Stationary Bandit

Was France Involved in the Rwandan Genocide?

Paul Kagame, President of Rwanda, thinks so.

A Rwandan government-appointed commission launched a probe on Tuesday into allegations French troops supported soldiers behind Rwanda's 1994 genocide and helped facilitate mass murder..  France had replaced ex-colonial power Belgium as Rwanda's main Western backer. When Kagame's Tutsi-dominated rebel army launched its war against the Hutu authorities in the early 1990s, France sent soldiers to Kigali.   France helped stop the advance of Kagame's forces and then stayed on, as military advisers, up to the start of the genocide.

Kigali says France backed the government of Rwanda's former President Juvenal Habyarimana, providing military training for government forces, despite knowing that some within the leadership were planning to use the troops to commit genocide.

This is a serious charge.  However, if the commission finds that France provided some type of support, I doubt it will change anything.  France's reputation will remain about the same.  Story here.

Did Sachs Prove Hayek Wrong?

Jeffrey Sachs recently claimed that the Scandinavian welfare states have outperformed English-style market economies on some key economic dimensions (see here).   I doubted his interpretation when I read it.  He presented means without presenting the standard deviation which should always raise red flags.  I checked his claims with some data from the World Development Indicators.  A different picture emerges from the WDI.  The English speaking market economies have a higher level of GDP per capita (once we exclude New Zealand- otherwise they are pretty close), a stronger budget situation (although excluding Sweden brings the numbers into near equality).  In addition, the growth performances of the two groups is nearly the same when adjusted for outliers. The English market economies have grown at approximately 2.48 % per year since 1990 while the Scandinavian countries 1.84 % per year.  Ireland drives most of this result.   Overall, the evidence does not suggest that one system outperforms the other. 

So what are we to make of the claims made by Sachs?  I think his piece projects a non-ideological position when it really is a ideological essay.  The data does not support his claims but he argues that it does.  Given that Sachs is an above average economist, I doubt he does not understand basic statistics.  He presented the inconclusive data as support for a policy position.  Is this consistent with his plea for the removal of ideology from the discussion?

War and the Hippo

In the Democratic Republic of the Congo, the population of hippos has declined significantly since 1988.  Recent events have exacerbated the problem.

Hippos will have disappeared from Africa's Virunga National Park by Christmas unless poaching is stopped, wildlife experts have warned.  Conservationists at the Zoological Society of London (ZSL) say that a Congolese militia group is understood to have killed half the hippo population in the park since setting up a base there two weeks ago.

The source of the decline has been the establishment of a military base at the park.  The soldiers have slaughtered the hippos for meat and ivory.  I wonder if individuals owned the hippos, would the same problem arise?  That is, what if the hippos had their own guns?  I suspect the outcome would be different based on the positive effects of the privatization of elephants in other parts of Africa. Story here.

Another Harvard Demotion

First, Andrei Shleifer loses his title.  Now, Martin Weitzman has lost his title as Ernest E. Monrad Professor of Economics.  What scandal justified the demotion?  "in April 2005, "he allegedly stole $600 worth of manure from a Rockport, Mass. farm, supposedly to use as fertilizer."  Story here and here.

The Zimbabwe Disaster Continues

Here is a headline from the BBC: Zimbabwe prisons 'embarrassing'

Is there anything about the present situation in Zimbabwe that is not embarassing?  It seems that the BBC could have a daily story that simply changes the last word.

Phelps and the Golden Rule

The Wall Street Journal interviewed Edmund Phelps yesterday.  He had some interesting things to say about the why we raise the taxes on the poor.  In addition, he reminded readers that the golden rule he developed for economic growth requires a subtle interpretation.

The Wall Street Journal: Many economists believe that the U.S. is acting irresponsibly by spending more than it produces and building up large debts. Your "golden rule" of capital accumulation states that each generation must save a certain amount so that future generations can enjoy the same standard of living. Should we be concerned?

Prof. Phelps: When you apply the golden rule, you have to look at the world economy. Certainly the world as a whole has saved enough. China, for example, should get good marks for doing a lot of saving. I would, however, have to give bad marks to the U.S. government, which has run persistent budget deficits at a time when we have to start climbing up the mountain of pension obligations that will come due with the retirement of the baby boomers.

Greg Mankiw has some additional comments.

Recommended Economic Reading

Some professors at Carnegie-Mellon have put together a list of economic books for the ambitious student.  It should be William Easterly not Richard Easterly; Olsen should be Olson, and Paul Shiller should be Robert Shiller.  I would remove Heilbroner, Galbraith, Keynes, Sen, and Duffie from the list.  I would add  Sen's "Poverty and Famines", Thomas Sowell's "Knowledge and Decisions", David Landes "The Wealth and Poverty of Nations", and Deepak Lal's "The Poverty of Development Economics."  Thanks to Newmark's Door for the pointer.

End of the Shleifer Affair?

Maybe, just maybe, it is finally over.

Star Harvard economist Andrei Shleifer has been stripped of his honorary university title following an investigation into whether he violated the university's ethical rules while advising the Russian government.

Yesterday morning, the entry for Shleifer in the online campus directory changed from ``Whipple V.N. Jones Professor of Economics," to ``Professor of Economics." A Harvard spokesman confirmed that the new title was accurate.

The title, known as a named chair, is an honor bestowed upon a distinguished senior professor. However, at Harvard, named chairs are generally not tied to salary, so the loss of the title doesn't mean that Shleifer will be penalized financially. The title professor indicates that he will retain tenure.

Story here.

Thoughts on Phelps

Comments regarding the awarding of the Nobel Prize in Economic Sciences in Memory of Alfred Nobel have focused on Edmund Phelps contribution to the expectations augmented Phillips Curve.  I do not find these contributions particularly significant given that Milton Friedman’s Nobel Lecture aptly summarized the theory three decades ago.  However, Phelp’s research program deserve the Nobel Prize.  Only Pete Boettke seems to have understood the broader research program that Phelps has pursued.  Phelps once said that "The problem was that I wanted to reconcile microeconomics with macroeconomics. The solution was to throw away the textbook of microeconomics."  Phelps did not seek to reformulate macroeconomics on neoclassical foundations.  Robert Lucas and Edward Prescott made their careers by pursuing that question (Here is an essay that places Phelps in this tradition, broadly speaking).  Instead, Phelps sought to reformulate microeconomics and then construct macroeconomics on these foundations.  This agenda has not been pursued.  Hopefully, it will.