeit one—the Metalclad case—has been decided in a way that is unsettling to environmentalists. The author attempts to determine whether requiring public compensation of private investors for diminishment of value resulting from government regulatory action has the potential of achieving anything close to an “optimal” outcome from a societal cost-benefit point of view (defined below). This determination makes use of tools of economic analysis and, in particular, Coase's theorem regarding achieving optimal outcomes where negative externalities are present. The overall conclusion is that, although Coase's theorem can be invoked to argue that such an outcome can be achieved either via a “polluter pays” approach or a “public pays” (or “public must compensate”) approach, as a matter of practical application, the first approach is preferable to the second for a number of reasons, including government “fiscal illusion” and “moral hazard.”
Topic:
Economics and International Organization
Political Geography:
United States, Latin America, and North America

34690. Assessing Globalization's Critics: "Talkers Are No Good Doers???"

Author:
Kimberly Ann Elliott, Debayani Kar, and J. David Richardson
Publication Date:
09-2002
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper is about the critics of the “doers” of globalization. It describes who they are, where they came from, what they want, how economists, policymakers, and others might understand them better, and where globalization might head from here. Many critics are themselves strongly internationalist and want to see globalization proceed, but under different rules. Some, particularly the protesters in the streets, focus mainly on what is wrong with the world. But some of them put forward broad alternative visions and others offer detailed recommendations for alleviating the problems they see arising from status quo globalization. Most of them have roots in long-standing transnational advocacy efforts to protect human rights and the environment and reduce poverty around the world. What brings them together today is their shared concern that the process by which globalization's rules are being written and implemented is undermining democracy and failing to spread the benefits broadly. This paper sketches the key issues and concerns that motivate the critics in a way that is broadly representative and intelligible to economists. It finds more resonance for the critics' agenda in economics than they commonly recognize. And it attempts to capture the concerns of Southern as well as Northern critics and to analyze the issues that divide as well as bring them together. Finally, it evaluates those issues and alternative proposals on which even globalization enthusiasts and the critics might come together cooperatively.
Topic:
Economics, Globalization, and International Trade and Finance