ECONOMIC SANCTIONS: FAILED FOREIGN POLICY TOOL AND A COST TO AMERICAN BUSINESS

In recent years the US government has increased its use of economic sanctions in order to punish countries, organisations and individuals. This form of foreign policy has become an increasing burden on US business and adversely affects US competitiveness and perceived reliability in the global marketplace. In addition, economic sanctions are generally ineffective in producing the desired changes and often harm the people they were intended to help. This paper argues that economic sanctions are an increasing menace to US business, represent an ineffective tool of foreign policy, and do not meet generally accepted ethical standards.     

THE ETHICS OF ECONOMIC SANCTIONS

This article examines economic sanctions from an ethical perspective. Utilitarian ethics and rights theory are applied to economic sanctions in general. Special attention is paid to the economic sanctions imposed against Iraq and Cuba. The conclusion is that economic sanctions are very difficult to justify on any grounds and have negative consequences. Sanctions should not be used as a tool of international relations.     

THE RISE AND DECLINE OF ECONOMIC POLICY AS AN AUTONOMOUS DISCIPLINE: A CRITICAL SURVEY

After Adam Smith's statement of market virtues, the process of gestation of economic policy as a rational set of rules for public agenda has been rather slow. Until not so long ago, economic policy as a discipline was often confined to prescribing practical rules intended to explain technical procedures of government intervention. Economic policy– as a coherent and to some extent autonomous discipline–only emerged in the late 1950s in Scandinavia, the Netherlands and Italy, when solid foundations indicating not only microeconomic but also macroeconomic market failures and a theory about the conditions for policy effectiveness and design were consistently developed. This paper intends to explain the reasons for the emergence of the discipline, the circumstances that favoured its diffusion, the reasons for its apparent setback and some factors that could facilitate its diffusion in the next years     

ON THE EFFECTIVENESS OF FISCAL POLICY AS AN INSTRUMENT OF MACROECONOMIC POLICY

This paper demonstrates that fiscal policy is an effective and essential instrument of stabilisation macroeconomic policy. This is particularly so if it is co-ordinated with monetary policy, especially in the current worldwide economic situation.     

ON THE INEFFECTIVENESS OF FISCAL POLICY AS AN INSTRUMENT OF MACROECONOMIC POLICY

Spending depends on the quantity of money. If an increase in the budget deficit is financed by sales of government debt to non-banks, the quantity of money is unchanged and public borrowing 'crowds out' private spending. But – if the government finances its deficit (or buybacks of existing debt) from the banks – the quantity of money, and hence spending and national income increase.     

THE MAKING OF ECONOMIC POLICY

Books reviewed in this article:
Rosalind Levacic (1987) Economic Policy-Making: Its Theory and Practice.
Paul Whiteley (1986) Political Control of the Macro-Economy.
Douglas A. Hibbs Jr. (1987) The Political Economy of Industrial Democracies.
Wyn Grant with Jane Sargent (1987) Business and Politics in Britain.
Michael Moran (1986) The Politics of Banking     

THE ECONOMETRIC ANALYSIS OF ECONOMIC POLICY

The application of econometric analysis to the process of economic policy formulation is considered. A framework is provided by the theory of reduction, specifically reductions where key information losses would invalidate policy. Consequently, model evaluation; the role of econometric models; forecasting; exogeneity; causality; constancy and invariance; unobservables; seasonality; and data integrability are considered, together with specific policy issues where econometrics can clarify the problems.     

THE APPLICABILITY OF THE TRADITIONAL THEORY OF ECONOMIC POLICY

Abstract. The traditional theory of economic policy requires targets, instruments, an empirical economic model, and a social welfare or criterion function to be specified in order to derive the optimal economic policy. Empirical studies of reaction functions suggest that economic policy is carried out in some systematic manner, subject to interference from political factors. This survey addresses the problems of specifying, estimating and applying an economic model when economic policy is following a path specified by a reaction function. Attention is paid to rational expectations, the Lucas'critique, and the policy neutrality proposition. Lack of knowledge of the policy maker's objective function poses the most serious difficulty when applying the theory of economic policy. Various methods of determining this function are reviewed, and the possibility that policy makers might be satisficing is discussed. The role played by political factors is considered in the light of the public choice literature.     

AGRICULTURAL POLICY AS A SOCIAL ENGINEERING TOOL: A NEW JERSEY CASE STUDY

This study uses logistic regression to examine the preferences for social engineering policies in the agricultural sector in a New Jersey case study. It finds that farm operators are unlikely to support a policy allowing countries to restrict trade to pursue domestic economic and social policy goals if the policies affect international trade. In particular, it suggests that farm operators with annual gross sales including government payments between $500 000 and $999 999 are 80 percent less likely to indicate such a preference. Farm operators with advanced degrees, some college education, and a high school diploma are also unlikely to indicate such a preference. In contrast, farm operators who receive no income from farming or ranching and those who receive a percentage of family income from farming or ranching indicate that countries should be allowed to restrict trade to pursue domestic economic and social policy goals even if the policies affect international trade.     

POLITICAL PROCESS AND THE FORMATION OF ECONOMIC POLICY

Institutional economics has some useful things to say about government policy-forming processes. It focuses attention on the structural components of government institutions which shape the direction of policy formation and its delivery. In this article, the author discusses how institutional models of government decision-making may be adapted to parliamentary systems of government. This approach has some merit because it rescues analysis of government processes from models based on the US constitutional system.     

DESTROYING A COUNTRY IN ORDER TO SAVE IT: THE FOLLY OF ECONOMIC SANCTIONS AGAINST MYANMAR

The government of the United States has imposed economic sanctions on the Union of Myanmar, formerly known as Burma, due to the ruling junta's lack of respect for democracy and human rights. This paper proposes that those sanctions, while well intended, are ineffective, unethical and harmful to the people to whom they are intended to help.     

THE USE AND ABUSE OF MARKETS IN HOUSING POLICY

This paper argues that, despite its rhetoric in support of markets, government does not understand how markets work, but is rather trying to use certain aspects of markets to control social housing. The paper looks at three areas: first, the idea of private finance and how this is used by government as a form of public policy; second, the notion of risk and whether it actually occurs in social housing; and third, the contention that government is incapable of appreciating the manner in which markets operate because it only wishes to provide safe options and so cannot countenance real choice and competition.     

MONETARY POLICY AND ECONOMIC IMBALANCES: AN ETHNOGRAPHIC EXAMINATION OF CENTRAL BANK RITUALS

We apply the ethnographic tools of economic anthropology to analyse a particular ritual performed by the high priest of the Arbee sub‐tribe in the South Pacific island group of Aotearoa. (In other island groups, this high priest is sometimes known as the Governor of the Reserve Bank of New Zealand.) The ritual is considered by many within Aotearoa to be the cause of The Imbalance in The Economy. We analyse this claim and show that it has similarities (and equal validity) to claims of other cargo cults within the South‐West Pacific region.     

INTERNATIONAL GOVERNANCE OF THE INTERNET: AN ECONOMIC ANALYSIS

Economists have long recognised that government may serve as a vehicle to create and maintain monopoly power and hence generate economic rents for a favoured few. The Internet Corporation for Assigned Names and Numbers (ICANN) has a government-provided monopoly of the allocation of top-level domains (TLDs) on the A-root server and so generates economic rents. The A-root server is the only computer network that links registered TLDs to the Internet. This paper uses insights of the economics of regulation and rent seeking to explain how existing technology may bypass ICANN and thus restore a competitive market in domain names.     

AN ECONOMIC POLICY HYPOTHESIS OF METROPOLITAN GROWTH CYCLES: A Reflection on the Recent Rejuvenation of Tokyo*

Rejecting the simplistic life-cycle hypothesis of cities put forth by Klassen and Paelinck, this paper advances a new hypothesis for the cyclical movements of urban growth that have taken place on a world-wide scale. The recent rejuvenation of major industrialized cities is largely attributed to the shift in the government's economic policies toward a smaller government, supported by the existence of economies of scale in large cities. The paper closely examines Tokyo's recent rejuvenation and shows how the government's conservative economic policies of the 1980's helped reverse the declining trend of the previous decade.     

HOMO DEMOCRATICUS: OR WHY DEMOCRACY SHOULD NOT BE THE OBJECTIVE OF US FOREIGN POLICY

This article argues that government efforts to support democratisation in other countries are often counterproductive because they further strengthen government institutions over and above a responsible, active, citizenry and often target the wrong recipients because of government aversion to risk. Foreign assistance programmes would do better to support individual liberties rather than democracy.