P.T. Bauer on development economics and comparative institutional analysis

Image

Robert Lucas on the role of the family in economic development

Image

In Praise of Cheap Labor: Bad jobs at bad wages are better than no jobs at all – Paul Krugman

via Slate – Dismal Scientist – March 20, 1997.

Benjamin Powell, In Defense of “Sweatshops”

via Benjamin Powell, In Defense of “Sweatshops” | Library of Economics and Liberty.

Steven Landsburg on closing sweatshops in poor countries

Image

Green bigots international

Image

FA Hayek on social justice and development economics

Image

Hayek on the role of culture in economic development

Image

A tale of two cities – Hong Kong’s and Singapore’s different paths to prosperity

Hong Kong and Singapore had different parts to prosperity. Alywn Young found that Hong Kong had made real productivity gains, but Singapore grew by a massive dose of savings and investment, including foreign investment.

For most of the post-war era, the Hong Kong government adopted a policy of minimal intervention. the government of Singapore has pursued maximalist policies involving widespread state participation in economic activity and aggressive industry targeting policies.

The share of investment in Singapore’s GDP rose from 9% in 1960 to 43% in 1984, while Hong Kong’s remained steady at about 20%. Productivity growth in the aggregate non-agricultural economy was a miserable -0.3% in Singapore and 2.3% in Hong Kong.

What does this mean in practical terms? Real consumption, real consumer spending, per capita in Hong Kong is 20%  or more higher than in Singapore!

Hong Kong actually enjoyed their prosperity. Robert Barro explains this in a comment on Young’s paper:

In 1985, when Singapore’s per capita real GDP was 102% of Hong Kong’s, the consumption was only 70% of Hong Kong’s.

To put it another way, Hong Kong’s per capita real consumption grew by 5.9% per year from 1960 to 1985, about the same as for GDP, whereas Singapore’s grew by only 2.8% per year, much less than GDP.

In terms of output per capita and output per worker, the growth of Hong Kong and Singapore are equally impressive. Hong Kong does much better in terms of  productivity growth growth.

Hong Kong did not require as rapid capital accumulation as Singapore. Since capital accumulation is financed either by domestic saving or foreign saving, people in Hong Kong can afford to save less or borrow less from foreign economies. Saving less now means more consumption now.

In the case of Hong Kong, their living standards are far superior to Singapore’s. The government of Singapore wasted a good 20 to 30% of national income on industry targeting and compulsory savings.

Hong Kong experienced rapid total productivity growth, while Singapore  experienced no improvement whatsoever in total productivity during its East Asian Tiger years. Young (1992, 1994, 1995) demonstrated that from 1967 onward total factor productivity growth in Singapore was next to nil, and for significant parts of the period most likely negative. Only productivity allows a nation to support and enjoy high wages.

Paul Krugman on those soulless multinational corporations doing business in the Third World

Image

Development economics in a nutshell: Gordon Tullock developed his rent seeking insight when he was a diplomat in China

Image

Ludwig von Mises as a development economist

Image

An Austrian school economist visits Tacloban

When we landed at Tacloban airport just before New Year’s Day, the devastation from Typhoon Haiyan (Yolanda to the locals) was everywhere. Most of the walls of the airport were missing but the supporting beams survived and there was a make-shift roof. We drove for an hour before the damage was no more than lost roofs.Image

At the airport, there were no barriers between the departure area and the tarmac.

Image

A little known use of those lost walls was stopping the jet engines blasting into the waiting lounge. No photo because I was too busy running.

The Tacloban airport is named after an uncle of Imelda Marcos. The city mayor is her nephew; you may have seen him on CNN. Other relatives of Imelda on the island of Leyte have been congressmen, provincial governors or town mayors in a dynasty that rotates between offices because of term limits.

The café next to the airport where I had breakfast when I was last in Tacloban in January 2012 was washed away, sadly along with its owner.

I remember reading the local newspapers in that café in January 2012. A feature story was about the private armies employed by local politicians. These private armies could be 40 strong. Cronyism and a lack of a rule of law could explain why Leyte is among the poorest islands in the Philippines.

All the surrounding restaurants were wiped out. But the food vendors are back at the airport – the entrepreneurial spirit is very resilient! Tacloban airport was one of the few places where I could get diet coke in all of Leyte.

Image

The only upside of the typhoon was Imelda’s large sea-side walled compound was washed away. There is a god: a vengeful god!?

We dropped in on a friend on the way to my parents-in-law. He had lost power. He said that straight after the typhoon, entrepreneurs were going door to door selling bottled water.

By the time we had arrived, everyone on the island of Leyte had received five-weekly rations of five kilos of rice and other essentials from the town hall. My mother-in-law had no need for this ration so she gave it to less well-off neighbours. Her town was not damaged much at all by the typhoon. They are on the other side of the mountain from Tacloban.

My in-laws living on an island further north of Leyte lost their roof and a wall. Terrifying.

Local merchants must find it hard to rebuild their businesses when everyone is getting food for free from the town hall many weeks after the disaster. This includes areas that suffered little damage.

The consular travel warning for all of Leyte was very ‘high risk’ – one below ‘avoid all travel’. Advised to be self-sufficient and be on guard for bandits, etc.

The owners of a very nice 5-room chalet at the other end of Leyte where my sister-in-law and her family stayed were most unimpressed by the over-inclusive consular travel warnings.There were many cancellations so their business was just ticking over rather than in a profit. Little wonder that the girl behind the makeshift car rental desk in the arrivals lounge at Tacloban airport did not seem to get much business when we arrived.

A Venerable Puzzle

"The British constitution has always been puzzling, and always will be." --Queen Elizabeth II

Economics New Zealand

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Real Time with Bill Maher Blog

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Climate Audit

by Steve McIntyre

New Historical Express

(Formerly Hatful of History)

Science Matters

Reading between the lines, and underneath the hype.

Uneasy Money

Commentary on monetary policy in the spirit of R. G. Hawtrey

The Market Monetarist

Markets Matter, Money Matters...

Truth on the Market

Scholarly commentary on law, economics, and more

Organizations and Markets

Economics of organizations, strategy, entrepreneurship, innovation, and more

John Quiggin

Commentary on Australian and world events from a socialist and democratic viewpoint

The Antiplanner

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Pedestrian Observations

For Walkability and Good Transit, and Against Boondoggles and Pollution

Bet On It

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Trade Diversion

Commentary on development, globalization, and trade by Jonathan Dingel.

Movie Nation

Roger Moore's film criticism, against the grain since 1984.

Weapons and Warfare

History and Hardware of Warfare

fportier.wordpress.com/

Franck Portier's professional page

NZCPR Site

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Anti-Dismal

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Bowalley Road

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

History of Sorts

WORLD WAR II, EIGHTIES, MUSIC, HISTORY, HOLOCAUST

Tudor Chronicles

News, reviews and talk all about the Tudors

Karl du Fresne

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Roger Pielke Jr.

an undisciplined academic - @RogerPielkeJr on Twitter

Great Books Guy

Reading The Classics

@STILLTish. Gender Abolition

Examining Gender Identity ideology and its impact on Women's Sex based rights and Gay Rights. Exploring how this has taken such firm root in Western societies (Cognitive & Regulatory Capture).

200-Proof Liberals

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

What Paul Gregory is Writing About

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Offsetting Behaviour

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

JONATHAN TURLEY

Res ipsa loquitur - The thing itself speaks

Conversable Economist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Barrie Saunders

Thoughts on public policy and the media

The Victorian Commons

Researching the House of Commons, 1832-1868

Coyote Blog

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The History of Parliament

Blogging on parliament, politics and people, from the History of Parliament

Books & Boots

reflections on books and art

Legal History Miscellany

Posts on the History of Law, Crime, and Justice

Sex, Drugs and Economics

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

FREEcology

Libertarian environmentalism

Doc's Books

A window into Doc Freiberger's library

%d bloggers like this: