Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Rodrik’

New Firms for a New Era

Posted by hkarner - 14. Februar 2020

Date: 12‑02‑2020

Source: Project Syndicate by Dani Rodrik

Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy. 

In recent years, large corporations have become increasingly aware that they must be sensitive not only to the financial bottom line, but also to the social and environmental effects of their activities. But societies should not allow firms‘ owners and their agents to drive the discussion about reforming corporate governance.

CAMBRIDGE – Firms are the cornerstone of the modern economy. The bulk of production, investment, innovation, and job creation takes place within them. Their decisions determine not only economic performance, but also the health and wellbeing of a society. But who should govern firms, and on whose behalf should those decisions be made?

The conventional theory under which our contemporary economies operate is that firms are governed by – or on behalf of – investors. This theory posits a clear separation between owners and employees – between capital and labor. Investors own the firm and they must make all the relevant decisions. Even where this is impractical, as in larger firms with multiple investors, the presumption is that managers are “agents” of the investors – and of investors alone. Den Rest des Beitrags lesen »

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The Changing Face of Economics

Posted by hkarner - 11. Januar 2020

Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.

Economists necessarily lack evidence about alternative institutional arrangements that are distant from our current reality. The challenge is to remain true to empiricism without crowding out the imagination needed to envisage the inclusive and freedom-enhancing institutions of the future.

CAMBRIDGE – Responding to pressures from within and without, the economics profession is gradually changing for the better. Not surprisingly, the populist backlash sweeping advanced democracies in recent years has produced some soul searching in the discipline. After all, the austerity, free-trade deals, financial liberalization, and labor market deregulation that caused it rested on the ideas of economists.

But the transformation extends beyond economic-policy tenets. Within the discipline, there is finally a reckoning with the hierarchical practices and aggressive seminar culture that have produced an inhospitable environment for women and minorities. A 2019 survey carried out by the American Economic Association (AEA) revealed that nearly half of female economists felt discriminated against or treated unfairly on account of their gender. Nearly a third of non-white economists felt treated unfairly based on their racial or ethnic identity.These failings may be related. A profession that is less diverse and less open to different identities is more likely to exhibit groupthink and hubris. Den Rest des Beitrags lesen »

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Elizabeth Warren’s Trade Makeover

Posted by hkarner - 11. August 2019

Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.

Senator Elizabeth Warren’s plan is not inherently protectionist. But if it occasionally requires some degree of trade protection – to shield labor, local communities, the tax regime, or environmental rules – it would be because there is a domestic program worth protecting.

CAMBRIDGE – US Senator Elizabeth Warren’s new trade plan solidifies her credentials as the Democratic presidential candidate with the best policy ideas. United States trade policy has long been shaped by corporate and financial interests, enriching those groups while contributing to the erosion of middle-class earnings and undermining many local communities. Warren’s plan represents a radical reimagining of trade policy in the interests of society at large. 

As Warren points out, we live in a world where import tariffs are for the most part already quite low. Trade negotiators today spend most of their time arguing not about import taxes and other barriers at the border, but about behind-the-border regulations such as intellectual property rules, technical standards, industrial policies, and the like. Contemporary trade agreements seek “deep integration” rather than “shallow integration,” to use a distinction coined by my Harvard colleague Robert Lawrence.Deep integration can foster greater levels of international trade and investment, but it is also more intrusive on domestic social bargains. It places constraints on countries’ tax and regulatory policies, and on their ability to uphold their own social and labor standards. Den Rest des Beitrags lesen »

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What’s Driving Populism?

Posted by hkarner - 9. Juli 2019

Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.

If authoritarian populism is rooted in economics, then the appropriate remedy is a populism of another kind – targeting economic injustice and inclusion, but pluralist in its politics and not necessarily damaging to democracy. If it is rooted in culture and values, however, there are fewer options.

CAMBRIDGE – Is it culture or economics? That question frames much of the debate about contemporary populism. Are Donald Trump’s presidency, Brexit, and the rise of right-wing nativist political parties in continental Europe the consequence of a deepening rift in values between social conservatives and social liberals, with the former having thrown their support behind xenophobic, ethno-nationalist, authoritarian politicians? Or do they reflect many voters’ economic anxiety and insecurity, fueled by financial crises, austerity, and globalization?

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Globalization’s Wrong Turn

Posted by hkarner - 12. Juni 2019

Date: 11-06-2019
Source: Foreign Affairs By Dani Rodrik

And How It Hurt America

Globalization is in trouble. A populist backlash, personified by U.S. President Donald Trump, is in full swing. A simmering trade war between China and the United States could easily boil over. Countries across Europe are shutting their borders to immigrants. Even globalization’s biggest boosters now concede that it has produced lopsided benefits and that something will have to change.

Today’s woes have their roots in the 1990s, when policymakers set the world on its current, hyperglobalist path, requiring domestic economies to be put in the service of the world economy instead of the other way around. In trade, the transformation was signaled by the creation of the World Trade Organization, in 1995. The WTO not only made it harder for countries to shield themselves from international competition but also reached into policy areas that international trade rules had not previously touched: agriculture, services, intellectual property, industrial policy, and health and sanitary regulations. Even more ambitious regional trade deals, such as the North American Free Trade Agreement, took off around the same time.

In finance, the change was marked by a fundamental shift in governments’ attitudes away from managing capital flows and toward liberalization. Pushed by the United States and global organizations such as the International Monetary Fund and the Organization for Economic Cooperation and Development, countries freed up vast quantities of short-term finance to slosh across borders in search of higher returns. Den Rest des Beitrags lesen »

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The Good Jobs Challenge

Posted by hkarner - 8. Februar 2019

Dani Rodrik is Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.

Every economy in the world today is divided between an advanced segment, typically globally integrated, employing a minority of the labor force, and a low-productivity segment that absorbs the bulk of the workforce, often at low wages and under poor conditions. How should policymakers address this dualism?

CAMBRIDGE – Around the world today, the central challenge for achieving inclusive economic prosperity is the creation of sufficient numbers of “good jobs.” Without productive and dependable employment for the vast majority of a country’s workforce, economic growth either remains elusive, or its benefits end up concentrated among a tiny minority. The scarcity of good jobs also undermines trust in political elites, adding fuel to the authoritarian, nativist backlash affecting many countries today.

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China’s Boldest Experiment

Posted by hkarner - 12. Dezember 2018

Dani Rodrik is Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.

The conventional wisdom among social scientists is that the demands of advanced economies and growing middle classes can be met only through greater political freedoms and competition. By doubling down on authoritarian single-party rule, China is now testing that proposition.

BEIJING – Forty years ago this month, China’s leaders set the country on a path of reform that has produced the most dramatic economic transformation in history. Mao Zedong had died two years earlier, in 1976, and the newly rehabilitated Deng Xiaoping succeeded in stamping his vision of economic development and modernization on the Third Plenary Session of the Eleventh Central Committee held in December 1978. In the four decades since, China has transformed itself into an economic powerhouse, portending an equally momentous makeover of the global economy and geopolitics.

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The tension between globalisation and democracy

Posted by hkarner - 28. Oktober 2018

Date: 25-10-2018
Source: The Economist: Charlemagne

Italy’s conflict with Brussels reveals a European trilemma

In his novel “The Year 3000: A Dream”, from 1897, the Italian writer Paolo Mantegazza proved a deft oracle. Citizens of his imagined future enjoy air-conditioning, clean energy, credit cards and virtual-reality entertainment. A giant war in Europe has been followed by peace, the continent’s integration and a single currency. Yet here the author’s imagination overshoots today’s reality. His United States of Europe is a paragon of democratic federalism. Power and consent flow smoothly from “cosmopolitical” citizens to the level of government where they are most appropriately exercised. Subsidiarity reigns. “How easy and straightforward it is to govern”, comments the narrator, “when men, families and communes are self-governing.” The capital of Mantegazza’s united Europe is Rome. And nowhere quite sums up the gap between these lofty ideals and today’s fractured continent as well as Rome does.

On October 23rd, for the first time, the European Commission rejected a euro-zone member’s budget. Italy’s government, a coalition of the anti-establishment Five Star Movement and the right-populist League, has a mandate from voters to enact tax cuts and spending increases. Its proposals would push Italy’s deficit to 2.4% of gdp—above the level the eu considers appropriate for a country with such high debt, at around 130% of gdp. Technocratic rules agreed on in Brussels are thus in collision with a democratic national government. Supranational discipline is up against the will of the people. Mantegazza would be dismayed. Den Rest des Beitrags lesen »

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The Economic Costs of Erdoğan

Posted by hkarner - 27. August 2018

Dani Rodrik is Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.

For more than a decade, financial markets gave Recep Tayyip Erdoğan the benefit of the doubt and supplied the Turkish economy with easy credit. Such debt-fueled growth almost always ends badly, and now it has.

DURHAM/CAMBRIDGE – Turkey’s political model has long lost its luster, but a growing diplomatic crisis with the equally erratic administration of US President Donald Trump has now pushed the country’s economy into a full-fledged currency crisis. The Turkish lira has lost nearly half of its value over the last 12 months. And, because Turkish banks and firms have borrowed heavily in foreign currency, the lira’s freefall threatens to bring much of the private sector down with it.

President Recep Tayyip Erdoğan, having won the first election since Turkey’s formal change from a parliamentary to a presidential system in June, now governs the country autocratically. He relies on government ministers selected more for their loyalty (and family ties to him) than for their competence. Den Rest des Beitrags lesen »

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No to Academic Normalization of Trump

Posted by hkarner - 8. August 2018

Dani Rodrik is Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.

Those who have served the current US president are necessarily tainted by the experience. While they should not be barred from speaking at universities, they should be accorded none of the trappings of institutional esteem such as fellowships, named lectures, and keynote speeches.

CAMBRIDGE – The University of Virginia recently faced a storm of protest after its Miller Center of Public Affairs appointed President Donald Trump’s former Director of Legislative Affairs, Marc Short, to a one-year position as Senior Fellow. Two faculty members severed ties with the center, and a petition to reverse the decision has gathered nearly 4,000 signatures. A similar protest erupted at my home institution last year, when Corey Lewandowski, a one-time campaign manager for Trump, was appointed a fellow at Harvard’s Institute of Politics. Den Rest des Beitrags lesen »

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