Category Archive: Sources

  1. The Finding of Moses

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    GOVERNMENT EFFICIENCY

    The slew of President Trump’s new executive orders include a temporary federal hiring freeze, the revoking of DEI-related directives, and the end of remote work for all federal employees (intended, according to Elon Musk, to provoke a welcome ‘wave of voluntary terminations’). Trump also plans to move 100,000 government jobs out of Washington by relocating government agencies to other states.

    In a 2015 chapter, CHESTER A. NEWLAND traces the federal government’s budget and workforce trends from the New Deal Era to the Obama years:

    “In 1962, the federal workforce stood at 5.3 million, climbing to 6.6 million by 1969, which reflected the military build-up in Vietnam. At the height of the US troop build-up in Vietnam in 1969, there were 3.6 million uniformed military personnel, accounting for almost 55 percent of total federal employment. Since then, the federal workforce has been trending downward although there has been modest growth in civilian employment in some years, including the 2004–2012 period. In a report on the latest uptick in federal employment, the Government Accountability Office (GAO) noted: ‘While the federal civilian workforce grew in size from 2004 to 2012, most of the growth was concentrated in three federal agencies and was driven by the need to address some of the nation’s pressing priorities.’ These agencies were Departments of Defense, Homeland Security, and Veterans Affairs.

    It is important to note that the federal government now spends more on contractors than it does on employees. While federal employment outside these three departments has been relatively flat, the number of workers paid as contractors and subcontractors has grown sharply, on a scale never before seen. In fiscal year 2011, for example, the Department of Defense spent $184 billion on contract employees and all other agencies spent $126 billion on contractors, for a total of $310 billion. In contrast, total payments to federal civilian employees (excluding the Postal Service), including salaries and benefits, was about $240 billion that same year (Schwellenbach 2014).”

    +  “Incoming senior Trump administration officials this month also had questioned some career civil servants about who they voted for in the 2024 election, their political contributions and whether they have made social media posts that could be considered incriminating by Trump’s team.” Zeke Miller and Aamer Madhani on the White House sidelining 160 NSC staffers. Link.

    +  See the National Academy of Public Administration’s 2024 playbook for improving federal agency organizational health. Link. “Not only is working in DEI sufficient grounds for dismissal, but failure to rat out such scoundrels is grounds for dismissal, too.” By Harold Meyerson. Link.

    +  “Presidents have long used executive orders to reduce the size of the federal workforce. Trump’s order is consequential but not particularly unusual.” By Nick Bednar. Link. “What proponents of government efficiency, broadly speaking, fail to elaborate on is this central truth—all efficient systems fail, be they biological, physical, economic, or social.” By Samuel Workman. Link.

    NEW RESEARCHERS

    Debt financing

    TIANYI WU is pursuing a PhD in public policy at the Blavatnik School of Government, University of Oxford, and is a pre-doctoral Research Fellow at the Boston University Global Development Policy Center. In a recent working paper, coauthored by Yunnan Chen, she examines Chinese commercial creditors’ intensfying overseas lending in Africa.

    From the paper:

    “The diversification of Chinese creditors raises questions over the underlying motivations: specifically, why African nations are accepting, and Chinese entities are offering, less favorable and more expensive credit arrangements. One potential explanation is that, by diversifying the sources of credit, China may be seeking to spread potential financial exposure across a broader spectrum of lenders, thereby reducing the concentration of risk in any single institution or project. This diversification may reflect an increasing market-oriented rationale among various Chinese financiers. Policy banks, having accumulated substantial balance sheets over the years, have become increasingly cautious in their lending practices. In contrast, commercial creditors, as later entrants to the market, are actively seeking new opportunities for expansion. The dynamics illustrate divergent strategic orientations within China’s financial landscape, where policy banks, with their substantial balance sheets, increasingly focus on risk management, while commercial creditors, as newer market entrants, actively pursue growth in less explored markets.”

    + + + 

    +  “Manley realized that even though countries like Jamaica had gained constitutional independence, they remained wedded to a world economy structured by colonialism.” New, Will Kendall and Neil Warner interview Professor Anthony Bogues on the occasion of Michael Manley’s centenary. Link. 

    +  “By weakening unions, the 2017 changes to Brazilian labor law have had the effect of relaxing health and safety standards for workers, reducing inspections of employers, and making it more difficult for workers to access Brazil’s Labor Court.” New on PW, Andréia Galvão on Brazil’s 2017 labor reform and the changing stakes in the trade union movement. Available in EN and PT.

    +  In January 2025 Phenomenal World officially launched its Chinese column as part of Chartbook’s Chinese edition. In collaboration with Qing Wang and Adam Tooze, Phenomenal World articles will be translated for a Chinese-speaking audience. See more at Chartbook China or WeChat. Link, link.

    +  “We estimate a 1.5 percentage point increase in homeownership, a 19 point increase in credit score, a $756 increase in auto debt, and a 1.9 percentage point reduction in credit utilization, among other outcomes.” See a new research paper on student debt cancellation from JFI’s Higher Education Finance team, and see Marketwatch’s in-depth coverage of its findings. Link.

    +  See articles by Juan Diego Quesada and Forrest Hylton on the emerging conflict between the ELN and the FARC in north-east Colombia, which has displaced thousands and sparked tensions between President Petro and President Maduro. Link, link. And read Jerónimo Ríos Sierra’s analysis of Petro’s peace negotiations from last February, available in English and Spanish. 

    +  “While some bloat is to be expected with any massive government undertaking, such public-private initiatives also serve to hollow out the state. Government is underwriting its future incapacity. And middlemen breed middlemen.” Brent Cebul on the technocratic success and political defeat of Biden’s green initiatives. Link. 

    +  Katie J. Wells and Funda Ustek Spilda on on-demand nursing companies and the rise of personalized pay. Link.

    +  “In the fight against inflation, there are real alternatives to relying on monetary policy alone. Governments can step up and protect citizens against cost shocks in times of disasters, bolstering not only the economy but also the ruling party’s chances at the ballot box.” By Isabella Weber. Link.

    +  “While Kojève is often cast as the intellectual puppeteer of the plan, his role was less that of mastermind than of opportunistic dramatist, weaponizing a concept whose origins lay not in Paris, but in the meticulous work of German delegates in the preparatory committees of the EEC going back to the late 1950s. At a critical juncture, Kojève planted an article in the New York Herald Tribune, framing écrêtement as the French response to American proposals. At the time, the idea had no official backing, but the article forced it onto the agenda. ‘Is this French policy?’ Rodney Grey, an incredulous Canadian delegate, asked Kojève after reading the paper in May 1963. ‘No,’ he replied, ‘but it will be.’ This theatrical move exemplified Kojève’s knack for shifting the terrain of debate at opportune moments. Washington refused to budge on écrêtement…From that point onward, it became untenable for the US representatives to deny the glaring asymmetry between American tariffs on certain industrial goods and the comparatively modest levies of the Common Market. Kojève’s tactics propelled these disparities to the forefront of the Kennedy Round negotiations.” By Danilo Scholz. Link.

  2. Interrupt my ulyssesness

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    FIRES

    With the evacuation of over 150,000 residents and the leveling of some of the most expensive real estate in the country, the LA wildfires are forecasted to be the most financially devastating in US history. As insurance covers rental costs for some of the displaced, a bidding war has begun in LA’s already competitive rental market.

    Filling a gap between risk scholarship and critical urban and geographical theory, a 2014 book by KEVIN FOX GOTHAM and MIRIAM GREENBERG looks to post-9/11 Manhattan and New Orleans after Hurricane Katrina to develop a theory of what they term “crisis-driven urbanization.”

    “New York City secured an enormous package of recovery and redevelopment funds and also the sweeping deregulation in how these funds were to be distributed. ‘Flexibility’ changes won for Lower Manhattan fundamentally transformed the federal Community Development Block Grant (CDBG) and Private Activity Bond (PAB) programs from which the funds were derived, the original intent of which was to prioritize rebuilding in sites of greatest public benefit and to target aid to those who were lowest-income and hence most in need. Following 9/11, all provisions regarding ‘public benefits,’ ‘means-testing,’ and ‘public oversight’ were waived. These sweeping waivers were then used as a precedent in the deregulation of aid for the entire Gulf Coast region following Katrina. The Gulf Opportunity (GO) Zone was modeled on the Liberty Zone for spatially targeted PAB tax relief, and the Louisiana Recovery Agency (LRA) became a conduit for CDBGs just as the Wall Street-backed Lower Manhattan Development Corporation (LMDC) did before it. Despite all of the differences—in the scale of the destruction, demographics of victims, and so on—few questioned whether a business-friendly tax, bond, and grant package designed for Lower Manhattan could be retrofitted for this vast, low-income region.”

    +  See Susan Cutter and Christina Finch’s research on changes in vulnerability to natural hazards throughout the US. Link. And see Kathleen Tierney on the consequences of disaster framing and the myth of public panic. Link.

    +  “‘The big question now is what’s going to happen to rents, and this is, to me, the 800-pound gorilla in the room.'” By Caleigh Wells. Link. “Over the last few years a handful of state lawmakers have proposed sharp limits on whether and how homes can be built in high risk areas. None have become law.” By Ben Christopher. Link. 

    +  “If edge suburbs and backcountry subdivisions, in fact, could be fire-proofed, then why not add more? Since 1993, almost half of California’s new homes have been built in fire hazard areas.” Mike Davis’s frequently recalled 1998 essay, “The Case for Letting Malibu Burn.” Link. 

    NEW RESEARCHERS

    Discrimination

    TARYN EAMES is an economics PhD candidate at the University of Toronto. Her job market paper, “Taryn versus Taryn (she/her) versus Taryn (they/them),” conducts a resume experiment on pronoun disclosure in hiring.

    From the paper:

    “From May to October 2023, 3,985 matched pairs of resumes were sent in response to job postings in 15 occupations across six cities in the United States. As described in the pre-analysis plan registered with the American Economic Association prior to data collection, occupations were selected to vary in the percentage of workers that are female and in how much customer interaction is required; each was categorized as either female-dominated, male-dominated, or non-dominated and as requiring either high, medium, or low customer facing interaction. Cities were selected in pairs within states to vary in their political partisanship; each was categorized as Republican or Democratic. Using a resume audit study design, a pair of resumes was constructed for each job posting by randomizing across characteristics including education, work experience, and listed skills. As in McGonagill (2023), the randomized characteristic of interest in this study is pronouns listed below the name. Further, unlike in McGonagill (2023), this study leverages two distinct treatments: nonbinary pronouns (“they/them,” signaling the applicant is nonbinary and disclosing pronouns) and binary pronouns congruent with sex implied by name (“he/him” or “she/her,” signaling the applicant is cisgender and disclosing pronouns). In each resume pair, one was randomly assigned treatment pronouns and the other had no pronouns listed.”

    + + + 

    +  “Nineteenth century struggles over railway regulations pose a clear lesson—a successful redistributive industrial policy depends on the mobilisation of political coalitions with a stake in its proposals.” New on PW, Noam Maggor on the legacy of agrarian coalitions and freight rate regulation in the midwestern United States. Link.

    +  “If the US is serious about mineral supply, it has better places to flex its diplomatic muscle. The Democratic Republic of Congo is, by far, the most important one. Also Chile, Peru, Brazil and Mongolia. Kazakhstan goes into the list too. Sadly, none of them is for sale. But neither is Greenland.” By Javier Blas. Link. And see JFI’s research on transition-critical minerals. Link.

    +  From Al Jazeera, see the details of the agreed upon ceasefire in Gaza. Link. Israeli strikes have ramped up since the announcement of a ceasefire ahead of its scheduled implementation on Sunday, killing eighty six people and wounding 200. Link, link. See AP’s profiling of the key negotiators in the ceasefire deal. Link.

    +  “Historically, about one in ten financial advisers in the United States has been involved in misconduct, including criminal or regulatory violations, terminations following allegations, or customer disputes resolved in the client’s favor.” By Mark Egan, Gregor Matvos, and Amit Seru. Link.

    +  “The decline in the proportion of unpaid women workers is almost completely explained by the increase in self-employment, including both those serving as unpaid helpers in family enterprises and those working for remuneration on their own account.” Jayati Ghosh on underlying realities in India’s labor market statistics. Link.

    +  See Julie Greene on the Isthmian Historical Society’s 1963 competition for testimonials from non-US employees involved in the construction of the Panama Canal. Link.

    +  See Moira Birss and MacKenzie Marcelin on the case for a public model for home insurance. Link.

    +  “Insurance litigation developed along interesting lines. Lawyers for the companies drafted stiff clauses to protect company interests; yet courts and juries often found ways to stretch the language of insurance policies to allow a widow to collect life insurance, or to help a man whose house or store burned down, despite some flaw or doubt. It has been suggested that company lawyers performed an “overservice” for their clients. Their clauses, strict beyond the general norms of fairness, “exaggerating warranties to the point where they were almost one hundred percent protection against claims,” were partially responsible for a “public atmosphere” against the companies; and for decisions and laws that disfavored enterprise, putting them in a position “worse…than…any other contracting party.” By Lawrence M. Friedman. Link.

  3. The Unentitled Graces

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    ALGORITHMIC RENTAL PRICING

    This Tuesday, expanding upon an antitrust lawsuit filed in August against the company Realpage, the Department of Justice sued six of the largest landlords in the US, with ten states’ Attorney Generals acting as co-plaintiffs. Realpage offers its customers a rental price-setting algorithm for efficient property management, which has provoked allegations of cartel-like behavior among landlords. 

    A 2020 paper by EMILIO CALVANO, GIACOMO CALZOLARI, VINCENZO DENICOLÒ, and SERGIO PASTORELLO considers the potential consequences of algorithmic pricing on antitrust policy:

    “Today, the prevalent approach to tacit collusion is relatively lenient, in part because tacit collusion among human decision-makers is regarded as extremely difficult to achieve. While we have no direct comparative evidence for algorithms relative to humans, our results suggest that algorithmic collusion might not be that improbable. If this is so, then the advent of algorithmic pricing could well heighten the risk that tolerant antitrust policy will produce too many false negatives.

    On the other hand, algorithmic pricing may open the way to new forms of antitrust intervention. When they suspect collusive conduct, agencies and the courts can subpoena and test pricing algorithms in environments that closely replicate the particular industry under investigation. With humans this was not possible, so the risk of aggressive antitrust enforcement producing too many false positives may be reduced. Therefore, the advent of AI pricing could alter the balance between the two types of error, possibly calling for policy adjustment.”

    +  Martin Spann et al. provide an extensive review of algorithmic pricing literature. Link. And see Akil Vicks on San Francisco’s banning of revenue management software for rental housing and the housing crisis more broadly. Link.

    +  See Curbed’s coverage of algorithmic rental pricing from 2019 on. Link, link, link. And see Propublica’s investigations of Realpage. Link, link, link.

    +  “A non-software utilizing landlord will face higher demand when the software-utilizing landlords raise their rents, and find it optimal to raise their prices as well because demand is sufficiently concave (Calder-Wang and Kim, 2024).” From the White House’s CEA blog. Link. And see Sophie Calder-Wang and Gi Heung Kim on the impact of algorithmic pricing on multifamily rental markets. Link.

    NEW RESEARCHERS

    Teachers’ Unions

    MORGAN FOY is a PhD student in the Business and Public Policy group at UC-Berkeley, Haas School of Business. In his job market paper, he examines whether teachers’ unions affect student achievement in Wisconsin.

    From the paper:

    “I find limited evidence that decertification led to a significant change in the composition of the teaching workforce both on average and with respect to worker performance metrics. Teachers were not more likely to exit the district or the teaching profession. Instead, I find that teachers who stayed present across the pre- and post-decertification periods were more likely to improve in decertified districts relative to certified ones. This implies that the student achievement effects were due to a direct treatment effect of the union. Pinning down the precise mechanisms for these gains is challenging due to the limited range of outcomes in the administrative data. However, I find no evidence that there were changes to total district spending or that districts were more likely to implement pay-for-performance type schemes. Instead, the complementary survey evidence points to the idea that workers lost the ability to access union representation rights in issues with administration.”

    + + + 

    +  “Most IRA funds will flow to for-profit institutions equipped to take advantage of tax benefits, not publicly owned or non-profit entities. The mimosas may be bottomless but whether cooperative and public power will liberally imbibe is far from certain.” New on PW, Sandeep Vaheesan compares the New Deal’s electrification program with the Biden administration’s designs for financing the IRA. Link.

    +  Nicholas Bloom, Kyle Handley, André Kurmann, and Philip A. Luck revisit the reallocation of US jobs, geographically and in terms of job sector, due to the China shock. Link.

    +  “While enhancing American power, the petrodollar inflow also supercharged the financial sector. The inflow enabled the ‘financial sector to unleash itself,’ in the colorful phrase of one official.” By David Gibbs. Link.

    +  “Public-private fissuring—combined with labor-law doctrine—frustrates a central objective of labor law itself by depriving care workers of the ability to bargain with public entities that shape their wages and working conditions.” By Kyle Bigley. Link.

    +  Noah Gordon, Bentley Allan, Daniel Helmeci, and Jonas Goldman offer a supply chain resilience framework for US industrial strategy. Link.

    +  “The FTC found that the three largest PBMs—CVS Caremark, Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx—now manage nearly 80 percent of prescriptions filled in the United States.” By  Mike Ludwig. Link.

    +  “While the spirit of black consciousness was rising, the ANC and its underground were increasing their propaganda activities. During August 1970 leaflets telling people about armed struggle were distributed in all the major cities. The campaigning was so extensive and effective that it made the headlines of every major newspaper in South Africa, as well as receiving attention abroad. “ANC Shows Its Teeth Again—Bombs in Five Large Cities—State Threatened in Leaflet” were the front page headlines in the Afrikaans Die Transvaler of August 14.” By Bernard Makhosezwe Magubane. Link.

  4. The Solemn and Dignified Burial Befitting My Beloved for All Seasons

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    A YEAR IN REVIEW

    Over the past year, Phenomenal World has investigated the challenges facing the global green transition, the relationship between the monetary and real economies, mounting trade tensions, the politics of batteries in Hungary, American healthcare, the effects of sanctions, democracy and central banking, and the impacts of dramatic electoral contests in Argentina, India, Sri Lanka, Indonesia, the UK, and the US. In an effort to bring rigorous and illuminating research from around the globe to your screen, we also expanded our editorial team—PW now works from five countries and in three languages, publishing and translating original analysis across Portuguese, Spanish, and English. 

    If you’ve enjoyed reading, we ask that you forward this email to any colleagues and friends who might be interested. And please encourage them and others to subscribe to this newsletter, PW Sources, and to publication alerts for our Spanish and Portuguese editions. 

    We will be off until 2025, when we’ll return with updates on new projects and much more research and writing. Until then, here is a roundup of some of our favorite series, essays, and newsletters from 2024. Thank you for reading.

    PHENOMENAL WORLD

    +  New from recent weeks: Juvaria Jafri on austerity and authoritarianism in Pakistan. Link. Jack Gross and Dylan Saba interview with Elham Fakhro on the Abraham Accords. Link. And for the Polycrisis, Lara Merling and Kate Mackenzie anticipate the global effects of new trade measures during Trump’s second term. Link.

    +  This year, PW launched both Spanish- and Portuguese-language editions, with an inaugural event in São Paulo in April featuring Brazilian Minister of Finance Fernando Haddad, historian Adam Tooze, and economists Julia Torracca, Clara Brenck, and Pedro Marques. Some Brazil-focused highlights from the publishing that followed in Portuguese (and English): Fernando Rugitsky on the soy-meat complex and the green transition, Lena Lavinas and Bruno Mader on the financial inclusion agenda under Lula 3, and Nicole Herscovici on Brazil’s business lobby. In Spanish (and English), read Renato Rivera Rhon on Ecuador in the global drug trafficking chain, Victor Mijares on state-owned oil company Petróleos de Venezuela, and Sandra Jaramillo on dependency theory in Colombia. We’ve looked closely at climate politics, conducted interviews with leaders of trade unions representing workers in Petrobras and Ecopetrol, examined Milei’s policies in Argentina, and probed the future of industrial policy in the region. 

    +  In July, we began a new interview series on the geopolitics of Israel’s genocide in Gaza, probing international law, the politics of aid, the state of the West Bank, the Lebanon-Israeli war and more. In August, Tim Barker and Dylan Saba interviewed former US Department of Defense attorney Sarah Harrison: “That pause on 2,000 pound bombs is the only time in the war that the Biden Administration has publicly used its considerable leverage… This underscored an obvious fact, which is that when you use your leverage you can change the trajectory of a conflict. This President has refused to do that.” Link.

    +  Arguing that planning has always been intrinsic to market functions, Sanjukta Paul wrote a detailed account of the First New Deal: “If planning and coordination are understood as intrinsic to markets, then we should probably not seek to understand specific pricing problems, nor conditions of chronic instability, as symptoms of either a special or general breakdown of the ideal market mechanism. Rather, since avoiding these outcomes is generally what planning, or economic coordination mechanisms, seek to do, we might look to see if and why those particular mechanisms may have broken down.” Link. 

    +  In September, Andrew Yamakawa Elrod carefully recounted the journey from Biden’s Build Back Better agenda to the suite of measures that have come to be known as Bidenomics: “Having shed its more social democratic, public services-oriented skin, the corporate claims on the national treasury now made their sleek advance. Quarterly lobbying expenditures from electronics manufacturing and equipment makers increased 28 percent over the course of 2021, to $52.3 million by Q4 2021. As 2022 began, electronics and equipment manufacturers were ready to seize from the 117th Congress what its gridlock was refusing to the constituencies of hospital patients, healthcare workers, retirees, students, teachers, and parents: government spending.” Link.

    +  During election season, Aida Hozic wrote about Florida’s FIRE economy and “anti-woke” politics: “The state has emerged ahead of the rest in offering a new vision of capitalist society—one that, at the state level, can serve either a second Trump administration or launch a vision of defiant independence following a second Trump defeat.” Link. For more reflections on US politics before and after the November election, see Gabriel Winant on the care economy and healthcare, and Tim Barker and Andrew Elrod’s interview with Thomas Ferguson. Link, link.

    +  Finally, our shared project with the great Kate Mackenzie and Tim Sahay, The Polycrisis, continued in its second year to track the dramatic geoeconomic shifts of our climate changed world. This year, their The Polycrisis newsletter has covered topics such as the global dollar system, the US trade war with China, social unrest in Kenya and Bangladesh, and the gap between current political coalitions and the internationalist cooperation required to decarbonize and develop the globe.

    PW SOURCES

    Our Saturday newsletter brought recommended research and reading to you on a wide range of topics. Here are some favorite archived letters.

    +  In May, the FTC banned Pioneer CEO Scott Sheffield from the Exxon-Pioneer merger on the grounds of collusion. To understand the context for the decision, we turned to a 2020 paper by Binlei Gong on the shale revolution and its global impact: “Marketization and commercialization are the keys to a significant breakthrough in the shale gas boom in the United States. In the United States, there is no mutual restraint among natural gas production, transportation, and sales activities. Thousands of companies are active in the shale gas industry, thereby ensuring the diversification of shale gas exploration and production entities. In many developing countries, however, state-owned oil companies or municipal engineering companies have monopoly power over natural gas supply infrastructure and have no motivation to innovate new technologies.” Link to the newsletter, link to the chapter.

    +  As student protests demanding divestment from Israel swept across US university campuses, we spotlighted Charlie Eaton’s article on US higher education’s growing reliance on financial investment returns: “Endowments play an increasing role in financing US higher education. Since the 1980s, more institutions have sought to build endowments and thereby assume the role of financial investors. NACUBO reports show that just 148 undergraduate-enrolling systems reported operating endowments to NACUBO in 1977 and just 36 of them were public. By 2009, the number of public systems reporting endowments had grown to 158, with an increase to 501 for undergraduate-enrolling systems overall.” Link to the newsletter, link to the article. 

    +  In April, following the victory of Prabowo in Indonesia’s 2024 election, we spotlighted Yasuyuki Matsumoto’s 2007 report on how speculative finance made Indonesia particularly vulnerable during the 1998 East Asian financial crisis: “A number of studies link debt accumulation by the private sector to the liberalization policies that were actively pursued in East Asia’s crisis-affected countries in the 1980s and 1990s. In particular, the private sector’s external debt problem is viewed as a result of capital account liberalization. Indonesia undertook a dramatic deregulation of its financial sector in the 1980s and by the 1990s had one of the most liberalized financial markets in the world.” Link to the newsletter, link to the report. 

    +  With Israel’s extremist Minister of Finance Bezalel Smotrich imposing continued sanctions on the West Bank in 2024, we spotlighted Tariq Dana’s 2024 chapter explaining how Israel’s control of the Palestinian Authority’s tax revenue has been implemented as a form of indirect rule after Oslo: “The economic dependency on Israel meant the continuation of Israeli control over vital resources for the PA’s institutional sustainability. In this way, Israel managed to subjugate the PA to heavy pressure to accept its demands. A prominent example is Israel’s control of the PA ‘tax clearance system,’ which is levied and transferred to the PA by Israel on a monthly basis. As the tax transfer accounts for more than 60 percent of all the PA revenues, Israel often uses this financial leverage to extract political concessions through withholding these amounts to force the PA to comply with its policies.” Link to the newsletter, link to the text. 

  5. Mutiny in the Garden

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    JAWLAN/GOLAN

    With the fall of the Assadist regime, the IDF has expanded its operations past the demilitarized border between the illegally occupied Golan Heights and Syria. 95 percent of the Golan’s Syrian Arab population were ethnically cleansed from the area when Israel established control in 1967, and the remaining Jawlani community lives under settler-colonial rule.

    In a 2018 essay, MICHAEL MASON and MUNA DAJANI examine the impacts of, and responses to, the misrecognition of Arab residents enacted by the Israeli state in the occupied Golan Heights:

    “With their decision in 1981 to annex the Golan Heights, including its Syrian Arab communities, Israeli policymakers envisioned citizenship as a tool to normalise the status of the territory and its inhabitants. As the indigenous population was predominantly Druze, Israel systematically pushed for the recognition of this ethnogeographic community as non-Arab, adopting the same policy of “Druzeness” employed for the Druze who lived in Palestine until 1948, who then became Israeli citizens. From its declaration of independence, Israel promulgated a distinctive Druze identity as a non-Jewish minority separate from any pan-Arab imagining; for example, designing tailored educational curricula and enforcing army conscription for the Israeli Druze. These moves mirrored, albeit more successfully, the political efforts employed by the French in their Syrian mandate (1923–1943) to separate the Druze from the wider Arab population; though Druze historiography, even in Israel, has challenged the notion that the Druze are non-Arab. Furthermore, the Druze citizens of Israel retain socio-ethnic ties with fellow Druze in Lebanon and Syria: all face citizenship duties and other domestic obligations which sometimes clash with their ethno-communal loyalties and practices, for example, restrictions on cross-border travel and the customary usage of natural resources. Ongoing regional insecurity—notably a contested Israel–Lebanon border and the Syrian war—intensifies the political consequences of identity claims for Druze national minorities, none more so than the Druze in the occupied Golan Heights subject to pressures from the Israeli government to relinquish their Syrian identity.”

    +  “After the events of the Syrian revolution intensified, the colonial state invested heavily in the societal rupture and the identity crises forcing the local population into integrating in the ‘Israeli community’ and colonial projects.” By Ali Aweidat. Link. And see an online open curriculum to learn and teach about the Jawlan prepared under the BZU-LSE collaboration project, Mapping Memories of Resistance, available in English and Arabic. Link.

    +  “Israel’s occupation of the Golan Heights is also important for the country’s water security. Rainwater draining from the Golan is a crucial water source for Israel’s largest freshwater reservoir, the Sea of Galilee.” Link. And see Elaine C. Hagopian for more on how the Golan Heights serves as a crucial water resource for Israel. Link.

    +  See Majdal Shams-born writer Aram Abu Saleh recount her own experiences as well as those of fellow Syrians during the resistance movement waged by Syrian inmates in the Israeli occupation’s prisons. Link. And from Chatham House, listen to Haid Haid, Gideon Rachman, and Rana Rahimpour on the collapse of Bashar-al Assad’s regime in Syria and what it means for the wider region. Link.

    NEW RESEARCHERS

    Employer-Sponsored Health Insurance

    JESSICA MIN is a PhD candidate in Economics at Princeton University. In her job market paper, she examines the effect of insurance mergers on the overall cost increase to employer-sponsored health insurance.

    From the paper:

    “Employer-sponsored health insurance (ESHI) costs in the U.S. have increased fourfold since the 1980s, accounting for 10 percent of the average firm’s labor costs in 2019.1 Given that these costs are workplace-financed, a natural question arises: how has the striking increase in ESHI costs impacted U.S. firms and workers? By raising labor costs, an increase in ESHI costs might depress wages and employment. And because firms pay a fixed cost toward each worker’s health plan regardless of income—incurring the same cost for a low-paid janitor as for a highly-paid executive—lower-income workers may be disproportionately affected. One potential contributor to rising ESHI costs is consolidation in the private health insurance industry. At the same time as ESHI costs have steadily increased, insurer mergers have likely led to less competitive and more concentrated markets. These trends may be causally linked, as reduced competition could drive up health insurance premiums by strengthening the bargaining leverage of insurers during negotiations with firms”

    + + + 

    +  “The agreements with Israel are deeply unpopular. They are only made possible because popular representation is absent. Normalization could not have happened except through repression, and this has only continued post October 7.” New on PW’s Gaza series, Dylan Saba and Jack Gross interview Elham Fakhro on the Abraham Accords. Link.

    +  “We see that the wealth effect that resulted from the Fed’s quantitative easing policies, especially after 2020, had a major political implication. The enormous boom in financial and housing wealth accrues principally to the top income brackets.” Also new on PW, Tim Barker and Andrew Elrod interview Thomas Ferguson on campaign financing and the 2024 US election outcome. Link.

    +  See ASA Monitor Editor-in-Chief Steve Shafer’s response to a recent Vox article’s defense of the insurance industry’s cost control policies. Link. And see Eric Levitz’s Vox article in question. Link. 

    +  “I have steered clear of talking about crypto as a ‘systemic risk’ in the past because it has been so relatively small, and so disconnected from the rest of the financial system. But that is changing.” By Jemima Kelly. Link.

    +  A ProPublica investigation reveals United Healthcare and Optum’s practices in denying coverage for behavioral health care, dropping providers, and limiting children’s access to ABA treatment. Link. And see another ProPublica report on billionaire financiers’ avoidance of paying Medicare taxes. Link.

    +  “The use of computer code to set prices on such staples as rent and groceries is adding a new and intricate layer to the larger battle inside the federal government to rein in high costs.” By Justin Wise. Link. And see a working paper by Martin Spann et al. on the economic and social consequences of algorithmic pricing. Link.

    +  “For fiscal year 2023, Pakistan’s total external liabilities swelled to $131 billion. Debt payment consumes as much as 75 percent of federal taxes, with predictions that it could reach 100 percent by 2025.” By Zohra Ahmed. Link.

    +  “Fashion professionals created the Chambre as a trade and employer association to maintain and promote the emerging French couture business’ activities. By 1911, the reformed Chambre began to represent specifically the Parisian cluster’s interests, becoming the only agency regulating and preserving the high fashion field. As such, it also played a key role in establishing and legitimizing Paris’ international fashion leadership. In the 1930s, public authorities’ official recognition of the Chambre allowed it to expand its role and address effectively the impact of the financial crisis. After World War II, the Chambre lobbied the public authorities for financial and legislative aid to support haute couture’s declining business. In keeping with its corporatist logic, it operated in its members’ common interests until the 1960s. This logic provided the Chambre’s organizational actors with collective sense-making by balancing their creativity and exclusivity with market and business concerns.” By Elisabetta Merlo and Valeria Pinchera. Link.

  6. Internal Thorns

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    CRITICAL MINERALS

    Minerals such as iron, copper, and lithium, essential for decarbonizing energy systems, produce volatile revenue streams for countries dependent on their export. In Chile, which exports a third of the world’s copper, price volatility is mitigated by means of strict constraints on fiscal spending.

    In her recent book, LILIANA DOGANOVA considers the efforts of José Piñera Echenique, the Chilean minister of mining under Pinochet, to promote a private investment-driven sector without privatizing the state-owned corporation Codelco:

    “The question, in Piñera’s view, was not whether the state company Codelco, which owned the large Chilean mines since their nationalization, should be privatized. Privatization would have set off a ‘holy war.’ What was needed was ‘considerably more practical and concrete.’ At that time, Codelco produced 85 percent of Chile’s copper. Between 1980 and 1996, the share produced by publicly owned companies shrank from 84 percent to 39 percent of output while that produced by privately owned companies rose from 6 percent to 54 percent. Judging by these numbers, the effects of Piñera’s legislation resembled those of privatization, but the ‘considerably more practical and concrete’ strategy through which they were achieved was different: it sought to ‘open the way for private production of copper (and other minerals) to grow to the point where it predominated, through a legislation which would encourage the discovery of new deposits and the expansion of existing ones, thereby creating new wealth.'”

    +  A new interactive transition-critical metals map from JFI details the value capture of transition-critical minerals by country, and an accompanying report considers the challenges of coordinating diversified economic partnerships between the US and developing countries. Link. An IFSWF examines how sovereign wealth funds are financing an equitable energy transition in developing markets. Link. And a recent FAS report considers how the Department of Energy can aid in the acceleration of US domestically-produced critical minerals. Link.

    +  “Halting exports of critical minerals can backfire. After China temporarily halted exports to Japan in 2010, the Japanese government helped a company in Australia develop a large rare earth metals mine as an alternative supplier.” By David Pierson, Keith Bradsher, and Ana Swanson. Link. And in PW, see Jojo Nem Singh on Europe’s critical raw materials strategy. Link. 

    +  A Global Business Report article celebrates the 2023 amendments to Chilean mining law, the first major update to Chile’s mining regulatory framework since 1983. Link. And see a Reuters report on Codelco’s flagging production in 2024, and the potential for the state-owned mining corporation to be overtaken by BHP. Link.

    NEW RESEARCHERS

    Program Evaluations

    MICHELLE RAO is a PhD candidate in Economics at the London School of Economics. In her thesis, she uses a novel dataset of 128 program evaluations in the context of cash transfers in Latin America and the Caribbean, and maps them onto corresponding policy spending. She finds “a robust zero relationship between research results and spending,” except when evaluations are attributable to a political party in power.

    From the paper:

    “Program evaluations are increasingly common in policy settings, with governments and international institutions playing an active role in advocating for, funding, and conducting evaluations (Levine and Savedoff, 2015, Independent Evaluation Group, 2012, USAID, 2016). However, there is limited evidence on the empirical relationship between the results of these evaluations and key policy decisions. In providing causal estimates of impact, program evaluations can—in theory—have a direct impact on policy decisions such as policy spending, program design, and program adoption (Duflo and Banerjee, 2011). Yet, the applicability of evidence to policy decisions can also be constrained by features of the political environment, or of the evidence-base itself (e.g. Allcott, 2015, Rosenzweig and Udry, 2020). Understanding the relationship between evidence and policy is a fundamental step to maximising the policy impact of research.”

    +++

    +  On December 12, join the Jain Family Institute for an interdisciplinary panel which will center the countries that produce the minerals required to decarbonize energy systems. Moderated by BloombergNEF’s Ellie Gomes-Callus, panelists will discuss approaches and resources that may help producer countries utilize mineral-revenue windfalls to move up the value chain. Registration can be accessed here.

    +  “In a hostile international environment, the regime has viewed oil and PDVSA as means for survival.” New on PW, Víctor Mijares on PDVSA, sanctions, and Venezuela’s dependence on oil. Link.

    +  “Today, the American business class’s record of partisanship could best be described as incoherent.” Also new on PW, Alex Browne on business elites and the 2024 US election. Link. 

    +  “German elites could have capitalized on the shock to rebalance their growth strategy. But the opposite happened: the government’s adjustment strategy has aimed at doubling down on export-led growth and protecting the core export industries.” By Donato Di Carlo, Anke Hassel, and Martin Höpner. Link.

    +  Gustavo Cortes and Cameron LaPoint create a new hand-collected database spanning a century of monthly building permit quantities and valuations for all US states and the sixty largest MSAs to address the question of whether the housing market leads the financial cycle. Link.

    +  Considering barriers to marginalized groups’ participation in technological innovation, Claire Brunel and Megan Stewart examine women’s labor force participation in the context of World War II in the US, and find that women’s increased participation in the workforce is associated with a rise in the number of inventors filing patents, but those patents are primarily owned by men. Link.

    +  “Voter discontent about inflation is hardly a new phenomenon. Already in the 1970s, inflation was high on the agenda in election campaigns in many countries.” By Jonathan Federle, Cathrin Mohr, and Moritz Schularick. Link.

    +  “Prior research suggests that Walmart Supercenters exert substantial power over the low-wage labor market, though the consequences of Supercenter openings on household incomes and public finances are less clear.” Link.

    +  “The sophist is an entrepreneur who offers the empty surfaces of coherently articulated speech to anyone who wishes to be concealed behind them. The real attraction of the linguistic commodities offered for sale by the sophist is represented less by their logically valid surfaces than by the dark space behind those surfaces, where customers can settle in comfortably. Listeners are encouraged to appropriate the obscure core of sophistical speech in order to fill it with their own concerns. In other words, speech that hides its paradoxical structure becomes a commodity that invites penetration into its paradoxical interior. But all speech that is presented as logically valid is sophistical.” By Boris Groys. Link.

  7. Blue Madonna

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    ELITE SCHOOLS

    While many US schools adopted test-optional admissions policies during the Covid-19 pandemic, several Ivy League colleges such as Yale, MIT, Brown, Dartmouth, and Georgetown are again requiring standardized test submissions in their application process. 

    A new NBER paper by Ran Abramitzky, Jennifer K. Kowalski, Santiago Pérez, and Joseph Price assembles the largest extant dataset of the long-run socioeconomic composition of students at elite schools in the US in order to examine the effects of two major policy changes, standardized testing and the G.I. Bill:

    “We find no evidence that the G.I. Bill increased the representation of lower- and middle-income students at elite colleges. We also find no evidence that the introduction of standardized testing persistently increased the representation of lower- and middle-income at elite colleges. The limited effects of these two policies suggest that increasing the representation of lower-income students in elite colleges may require earlier or more targeted interventions. This persistence of the underrepresentation of lower income students at elite institutions is particularly striking given the large changes that have occurred in higher education over the last century. Our findings reveal that there is substantial continuity in the economic origins of students at elite colleges and that such persistence has in general been difficult to alter. The one important exception to this continuity is the relative decline in the proportion of students from the top 20 percent following WWII and its subsequent reversal since the 1980s.”

    +  See Sandra Black, Jeffrey Denning, and Jesse Rothstein on Texas’s Top Ten Percent policy for diversifying attendance to public flagships. Link. And see the UT system announcement this week offering free tuition to qualifying Texan families. Link. In PW, see Aida Hozic on Florida’s public education model. Link.

    +  “Something profoundly altered higher education around 1890 so that almost all of today’s noteworthy US universities and colleges were founded before 1900.” By Claudia Goldin and Lawrence F. Katz. Link. See Caroline Hoxby on the rising selectivity of Ivy League schools, as distance from home factors less into the preference of prospective students. Link.

    +  “Public educational assistance has tilted away from youth from low-income
    families toward the most meritorious and highly qualified youth, and therefore toward those from middle- and higher-income families.” By Robert Haveman and Timothy Smeeding. Link. “Students at selective colleges have higher graduation rates than similarly qualified students at less selective colleges.” By Anthony P. Carnevale and Stephen J. Rose. Link.

    NEW RESEARCHERS

    Bolsa Familia

    GABRIEL LEITE MARIANTE is an Economics PhD Candidate at the London School of Economics. In his job market paper, he exploits data regarding Bolsa Familia, the world’s largest cash transfer program by number of recipients, and finds that cash transfers increase women’s labor force participation, particularly when complementary public goods are available.

    From the paper:

    “In this paper, I take advantage of the institutional setting of Brazil’s Bolsa Familia, a national programme with a large unconditional component, that is designed and implemented in identical fashion across the entire country. This feature allows me to isolate the role of local context in shaping regional variation in the effect on employment of men and women. Using plausibly exogenous variation in benefit receipt generated by a policy reform that increases benefit coverage, I find that, on average across the country, the benefit increases formal employment of women by 1.1pp (7.6%), but has no effect on men. The positive effect on women is highest for mothers, particularly those with children of pre-school age, who increase their propensity to spend money on children’s education, resulting in increased school enrollment and freeing up of time previously dedicated to care work.”

    +++

    +  “If renewed inflation, driven by geopolitical events or climate-driven disruption, interacts with tight labor markets to induce wage and price pressure, Labour’s plans will be derailed.” New on PW, Jo Michell on Labour’s stewardship over economic stagnation in the UK. Link.

    +  A new Peterson Institute policy brief by Kimberly A. Clausing and Mary E. Lovely examines the regressive nature of tariff policies under Trump and Biden, with consequences for US revenues, consumers, and households. Link.

    +  An October research paper from Chatham House assesses challenges to Azerbaijan’s  credibility in hosting the COP29 summit, and makes recommendations for how the country can use its leadership to engage oil and gas producers. Link.

    +  A recent report by Melissa Mahoney and the Institute for Women’s Policy Research examines the economic and workforce impact of restrictive abortion laws since the 2022 Supreme Court decision to overturn Roe v. Wade. Link.

    +  “Our results indicate that austerity measures (defined as negative shocks larger than 3 percent of the GDP) have a detrimental effect on GDP of about 5.5 percent even after 15 years.” By Guilherme Klein Martins. Link.

    +  “No serious body of research has been produced that provides a clear justification for a 2–3 percent inflation target as the central goal of macroeconomic policy.” By Robert Pollin and Hanae Bouazza. Link.

    +  See the G20 Rio de Janeiro Leaders’ Declaration. Link. And see Mariana Mazzucato and Vera Songwe, co-chairs of the Group of Experts to the G20’s TF-CLIMA, on the recommendations contained in their final report. Link.

    +  “Dogmatic socialists, religious fanatics, ‘pious’ superstitious fetishists (this already covers the crusaders)—but also tourist ‘paradises’ (the most exploited commonplace in international advertising!)—are kindred phenomena in anthropological terms. And it is not surprising that even aesthetic objectivizations (kitsch, to be precise) of this ‘blocked’ seduction of the infinite resemble one another. The Jordan water that the crusaders took home is not very different from Berlin Spreewasser (not to mention tins of ‘Berlin Air’!).” By Ludwig Giesz. Link.

  8. Islands

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    INDONESIA

    As the world’s largest exporter of coal, Indonesia has outlined its commitment to transitioning away from fossil fuels and reducing greenhouse emissions under the Just Energy Transition Partnership (JETP). With 30,000 workers in the coal sector potentially facing layoffs from 2020 to 2040, the transition necessitates extensive investment to re-train employees currently in the coal sector.

    An August working paper from the Institute for Economic and Social Research at Universitas Indonesia quantitatively projects the impacts of transitioning the Indonesian power sector from 2020 to 2050:

    “Indonesia faces a huge task of ensuring its workers are ready to fulfil the demands of green jobs, but avenues of opportunities remain open. Despite the skill requirement issue promoted by Vona et al. (2015) and Consoli et al. (2015), Bowen et al. (2018) argued that the majority of green jobs bear similar tasks to non-green ones and thus enable affordable and manageable up-skilling and re-skilling. Many skills in both types of jobs are rudimentary and generally applicable in different sectors, such as welding and regular desk work. Given their similarities and marginal differences, on-the-job training would suffice in preparing workers for green jobs. This means workers would only need additional hours of training and supervision instead of an academic qualification. Hence, although most Indonesian workers do not have a high school diploma or higher, on-the-job training should be able to help the Indonesian workforce qualify for green jobs.”

    +  “Indonesia now produces around half of the world’s nickel supply. Coal consumption in Indonesia increased 33 percent from 2021 to 2022, in large part from nickel smelting, making the transition to net zero that much harder.” By Anna McNulty. Link. And in PW, see Alvin Camba on how banning the export of raw nickel ore became a centerpiece of Indonesia’s industrial policy. Link.

    +  See the New Climate Institute’s estimate of the investment needed to ensure re-training programs for Indonesia’s coal workers. Link. “Layoffs are not limited to Indonesian coal workers as they affect coal workers worldwide. An average of 100 coal miners globally could potentially face unemployment each day by 2035.” By Faisal Maliki Baskoro. Link.

    +  See the Global Energy Monitor’s November update to their 2023 report on emerging captive coal power, in which they find a 15 percent increase in Indonesia’s coal power capacity since last year. Link. And see the Rocky Mountain Institute on how overcapacity and pre-existing coal contracts produce under-utilization in Indonesia’s electricity grid and impede the green transition. Link.

    NEW RESEARCHERS

    Instrumental Variables

    PEDRO PICHETTI is a PhD Candidate at INSPER Institute of Education and Research in Brazil. In his job market paper, he critiques the instrumental variables method employing cross-sectional data or panel data, prevalent in econometrics literature.

    From the abstract:

    “The instrumental variables (IV) method has been widely studied in cross-sectional settings. However, many practical applications involve panel data, in settings where a unit’s treatment status may turn on or off over time. I show that in the presence of dynamic treatment effects, i.e., if past treatments affect current potential outcomes, standard methods are no longer valid if the instruments are serially correlated. This paper shows the nonparametric identification of dynamic causal effects in a potential outcomes framework in which potential outcomes depend on the treatment path taken by a unit through time but the first stage is static, in the sense that at each period the IV only instruments its contemporary treatment. I provide a nonparametric estimator that is consistent over the randomization distribution and derive its finite-population limiting distribution as the sample size increases. Monte Carlo Simulations illustrate the desirable finite-sample properties of the estimators. An application of the estimator shows that law enforcement curbs illegal deforestation until two years after the actual detection of illegal practice, but effects fade out afterwards.”

    +++

    +  “While Israel’s campaign to undermine UNRWA is decades-long, it appears that the ‘terrorist’ designation might be the act that ultimately collapses the agency.” New on PW, Jack Gross and Dylan Saba interview Lisa Bhungalia on UNRWA and the politics of aid in Palestine. Link. 

    +  “Our scenario analysis shows that US repeal of the IRA would, in the most likely scenario, harm US manufacturing and trade and create up to $80 billion in investment opportunities for other countries, including major US competitors like China.” By Bentley Allan and Tim Sahay. Link.

    +  See an Al-Shabaka roundtable on what implications the US presidential elections hold for the Palestinian struggle, popular organizing in the US, and American foreign diplomacy. Link.

    +  See two recent papers by Isabella Weber and several co-authors, one examining windfall profits in the oil sector during the 2022 oil and gas crisis, the other analyzing the earnings call transcripts of over 4,000 stock-market listed US corporations: “Firms expect their competitors to increase prices while the shock lasts and hence feel safe to do the same. Companies expect windfalls when costs eventually come down, since they do not lower prices symmetrically.” Link, link.

    +  “Donald Trump is not George McGovern. The attempt to portray him as foreign to the body politic failed, because there is nothing remotely un-American about him.” By Tim Barker. Link.

    +  See Diana Reddy on how the 2021–2024 National Labor Relations Board took innovative steps to challenge what legal scholars have dubbed the “ossification” of labor law. Link.

    +  See Linda W. Chang, Erika L. Kirgios, Sendhil Mullainathan, and Katherine L. Milkman’s critique of “quantitative fixation,” whereby over-reliance on numeric metrics can distort comparative decision making in hiring, donation, and policy decisions. Link.

    +  “Workers experience what we call a class ceiling: parties are much less likely to promote them upward on the political career ladder conditional on their observable qualifications.” By Olle Folke and Johanna Rickne. Link.

    +  “SWIFT is still the dominant system for inter-bank cross-border payments messages. It was launched in 1977 as a non-profit cooperative owned by its member banks, and headquartered in Brussels. It is thus firmly in the private sector and invites only constrained oversight by central banks despite its importance to the architecture of globalisation. In its first years, SWIFT’s physical infrastructure comprised a group of computing centres in key financial capitals (consolidator hubs) in Western Europe and New York, linked to member banks through local terminals. SWIFT leased capacity from national Postal, Telephone, Telegraph systems to provide an infrastructure to send instructions and messages from member banks’ terminals to the consolidator hubs and back out to correspondent banks to adjust their accounts in response to customer orders. A key aspect was standardisation of bank names and amounts, which reduced the time required to key in these details. Settlement still took place by adjustment of bilateral correspondent accounts and there was no netting of payments; SWIFT merely increased the efficiency of instructions between banks.” By Catherine R. Schenk. Link.

  9. Dissolve

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    STARLINK

    A letter signed by over 100 researchers and released in October urges the FCC to place a pause on the deployment of SpaceX’s Starlink satellites, citing environmental concerns over some projections that the company may launch 58,000 additional satellites into low orbit by 2030. Launched in 2015 by Elon Musk, the high-speed space internet project Starlink has become key in the United States’ strategic planning for space. The FCC currently exempts all telecommunication projects from facing formal environmental review.

    A 2024 paper by YAN JIAJIE and YU NANPING—originally published in the Journal of International Security Studies (国际安全研究) and republished by the Center for Strategic and International Studies’s new translation project—examines the proliferation of Starlink satellites over the past decade:

    “In 2015, Space Exploration Technologies Corp. (SpaceX) launched a high-speed space internet project called Starlink, which has become a key step in the implementation of the United States’ strategic planning for space in the new era. As a product of the new technological revolution, the US Starlink project has many advanced technology advantages and a broad application market and commercial space. Its goal is to establish a global satellite internet communication system dominated by US technology, and it will have significant impacts and effects on existing global 5G communication technology and future space-based internet systems. At present, the project has already carried out in-depth cooperation with the US military and frequently launched satellites, aggressively seizing near-Earth orbit space spectrum resources. If the project is successfully implemented, not only will there be a problem of outer space resources being forcefully expropriated by US technology, but it will also have a great impact on the low-orbit satellite internet production chain and other technology industry value chains. Starlink’s impact on astronomical observation activities and disaster prevention may also be international in nature. The new threats that Starlink’s commercial operations pose to the information security, data security, and military security of other countries are real and unavoidable.”

    +  “The military utility of low earth orbit satellites has become increasingly apparent to China’s leaders. They have seen in the Ukraine war how Starlink technology has provided decisive advantages on the battlefield.” By Steven Feldstein. Link. And see Tom Phillips and and Dan Milmo on Starlink’s almost complete dominance of the Amazon’s satellite internet market. Link.

    +  “Not only should private companies be subject to the procedures of an international licensing system for outer space, but royalties can be paid to the licensing system so other countries can still benefit from space resources.” By Yuree Nam. Link. And see a 2024 schematic overview of national regulatory frameworks for space activities, as well as a compendium of international space debris mitigation standards. Link, link.

    +  “Although SpaceX has won multibillion-dollar contracts under Biden, it has also sparred with a multitude of federal and state authorities.” By Alex Rogers, Stephen Morris, and Kana Inagaki. Link. And see reporting on how past government efficiency commissions may inform Elon Musk’s potential spearheading of such a commission under Trump. Link, link.

    NEW RESEARCHERS

    Baby Boom

    HENRY DOWNES is a PhD candidate in the Economics Department at the University of Notre Dame. In a 2024 paper, he uses evidence from the enactment of the 1935 National Labor Relations Act to estimate the place level effect of union growth on fertility outcomes, and finds that unionization can account for approximately 20 percent of overall fertility increases during the Baby Boom.

    From the paper:

    “At the same that unions were making historic gains in the years following the passage of the National Labor Relatins Act, American families were getting bigger. After decades of declining fertility, birth rates grew by more than 50 percent during the mid-20th century. This “Baby Boom” was a demographic event unlike any other in modern American history, with economic and social aftershocks that are still felt today. Officially, the U.S. Baby Boom is dated as occurring between 1946 and 1964 (Colby and Ortman, 2014). This convention reflects the commonly held belief that fertility increases resulted from the end of World War II and the subsequent postwar economic expansion. While postwar changes in fertility are an important part of the Baby Boom story, they do not tell the full story. In fact, birth rates began to increase in the late 1930s and continued to climb throughout the war. The US Baby Boom was also unusually large and long lasting. Today, the fundamental causes of the Baby Boom remain “one of the 20th century’s great puzzles” (Bailey and Collins, 2011).”

    +++

    +  “In each of the 11 countries we study, we found that a majority of politicians belong to a latent class that we call “democratic realism”—a thin, minimalist, relatively pessimistic view of voters’ capacities.” By Jack Lucas et al. Link. Also see Daniel Galvin and Chloe Thurston on the limits of policy feedback as a party-building tool. Link. See Ilyana Kuziemko, Nicolas Longuet-Marx, and Suresh Naidu on changes in the democratic party’s voter base. Link.

    +  “US plans for the IMEC (India Middle East-Europe Corridor) and I2U2 (a military partnership with Israel, India, and the UAE) are intended to bolster India as a competitor to China.” Laleh Khalili reviews The Contest for the Indian Ocean and the Making of a New World Order by Darshana M. Baruah. Link.

    +  “As president of the UN’s twenty-ninth flagship climate “Conference of the Parties” (COP29), to be hosted in Baku in November 2024, Azerbaijan will need to shepherd nearly 200 other governments towards common positions in highly contentious negotiations.” By Ruth Townend et al. Link.

    +  See an interview with Ahmed Kaballo, CEO of the popular pan-African social media platform, African Stream, which was banned from Instagram, Facebook, and YouTube after Anthony Blinken made unsubstantiated claims that the platform was run by the state-funded media outlet, Russia Today. Link.

    +  A new ILO working paper examines the impact of social protection benefits in reducing income inequality, with contributory pensions being identified as having the largest impact on reducing inequality. Link.

    +  “Uganda’s oil industry is steadily shaping up into a fully established economic sector. It is imperative that Uganda lays domestic foundations for resource governance, to navigate the challenges that come with oil extraction.” By Paddy Kinyera. Link.

    +  “We conjecture that the type of human capital in China through engineering and vocational education helped develop its manufacturing sector. Utilizing micro-survey data since the 1980s, we show that education expansion has been an inequality enhancer in India.” By Nitin Kumar Bharti and Li Yang. Link.

    +  “It is time to imagine a revitalized administrative state that recognizes accountability may also require—or demand—efforts to build countervailing power and administrative power while disciplining corporate power.” By Amy Kapczynski. Link.

    +  “The economist who first and most directly engaged a political and ideological battle against the workers’ discourse was Henry Charles Carey from Philadelphia. A former publisher who would become the most influential nineteenth-century US protectionist, Carey endeavored to disprove the vision of class fostered by workers. Carey’s stated goal was to counter the workers’ “errors” that were fueling “a warfare between producers and non-producers.” The first and most crucial error, in his perspective, was the journeymen’s restrictive definition of “productive labor” and of the “productive classes,” which they limited “to those who actually make something out of something tangible.” On the contrary, he argued, all those who participated to production in any form could be said to contribute to it, since there could be “productions and producers of many sorts,” creating something “more or less tangible, or drawn from intellectual objects.” A second related error, Carey continued, was the idea that only the so-called concrete “producers” could be considered essential to society. Instead, in his perspective, “every work whether manual, mental, or active” had to be considered “useful to society” and entitled “to a reward proportionate to the extent and durability of its utility,” as well as to the level of “skill” it involved.” By Matteo M. Rossi. Link.

  10. Two People

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    UNRWA

    On Monday, despite US threats to withhold military aid over the humanitarian crisis in Gaza, the Israeli Knesset passed two bills that together would, within ninety days, ban the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA) from operating within Israel’s sovereign territory and prevent state authorities from having any contact with the UN humanitarian aid organization. 

    Months before Oct.7, 2023, UNRWA already faced the possibility of closure due to donor fatigue and funding gaps. A September 2023 report from the International Crisis Group examines UNRWA’s budget crisis and warns of consequential instability in the region: 

    “Even if UNRWA is bailed out at the last moment, as has happened before and could indeed happen again in 2023, the perpetual state of crisis is untenable. It undermines staff morale, prompts salary strikes and reduces an international agency with a proud record of aiding Palestinian refugees to a miserable beggar for alms. It is also inefficient to run what amounts to a welfare state for three million people on a shoestring, as it militates against investing in infrastructure, digitisation, and other updating of outlay, eroding the quality of services. Worse, Palestinians fearing—rightly or not—an end to their status as refugees as a result of UNRWA’s collapse, or even a drastic cut in services, could foment new turmoil in the Israeli-occupied territories and destabilise Jordan and Lebanon.”

    +  See Jalal Al Husseini on how UNRWA has, since its establishment in 1949 as a temporary agency, navigated the conflicting expectations of donor states to emerge as a main stakeholder in the Palestinian refugee crisis. Link. And see the 2024 independent review of UNRWA’s adherence to the humanitarian principle of neutrality. Link.

    +  “The urgency to resolve underlying questions of justice and peace for Palestinians is somehow divorced from the challenge of providing for their human needs.” See Sari Hanafi on UNRWA’s faux-governance in Lebanon’s refugee camps. Link, link. And see UN Special Rapporteur Michael Fakhri’s report on the Palestinian people’s right to food sovereignty. Link.

    +  “The share of aid flow from private operators in Gaza has increased from 5 percent in April to about 60 percent in August and September, according to Israeli military data.” By Malaika Kanaaneh Tapper. Link. And see reporting on the new restrictions faced by Haaretz after the newspaper’s publisher, Amos Schocken, called for sanctions on Israel at a conference in London. Link, link, link.

    NEW RESEARCHERS

    Offshoring

    JIN LIU is a IES Postdoctoral Fellow at Princeton University. In a 2023 working paper, she examines the choices of multinational firms regarding offshoring, and finds that the impact of US trade policies adversely affect multinationals offshoring to China, with significant third-country effects.

    From the paper:

    “Multinational firms account for a large share of global production and innovation. These firms produce and innovate in various countries, choosing the optimal locations for each activity. Whether a firm should produce and innovate in the same host country or region turns on the size of their colocation benefits relative to the force separating them. This separating force arises from the fact that countries with low production costs are usually not countries with high returns to innovation (Arkolakis et al., 2018; Antras et al., 2017). In the data, the former force dominates, and firms tend to colocate production and innovation. As shown in Figure 1, large destinations of offshore production are often also large destinations of offshore innovation for U.S. firms. The colocation benefits are twofold. First, there is synergy between production and innovation as direct interactions reduce communication and coordination costs, spur new ideas, and increase innovation efficiencies. Second, having local production can reduce innovation costs.”

    +++

    +  “Ever since the disputed US Presidential election of 2000, when the Supreme Court halted an electoral recount in Florida and delivered victory to the Republican nominee George W. Bush, Florida has been on the trajectory toward one-party domination.” New on PW, Aida Hozić on Florida’s FIRE economy and the rise of the “anti-woke” American right. Link.

    +  “Home health care, long-term care, childcare, and even education are sectors characterized by huge labor costs, low wages, and poor working conditions. This manifests in unreliable and low-quality service.” Also new on PW, Andrew Elrod interviews Gabriel Winant on the care economy and the 2024 US elections. Link.

    +  “Recent shifts inflect globalization away from a growth promoting process in the global South towards a growth inhibiting process.” By Anastasia Nesvetailova and Herman Mark Schwartz. Link.

    +  Ben Casselman looks into whether wage increases have kept up with the cost of living post-pandemic, and constrasts cost of living to pre-pandemic trends. Link.

    +  Zachary Parolin, Rafael Pintro-Schmitt, Gøsta Esping-Andersen, and Peter Fallesen investigate differences in intergenerational poverty in the US, Australia, Denmark, Germany, and the UK using administrative- and survey-based panel datasets. Link.

    +  For Bloomberg’s Odd Lots podcast, Joe Weisenthal and Tracy Alloway talk to Rebecca Choong Wilkins and Gerard DiPippo about the “Made in China 2025” plan, and how China has emerged as a leader in EVs and solar despite an impedimental US. Link.

    +  “Whereas in 2014 roughly half of households bothered to respond to Britain’s labour force survey, these days the share is closer to one in five. This collapse has exposed figures to volatility and potential bias.” By Soumaya Keynes. Link.

    +  “The nature of ancient economies has been a topic of debate for decades. Disagreement and controversy have been encouraged by the scarcity of ancient economic data. Therefore, it was startling when Slotsky (1997) reported the existence of what appeared to be the longest extant series of ancient prices. This article analyzes these putative price series using time-series methods designed for the study of prices to divine their nature and reveal what they indicate about the economy of ancient Babylonia. The primary issue in the study of the ancient economy has been the extent of markets. Polanyi (1944) argued that ancient markets were limited in scope and peripheral to most economic activity. Others, following Rostovtzeff (1957), have argued that markets were important or even central to ancient economies. This debate has been known as the primitivist/modernist debate or as the Finley debate, following his famous Sather lectures (Finley, 1973). This debate takes place mostly in ancient history journals, but it also has appeared in economic history journals in articles by Silver (1983) and Greene (2000).” By Peter Temin. Link.