Collective Cut

This is an archived version of the PW Sources newsletter from Saturday, April 15. Sign up to receive PW Sources directly to your inbox here.


In 1990, the United Nations Security Council, led by the US, imposed a broad swathe of sanctions on Iraq in response the country’s attack on Kuwait. Most of the sanctions remained in place when the US launched a ground invasion of Iraq in 2003. 

In her 2012 book, JOY GORDON examines the economic effects of the sanctions. 

From the text:

“The comprehensive sanctions imposed by the Security Council crippled Iraq’s entire economy. According to 1990 testimony before Congress, the sanctions eliminated 90 percent of Iraq’s imports and 97 percent of its exports. As a result, per capita income went from $3,510 in 1989 to $450 in 1996. In 1989 Iraq’s GDP was $66.2 billion; in 1996 it was $10.8 billion. Lost income and productivity for the period from 1990 to 1995 was estimated at $265.3 billion. Before the Gulf War, Iraq’s annual oil sales were more than $10 billion, representing 61 percent of the GDP. After the war, Iraq could generate only $800 million per year from smuggling small quantities to Turkey and Jordan, liquidation of hidden assets, and government gold reserves. The situation for individuals mirrored that of the Iraqi economy as a whole: even when goods were available, few people had enough income to buy them. This was due in large measure to the collapse in purchasing power of the Iraqi dinar, which depreciated by over 5,000 percent.”

+  “During 14 months in office, the Anglo–American government of occupation, the Coalition Provisional Authority (CPA), spent over $20 billion in Iraqi oil revenue, most of which was disbursed to US corporations.” By Dave Whyte. Link. And Yousef K. Baker finds that the CPA passed legislation to to privatize large parts of the Iraqi state. Link

+  Zeinab Shuker on Iraq’s declining wetlands and growing oil dependency, from MERIP’s new special issue on the invasion. Link and link

+  In a PW essay from last year, Simon Hinrichsen examines the politics of Iraqi debt restructuring after the US invasion. Link


Public transport in South Africa

LUCAS CONWELL is a PhD student in economics at Yale University. In his job market paper, he analyzes the privatized provision of public transport in Cape Town.

From the abstract

“Workers in low- and middle-income countries waste significant time commuting, partly due to gaps in public transit. In many African cities, privately-operated minibuses provide 50–100% of urban transit, at the cost of long wait times and poor personal safety for riders. Which externalities does the private provision of transit generate, and can policy interventions improve the market allocation? I build a microfounded modelofprivatized shared transit subject to externalities in matching between buses and passengers, security provision, and road congestion. I then estimate the model with newly-collected data on minibus operations in Cape Town and stated user preferences for exogenously-varied commute attributes. I find that an optimal subsidy on minibus entry corrects matching externalities and particularly benefits low-skill workers on long routes. Government actions to improve security bring even more substantial welfare gains.”

+  Phenomenal World is seeking applications for a full-time Publishing and Operations Associate associate, with fluency in Spanish or Portuguese strongly preferred. Please share widely! See details on how to apply here

+  “I take the black box as my primary point of departure—examining the intricate workings of financial stability through market microstructures underlying financial flows.” New on PW, Elham Saeidinezhad on the infrastructure of the financial system. Link. Stay tuned for more pieces from Saeidinezhad examining different facets of market microstructure. 

+  “The so-called ‘social market economy’ was a concession made by the CDU to the popular movements which had forcefully repudiated Erhard’s market fundamentalism.” In a new contribution to PW’s series on the price level, Uwe Fuhrmann challenges the founding myth of modern Germany. Link

+  JFI’s affiliate initiative, the Center for Active Stewardship, has launched a newsletter about shareholder proposals at public companies, which have become a venue for activists to challenge the private sector on climate change. Sign up for weekly updates. Link

+  Two on the Russia sanctions. Katrina Nothrop on how China circumvents sanctions to sell microchips to Russia. James K. Galbraith on the effect the sanctions are having in Russia. Link and link

+  Joshua Craze on South Sudan’s war economy in the 21st century. Link.

+  “The ways in which welfare states distribute benefits, and credit regimes provide access to credit, affect how individuals address social risks and, as a consequence, shape patterns of indebtedness.” By Andreas Wiedemann. Link

+  Lee Harris on the rise of climate rating agencies. Link

+  Cavit Baran, Eric Chyn, and Bryan A. Stuart on the great migration and educational opportunity. Link.

+  “Beginning in the sixth and seventh centuries BCE, the relations of production and the patriarchal family form of the early modern Mediterranean world contributed to the near-universal homosexuality of its men. Although many archaeologists now date specialized craft production for trade to the middle and late Bronze Age, there is little doubt that the discovery of iron transformed craft production. This form of labor, based on apprenticeship and relations of dependency, persisted long into the development of industrial capitalism. Craftsmen and servants of one kind or another made up the majority of the working population of cities during the early modern period. Historians are in agreement that nearly 20 percent of the population lived in conditions of extreme poverty. Guilds and apprenticeships created demographic patterns of late marriage. The mode of production was, in this way, directly responsible for pederasty.” By Christopher Chitty. Link

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations:

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