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War and Lack of Governance in Colombia: Narcos, Guerrillas, and U.S. Policy

by Edgardo Buscaglia, William Ratliffvia Analysis
Sunday, July 1, 2001

This essay is based on academic and field research conducted by both authors between 1994 and 2001 in Colombia and the United States. For more references, see Buscaglia, “Law and Economics of Development” in The Encyclopedia of Law and Economics (Cheltenham: Eduard Elgar, 2000).

Colombia today is crippled by its most serious political, economic, social, and moral crisis in a century, a condition that seriously threatens both Latin America and the national interests of the United States in the region.

Some Thoughts about Writing

by Thomas Sowellvia Analysis
Friday, April 27, 2001

From time to time, I get a letter from some aspiring young writer, asking about how to write or how to get published. My usual response is that the only way I know to become a good writer is to be a bad writer and keep on improving.

Personalizing Crises

via Analysis
Sunday, October 1, 2000

Increasingly, U.S. foreign policy targets miscreant leaders or regimes; recent examples, such as relations with Iraq and Yugoslavia, reveal that the normalization of relations is contingent on the removal of foreign incumbents. Although demonizing foreign leaders through such leader-specific policies has been criticized, it enhances the efficacy of U.S. policy through two mechanisms. First, the contingent nature of U.S. policy encourages citizens of pariah states to depose their leadership in order to restore their nation's international standing. Second, this potential threat to their leadership discourages foreign leaders from flaunting international norms in the first place. Unfortunately, in recent events the power of leader-specific policies to achieve success has been undermined by poor implementation. Unless leader-specific policies are explicitly stated, their ability to threaten a leader's hold on office is diminished. Hence, the effective implementation of leader-specific policies requires a bold declaration of foreign policy intent early in a crisis. The essay concludes with a discussion of the relative cost and gains in giving up flexibility to improve the efficacy of U.S. foreign policy.

Democratizing the World Trade Organization

via Analysis
Sunday, October 1, 2000

The WTO has been attacked by labor groups, environmentalists, and human rights organizations as an undemocratic institution, secretive and uncaring. However, the democraticness of the WTO hinges on how representative it is of both the winners and losers from free trade. This essay concerns which countries determine the course of policy proposals in the WTO and to what extent the winners or losers from free trade are championed by national trade negotiators. It is argued that opening the WTO process to greater participation could potentially pull outcomes further from the interests of the majority and toward the interests of unelected special interests.

U.S.-China Trade Issues After the WTO and the PNTR Deal: A Chinese Perspective

via Analysis
Tuesday, August 1, 2000

The U.S.-China trade agreement reached in November 1999 and the recent granting to China of permanent normal trade relations status by the U.S. Congress would pave the way for China’s entry into the World Trade Organization. Since the United States has long complained about the huge trade deficit with China, this accord should improve the bilateral trade balance in favor of the United States. Nevertheless, many long-standing trade issues between the United States and China remain unresolved.

     The major issue is the totally different estimates of the bilateral trade imbalance by the two countries. According to U.S. data, the United States runs a staggering merchandise deficit with China, whereas China puts this figure much lower. The main reason for the big discrepancy is how to treat Chinese exports to the United States and U.S. exports to China via Hong Kong. Many American and Chinese economists argue that the U.S. estimates grossly understate the real value of U.S. exports to China, distort the bilateral trade balance, and swell the U.S. trade deficit with China. Another factor is the influence of capital flow. Most Chinese export goods to the United States are produced by outward-processing firms. Most returns accrue to the United States and other foreign owners of these firms, whereas China earns only a negligible processing fee. Taking into account these fctors, the U.S. trade imbalance with China is significantly smaller than the U.S. official data suggest. There is no reason to make this issue a hostage in the U.S. domestic partisan struggle and thus poison U.S.-China political relations.

     Other trade issues include U.S. export control and sanctions against China, China’s alleged currency manipulation, and linking human rights to trade. If both countries can settle them through negotiations on an equal footing, U.S.-China economic cooperation will have a bright future. American capital, technology, and managerial skills combined with China’s huge market, low-cost labor, and resources will bring tremendous benefits to both countries.

Global Image

In Sickness and in Health: The Kyoto Protocol versus Global Warming

by Thomas Gale Moorevia Analysis
Tuesday, August 1, 2000

Advocates of curbing greenhouse emissions and ratifying the Kyoto Protocol contend that global warming will bring disease and death to Americans. Is this is likely? Should Americans fear a health crisis? Would a warmer world bring an epidemic of tropical diseases? Would Americans face increased heatstroke and summers bringing a surge of deaths? Would global warming bring more frequent and more violent hurricanes wreaking havoc on our citizens? Is it true that warmer climates are less healthy than colder ones? Would cutting greenhouse gas emissions, as the Kyoto Protocol requires, improve the health of Americans? This essay will show that the answer to all those questions is a resounding no.

Climate Policy—From Rio to Kyoto: A Political Issue for 2000—and Beyond

via Analysis
Saturday, July 1, 2000

Within the United States, global warming and related policy issues are becoming increasingly contentious, surfacing in the presidential contests of the year 2000 and beyond. They enter into controversies involving international trade agreements, questions of national sovereignty versus global governance, and ideological debates about the nature of future economic growth and development. On a more detailed level, determined efforts are under way by environmental groups and their sympathizers in foundations and in the federal government to restrict and phase out the use of fossil fuels (and even nuclear reactors) as sources of energy. Such measures would reduce greenhouse-gas emissions into the atmosphere but also effectively deindustrialize the United States.

International climate policy is based on the 1997 Kyoto Protocol, which calls on industrialized nations to carry out, within one decade, drastic cuts in the emission of greenhouse gases (GHG) that stem mainly from the burning of fossil fuels. The Protocol is ultimately based on the 1996 Scientific Assessment Report issued by the Intergovernmental Panel on Climate Change (IPCC), a U.N. advisory body. The IPCC's main conclusion, featured in its Summary for Policymakers (SPM), states that "the balance of evidence suggests a discernible human influence on global climate." This widely quoted, innocuous-sounding but ambiguous phrase has been misinterpreted by many to mean that climate disasters will befall the world unless strong action is taken immediately to cut GHG emissions.

This essay documents the inadequate science underlying the IPCC conclusions, traces how these conclusions were misinterpreted in 1996, and how this led to the Kyoto Protocol. I also discuss some fatal shortcomings of the Protocol and the political and ideological forces driving it.

The IPCC conclusion is in many ways a truism. There certainly must be a human influence on some features of the climate, locally if not globally. The important question—the focus of scientific debate—is whether the available evidence supports the results of calculations from the current General Circulation Models (GCMs). Unless validated by the climate record, the predictions of future warming based on theoretical models cannot be relied on. As demonstrated in this essay, GCMs are not able to account for observed climate variations, which are presumably of natural origin, for the following reaons:

  1. To begin with, GCMs assume that the atmospheric level of carbon dioxide will continue its increase (at a greater rate than is actually observed) and will more than double in the next century. Many experts doubt that this will ever happen, as the world proceeds on a path of ever-greater energy efficiency and as low-cost fossil fuels become depleted and therefore more costly.

  2. Next, one must assume that global temperatures will really rise to the extent calculated by the conventional theoretical climate models used by the IPCC. Observations suggest that any warming will be minute, will occur mainly at night and in winter, and will therefore be inconsequential. The failure of the present climate models is likely due to their inadequate treatment of atmospheric processes, such as cloud formation and the distribution of water vapor (which is the most important greenhouse gas in the atmosphere).

  3. The putative warming has been labeled as greater and more rapid than anything experienced in human history. But a variety of historical data contradicts this apocalyptic statement. As recently as 1,000 years ago, during the "Medieval climate optimum," Vikings were able to settle Greenland. Even higher temperatures were experienced about 7,000 years ago during the much-studied "climate optimum."

The IPCC's Summary for Policymakers tries hard to minimize the inadequacy of the GCMs to model atmospheric processes and reproduce the observed climate variations. For example, the SPM does not reveal the fact that weather satellite data, the only truly global data we have, do not show the expected atmospheric warming trend; the existence of satellites is not even mentioned.

The scientific evidence for a presumed "human influence" is spurious and based mostly on the selective use of data and choice of particular time periods. Phrases that stress the uncertainties of identifying human influences were edited out of the approved final draft before the IPCC report was printed in May 1996.

A further misrepresentation occurred in July 1996 when politicians, intent on establishing a Kyoto-like regime of mandatory emission controls, took the deceptively worded phrase about "discernible human influence" and linked it to a catastrophic future warming—something the IPCC report itself specifically denies. The IPCC presents no evidence to support a substantial warming such as calculated from theoretical climate models.

The essay also demonstrates that global warming (GW), if it were to take place, is generally beneficial for the following reasons:

  1. One of the most feared consequences of global warming is a rise in sea level that could flood low-lying areas and damage the economy of coastal nations. But actual evidence suggests just the opposite: a modest warming will reduce somewhat the steady rise of sea level, which has been ongoing since the end of the last Ice Ageóand will continue no matter what we do as long as the millennia-old melting of Antarctic ice continues.

  2. A detailed reevaluation of the impact of climate warming on the national economy was published in 1999 by a prestigious group of specialists, led by a Yale University resource economist. They conclude that agriculture and timber resources would benefit greatly from a warmer climate and higher levels of carbon dioxide and would not be negatively affected as had previously been thought. Contrary to the general wisdom expressed in the IPCC report, higher CO2 levels and temperatures would increase the GNP of the United States and put more money in the pockets of the average family.

But even if the consequences of a GW were harmful, there is little that can be done to stop it. "No-regrets" policies of conservation and adaptation to change are the most effective measures available. Despite its huge cost to the economy and consumers, the emission cuts envisioned by the Kyoto Protocol would be quite ineffective. Even if it were observed punctiliously, its impact on future temperatures would be negligible, only 0.05ºC by 2050 according to IPCC data. It is generally agreed that achieving a stable level of GHGs would require much more drastic emission reductions, including also by developing nations. To stabilize at the 1990 level, the IPCC report calls for a 60 to 80 percent reduction—about twelve Kyotos on a worldwide basis!

Finally, the essay attempts to trace the various motivations that led to the Kyoto Protocol. It concludes that U.S. domestic politics rather than science or economics will decide the fate of the Protocol; in particular, the presidential elections of 2000 will determine whether the United States ultimately ratifies the Protocol, which would be essential for its global enactment. Conversely, informed debate about the Protocol can influence the outcome of the elections.

The Divided China Problem: Conflict Avoidance and Resolution

by Ramon H. Myersvia Analysis
Thursday, June 1, 2000

This essay describes the origins of the divided China problem and how it has become the most troublesome factor in Sino-U.S. relations. From interviews and documentary evidence, the authors argue that Taiwan and mainland China achieved a détente in April 1993 and agreed on rules for negotiations to take place. Rather than propose a federation formula for resolving the Taiwan-China sovereignty issue, and to counter the 1979 federation proposal offered by Beijing's leaders, the Lee Teng-hui administration tried to redefine Taiwan's relationship with "China" and win U.S. support for its strategy, thereby undermining Sino-U.S. relations and aggravating Taiwan-mainland China relations. The authors propose how the divided China problem might be peacefully resolved and argue that the U.S. government and Congress should extend military support for the Republic of China regime only on the condition that it negotiate with the People's Republic of China regime under the "one-China" principle to resolve the divided China problem.

Political Instability as a Source of Growth

by Bruce Bueno de Mesquitavia Analysis
Wednesday, March 1, 2000

The U.S. government emphasizes the importance of stable political leadership as a necessary condition for economic growth. Contrary to this view, I show that high leadership turnover is strongly associated with high economic growth both in autocracy and in democracy. The effect of "unstable" leadership is stronger in democracies than autocracies because democratic political systems have institutions that promote competition over policy ideas rather than over the distribution of private benefits to cronies. Two institutions are shown to be particularly important in promoting such public goods as a fair legal system, transparent decision making and accounting, a strong national defense, and a healthy, growth-oriented infrastructure. These two institutions are a large selectorate (the set of people with a say in choosing leaders) and a large winning coalition (the set of people whose support keeps the incumbent in office).

Political leaders are eager to stay in office and, contrary to the neoclassical economic model, are not benign agents of the people in whose name they lead. Because autocrats depend on small groups of supporters, they emphasize the use of private benefits to their cronies as the means to gain political loyalty and stay in office. This means that they generally have little incentive to pay attention to the overall quality of their public policies.

Democrats, in contrast, require the support of a large coalition to stay in power. Because private rewards have to be spread thinly to many people, democrats find it easier to compete for office by providing public goods that benefit everyone rather than private benefits for a few cronies. This means that, in democracies, political competition is over policy ideas. Two effects follow from the fact that democratic leaders must build large coalitions: Democratic leaders provide better policies to improve their chances of surviving in office, and because competition is over policy ideas, they are more easily turned out of office in favor of a political challenger than are autocrats. Thus, autocrats have longer terms in office and produce less-efficient economic growth. The U.S. government emphasis on stable leadership as a necessary condition for growth is mistaken and can lead to global economic contraction rather than expansion.

A Strategic Flip-Flop in the Caribbean

by William Ratliffvia Analysis
Wednesday, March 1, 2000

For almost three decades the U.S. embargo of Cuba was part of America's cold war strategy against the Soviet bloc. It should have been lifted after that ‘‘war’’ ended since Castro ceased to threaten the United States and its neighbors and adopted the standard rules of international behavior. But inertia, a powerful Cuban American lobby, and misguided politicians set new demands: democracy, improved human rights, and economic reform. When Castro demurred we tightened the sanctions in 1992 and again in 1996 with the Helms-Burton Law. The United States has never committed the resources necessary to overthrow Castro, however, and the pressures we have applied have utterly failed to advance the three objectives. Worse yet, in the post–cold war world the policy and political outlook that sustain it have become a strategic liability. They promote conflict, both within Cuba—where a crisis might draw in the U.S. military—and abroad, as occurred in 1999–2000 after the arrival in Florida of the rafter boy, Elián González. They allow pressure groups to stand in the way of the policy-making process of the U.S. government. For example, the lobby manipulated wishy-washy politicians in 1998–1999 and got the president to turn down a widely supported proposal for a bipartisan commission to conduct the first comprehensive evaluation of the policy in four decades. Finally, the imperialistic Helms-Burton Law alienates allies worldwide and will poison relations between the United States and Cuba for decades to come. Castro will benefit no matter what we do, but on balance he gains more if we maintain the sanctions because they provide a scapegoat for his own repression and economic failures even as they enable him to maintain his cherished global image as the ‘‘scourge of U.S. imperialism.’’ Castro can wage a worldwide campaign against the embargo to bolster his image knowing Washington is too inflexible to change it. Indeed, whenever Washington has lightened up, Castro has tightened up and effectively prevented further improvement. Lifting sanctions need not mean establishing friendly relations with Castro—which he would reject in any event—or supporting his efforts to get international aid without meeting standard requirements. The ultimate responsibility for maintaining this antiquated and potentially dangerous policy falls on politicians who either do not understand the need for, or for political reasons are afraid to support, a new policy to benefit both Americans and Cubans in the post–cold war world.