Politics and economics tend to make rather strange bedfellows, and I wanted to take a bit to discuss the relationship between the two in regard to China. One of Barak’s comments on a recent post of mine urged me to raise the issue again, as it’s obviously of current relevance given the calls for political change in China.  Often in the past observers of Chinese politics have had their spirits raised at the prospect of political change, only to find themselves disappointed as the status quo is maintained, personally I expect about the same this time around.  That being said, my focus in this post is to discuss the role of China’s economic successes in keeping the nation’s regime precisely as it is. Read the rest of this entry…

Aid will not be effective unless it gives governments an incentive to govern well. Thus, when considering whether or not to adopt a new aid mechanism, the question we need to ask is whether it will provide recipient governments with such an incentive. I think we can simply a lot of the debate about improving aid effectiveness by re-orienting it around this rather simple question.*

* I should note that this applies only to outcomes that are endogenous to recipient government behavior. For example, if the US developed a spray that could eliminate malaria, have no other effects, and deliver it from planes above a country’s surface, politics in the host country would be irrelevant.

That Karzai’s been taking money from Iran has been all over the news. This is not a surprise. Anyone who has watched Casino would have seen it coming. As Joe Pesci (Nicky Santoro) sagely observed:

You gotta know that a guy who helps you steal – even if you take care of him real well – he’s gonna steal a little extra for himself. Makes sense, don’t it?

Nicky was referring to casino workers who were stealing from the casino owners. How does this relate to Afghanistan? Karzai has been wearing an “Open for Business” sign around his neck since George W. Bush & Co.”persuaded” him to become Afghanistan’s president. That he would take bribes from pretty much anyone who offers them is exactly what Nicky would expect.

Jackson Diehl at the Washington Post seems convinced that a new technology can take down the Iranian regime. He knows this because the the makers of the new technology have told him so in what I think is very humble language:

The companies’ volunteer founders and operators say that if they could get $30 million in funding they could ramp up their server networks to accommodate millions more users — and effectively destroy the Internet controls of Iran and most other dictatorships.

Got it? Give us 30 million and we will end monitoring of the internet over the world!  The technology in question is UltraReach, a type of circumvention software that allows users to evade internet firewalls.  The software works well enough, but the company’s servers keep crashing when too many people use it.  This causes them to limit the amount of people who can use it, and limit the amount of sites users can visit through it.   Diehl seems to agree with the makers of the software that they need more money, and he takes the State Department to task for not spending the money quicker to beef up the servers. Read the rest of this entry…

Like Kristof, I don’t agree that emancipating women is a very good justification for fighting a war in Afghanistan we probably can’t win. At the same time, life under the Taliban was pretty miserable for women and allowing a return to the status quo ante makes me a bit ill. Kristof is optimistic we can avoid such a fate. I hope he is correct.

Elizabeth is concerned that voters don’t link defense spending (or more specifically the cost of the war in Afghanistan) with the large budget deficits the US government is currently running. Elizabeth believes that if voters understood the link better, there would be more pressure to cut defense spending as a way to reduce the budget deficit.

I don’t disagree with Elizabeth’s logic. I  disagree with her premise that the budget deficit is a bad thing at the moment. Rather, I think this is a good thing because the only way out of our slump at the moment is through government spending. The logic is straightforward. Consumers aren’t going to start spending more until they have paid down their debts. As a result, private sector demand – and hence employment – is stagnant. One way to create jobs and thus help consumers to pay down their debts is through government spending. As a result, budget deficits are a good thing given the current state of the economy. (For the wonks who care about rising debt levels, what would be worse is for the government to do nothing. This would cause deflation and hence rising debts in real terms. Within reasonable limits, more government spending would not make us worse off compared to allowing deflation.)

Now my preference would be for the government to spend on infrastructure, education, and innovation, but Congress doesn’t want to do that. Thus, we need to find spending that Congress would support. I’ve been thinking about that and I’ve come up with an answer: war. I’m not advocating that we invade anyone new, but I think that the Obama administration could wage a PR campaign that says DoD needs more money. To those who would fight the administration on more defense spending, the response is simple: Don’t you support the troops? Why do you hate America?