Hurricane Katrina: Was There a Political Economy of Death?

An empirical implication of egalitarianism in the provision of public disaster relief services is that the probability of surviving a natural disaster should not be conditioned on a household’s position in the income distribution, or its racial characteristics. In this paper, we utilize data on deaths attributed to Hurricane Katrina in the City of New Orleans to estimate a political economy model of the public provision of disaster rescue services. Parameter estimates reveal that the probability of dying as a result of Hurricane Katrina, at both the census tract and individual level, increased with respect to being black and poor. Our results suggest that there was a departure from egalitarian principles in the provision of public disaster rescue services during Hurricane Katrina, and are consistent with a political economy of race and class governing decisions about the allocation of public resources to ameliorate population environmental risks.

Effects of multimember districts on black representation in state legislatures

We look at the most general feature of multimember districts (MMDs) as compared to single-member districting (SMD) plans: the higher likelihood of submergence of minority voting strength. We focus on data on black legislative representation between 1977 and 1982 in the 11 states with more than 15% black populations, and compare states which use MMDs with those that use SMDs. We also examine changes in black representation in states which shifted from MMDs to SMDs. In addition, for MMD state legislative elections in eight North Carolina counties between 1978 and 1982, we examine in detail the nature of minority submergence including the lack of geographic representativity of the persons elected from MMDs. The counties we examine contain four of North Carolina’s largest cities and a substantial portion of North Carolina’s black population. Unlike almost all of the previously published literature on racial representation in MMDs, our study deals with state legislative races and not local elections.     

Microfoundations and Hicksian monetary theory

Summary John Hicks was the first economist to use a general equilibrium framework as a foundation for a dynamic macroeconomic analysis. A critical assessment of his work in this area is used to evaluate the contributions of the ‘micro-foundations’ discussions of the 1970’s. It is noted that Hicks’s starting point, the question of the role of money in a general equilibrium framework, is precisely where the current debate has arrived some fifty years later. This delay, and the foundations debate, were due in large part to Hicks’s own attempts to interpret Keynes’s theory in terms of his own, original framework. Suggestions and comments from P. Davidson, O. Steiger, and the editor, as well as the participants of seminars in the University of Bremen and the Economics Institute of the Faculty of Statistics of the University of Rome are acknowledged without implication of responsibility.     

Monetary Policy and Natural Disasters in a DSGE Model

In the immediate aftermath of Hurricane Katrina, speculation arose that the Federal Reserve might respond by easing monetary policy. This article uses a dynamic stochastic general equilibrium (DSGE) model to investigate the appropriate monetary policy response to a natural disaster. We show that the standard Taylor rule response in models with and without nominal rigidities is to increase the nominal interest rate. That finding is unchanged when we consider the optimal policy response to a disaster. A nominal interest rate increase following a disaster mitigates both temporary inflation effects and output distortions that are attributable to nominal rigidities.     

Regional infrastructure problems as a source of social and economic threats

Using the Chernobyl nuclear disaster as an example the author analyzes the government’s clean-up efforts to show that the complexity of infrastructure systems challenges existing institutional entities, which increasingly often prove unable to secure their accident-free and reliable operation. Various infrastructural problems are illustrated to validate the need for developing service-producing industries within the public sector relying on public investment.     

State-of-the-art of Russia’s heat supply systems

The paper overviews the contemporary state of Russia’s heat supply systems and fuel consumption within its centralized part, the structure of heat consumption by economic sectors and types of industrial consumers. As shown, the centralized heat supply systems, providing the major part of country’s economy with low temperature heat, have heat losses and accident rate at a critical level. The state of decentralized heat supply systems of low rise buildings is not covered by national statistics at all. A second paper on the prospects and development of Russia’s heat supply systems will be published in a subsequent issue.     

Development prospects and policy for Africa: Structural adjustment and beyond

Conclusion Africa’s economic recovery in the 1990s, though somewhat fragile, is very encouraging. Policy reforms, primarily in the form of SAPs, have led to improved economic performance. However, as we approach the post-SAPs era of the 21st century, African countries need to intensify efforts in the pursuit of sound policies and further structural reforms. Much higher growth rates, exceeding 7 percent annually, are deemed as necessary to be attained and maintained over a longer period for there to be meaningful reductions in poverty. This paper has advocated a set of policy areas which need to be given priority in Africa as the 21st century approaches. African countries are in a better position now, than anytime since the crisis of the 1980s, to build a path toward sustainable development. In that regard, maintaining market-oriented policy reforms remains the imperative for the immediate future and beyond. It is now up to Africa’s leaders to provide the requisite leadership for a home-grown, rather than donor driven, attempt at sustainable socio-economic development.     

Comparative labor supply of black and white women

Conclusions The presence of young children decreases women’s labor supply as shown by the LFPRs for women with young children (which are always considerably lower than those for women without young children). Also, the number of young children is almost always negatively related to annual hours of labor supplied (significantly so in half the regressions). Black and white women are found to have an inelastic labor supply, but with increasing elasticity from 1969 to 1974. There is a statistically significant difference in the estimated regression coefficients of the labor supply model for black and white married women in 1969 and 1974 in both the arithmetic and logarithmic forms. The husband’s earnings are significantly negatively related to white married women’s annual hours of work in 1974, while the relationship is not significant for black married women. Crosselasticity terms show that white married women decrease their annual hours of work in response to an increase in husband’s earnings to a greater extent than black married women in 1971 and 1974. These results are consistent with the hypothesis that black women do not rely on their husband’s earnings to as great an extent as white women.     

The role of foreign direct investment in the host-country firm selection process: firm-level evidence from Slovenian manufacturing

This paper examines the role of inward foreign direct investment (FDI) in firm selection processes in the Slovenian manufacturing sector in the 1994–2003 period. It adopts the firm dynamics framework that allows testing of selection effects directly by assessing the impact of foreign firms’ activity on the probability of exiting of local firms (crowding out). The results show that intra-industry productivity spillover effects offset only a minor part of the competition pressure which results from foreign firm entry, hence incumbent firms experience a drop in their survival probability upon a foreign firm’s entry within a particular industry. This result is driven by foreign firm entry of the greenfield type, as entry through the acquisition of existing firms has no significant effect. The strength of the crowding-out effect decreases with the incumbent firm’s export propensity. There is no significant evidence that inward FDI would stimulate the selection process through backward linkages in the upstream supplying industries, whereas foreign firms’ activity reduces the exit probability of downstream local customers (through forward linkages).     

Inflation and total factor productivity in Germany: A response to Smyth

Conclusion The results in this paper support a somewhat modest conclusion: that for the rather tight range of inflation experienced by Germany over the sample period (-1.8 to 7.8 percent), inflation’s impact on TFP growth was so minor that it did not show up as statistically significant in the analysis. This conclusion is consistent with previous cross-sectional based research.⁹ The findings illustrate that Smyth’s analysis of the contemporaneous correlation between TFP growth and inflation quite likely overstates the potential benefit to Germany of zero inflation. One area for future inquiry, however, is whether the absence of inflationary effects on TFP growth also holds true for nations which have experienced higher levels, and greater fluctuations, of inflation than has Germany since 1950. It is possible that the German results are not the norm due to the nation’s relatively low average rate of inflation.     

Effective environmental protection in the context of government decentralization

China has shifted control over resources and decision making to local governments and enterprises as the result of the economic reforms over the past three decades. This devolution of decision-making to local levels and enterprises has placed environmental stewardship in the hands of local officials and polluting enterprises who are more concerned with economic growth and profits than the environment. Therefore, effective environmental protection needs their full cooperation. Against this background, this paper discusses a variety of tactics that China’s central government has been using to incentivize local governments, and a number of market-based instruments, supporting economic policies, environmental performance ratings and disclosure and cooperation with financial institutions to promote long-lasting, improved corporate energy-saving and environmental performance. It concludes that there is a clear need to carefully examine those objective and subjective factors that lead to the lack of local official’s cooperation on the environment, and provides some suggestions for appropriated incentives to get their cooperation.     

Bastiat’s legacy in economics

We have discussed four areas in which Frédéric Bastiat has made important contributions to economic theory. These contributions have had lasting value and are liable to enrich current research in the Austrian tradition. Bastiat’s great themes-harmony rather than equilibrium, property versus spoliation, and property and value-have been almost completely neglected in professional economic science during the unfortunate twentieth century. It is therefore time to return to the works of this genius and to build on some of the foundations he has laid.     

The Political,Economic, and Social Aspects of Katrina

In this paper, we examine the resiliency of community recovery after a natural disaster. We argue that a resilient recovery requires robust economic/financial institutions, political/legal institutions, and social/cultural institutions. We explore how politically and privately created disaster preconditions and responses have contributed to or undermined institutional robustness in the context of the Gulf Coast's recovery after Hurricane Katrina. We find that where postdisaster resiliency has been observed, private-sector responses contributing to the health of these institutional arenas are largely responsible. Where postdisaster fragility and slowness has been observed, public-sector responses contributing to the frailty of these institutional arenas are largely the cause. In other words, we engage in a comparative institutional analysis of civil society, entrepreneurial commercial society, and government agencies and political actors in the wake of a natural disaster.     

The evolution of pension size in pensioner’s income parameters

Preliminary results from the first stage of the 2002–2008 pension reform, as well as the state of pension provision in the prereform period and their effect on pensioner’s income provision, are examined in terms of a methodological problem in organizing a pension system.     

Fannie Mae, Freddie Mac, and the Freedman’s Savings Bank

The experiences of Fannie Mae and Freddie Mac during and prior to the Financial Crisis of 2007–09 call to mind the history of the Freedman’s Savings and Trust Company, a prominent bank founded for the benefit of former slaves just after the Civil War. This paper notes similarities concerning the initial motivation for the creation of all three institutions and draws parallels between their mismanagement and subsequent failures. The paper also discusses the government’s response to the institutions’ downfalls and the legacies that the institutions left behind.     

Effectiveness of the strategy and regional risks of creating the East Siberian Oil and gas Complex

The paper gives a systematic presentation of major risks at the pioneering stage of creating the East-Siberian Oil and gas Complex (ESOGC). It also estimates probable consequences of these risks for socioeconomic development of the regions. To assess regional risks, we have used the traditional method of analyzing regional development scenarios under different corporate business strategies. The latter are presented as a set of investment projects and intentions as well as constraints and preferences of the state represented by constituent entities of the Russian Federation. Economic effects in the ESOGC regions are analyzed by growth indicators of the region’s GRP and revenues of the regional and local budgets.     

Racial differences in unemployment: A spatial perspective

Conclusions It has been demonstrated that racial differences in unemployment in the nation’s largest metropolitan areas are widespread. The differences tend to vary, however, by region with the greatest difference occurring in the metropolitan areas of the North-Central region and the least difference occurring in the metropolitan areas in the West.     

Race and prosecution expenditures

There has been a steady accumulation of literature on racial differentials in crime and the response of the criminal justice system. A neglected component of societal response to crime has been the volume of prosecution expenditures. This article seeks to repair this neglect by examining state level difference inper capita prosecution expenditures in 1980 using a multiple regression equation. The results show that, holding other factors constant, lower prosecution expenditures are associated with higher percentages of blacks in a state’s population. The relationship of this to discrimination is discussed in terms of England.     

The 2007 General Elections in Nigeria: An Account of the Politics of Personal Rule in an African Country by a former Presidential Aide

This article is an insider’s account of the vicious political struggles that shaped the April 2007 general elections in Nigeria which were adjudged to be fraudulent. It argues that the form of political struggles that gave rise that election derive from the enthronement of a particularly vicious and violent form of personal rule which is itself a product of Nigeria’s colonial rule and long history of military dictatorship which saw to the concentration of power and resources in the state in the context of the existence of a weak bourgeois class and generalized poverty for the generality of the population. The intrigues and power struggles in Nigeria during its 4th Republic 1999–2007, particularly the power struggle between the country’s President and his deputy are discussed to illustrate the character of Nigerian (and perhaps African) politics. Some suggestions are offered for a more just and stable Nigerian polity.     

Portfolio adjustment in open economies: A comparison of alternative specifications

Zusammenfassung Portfolio-Anpassung in einer offenen Volkswirtschaft. Ein Vergleich alternativer Spezifizierungen. — Dieser Aufsatz vergleicht zwei Spezifikationen eines Modells einer kleinen offenen Volkswirtschaft: Erstens eine Bestandsgr?Βen-Version, in der die Haushalte die gewünschten Verm?genswerte sofort nachfragen und zweitens eine Stromgr?Βen-Version, in der die Nachfrage eine allm?hliche Anpassung an den langfristig gewünschten Bestand an Verm?genswerten bewirkt. Die beiden Varianten werden bei festen und flexiblen Wechselkursen verglichen, beide jeweils unter der Annahme vollst?ndiger oder fehlender Kapitalmobilit?t. Sie zeigen unterschiedliche Anpassungsverl?ufe bei festen Wechselkursen, wenn das heimische Geldangebot endogen ist, und besonders, wenn es keine Kapitalmobilit?t gibt (wenn das heimische Angebot an Wertpapieren nicht endogen ist).

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Résumé L’ajustement de portefeuille dans des économies ouvertes: une comparaison de spécifications alternatives. — Cet article compare deux spécifications d’un modèle d’une petite économie ouverte: (1) une version de stock, dans laquelle les ménages entrent dans les marchés d’actif avec des demandes de stock immédiates d’actif et (2) une version de flux, dans laquelle ils entrent dans les marchés d’actif avec des demandes de flux reflétant un ajustement vers des demandes de stock à long terme d’actif. Les deux versions sont comparées sous des taux de change fixes et fléxibles chacune couplée avec une mobilité de capital parfaite ou pas une mobilité. Elles se conduisent d’une manière différente sous des taux de change fixes (si l’offre d’argent locale est endogène) et sont très per?antes s’il n’y a pas une mobilité de capital (si l’offre locale d’emprunts n’est pas endogène).

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Resumen Ajustes de portafolio en economías abiertas. Una comparaci?n de especificaciones alternativas. — Este artículo compara dos especificaciones de un modelo de una economía abierta pequena: (1) una version de stock, en la cual los presupuestos familiares entran en el mercado de activos con una demanda inmediata por activos y (2) una version de flujo, en la cual ellos entran al mercado de activos con demandas de flujo que reflejan un ajuste gradual a las demandas de stock por activos de largo plazo. Las dos versiones se comparan bajo tasas de cambio fijas y flexibles, cada una con movilidad perfecta de capital o no. Ellas se comportan en forma diferente bajo tasas de cambio fijas (cuando la oferta de dinero local es endógena) y son muy penetrantes cuando no hay movilidad de capital (cuando la oferta local de bonos no es endógena).