To Monet, Giverny


At the World Economic Forum in Davos, Colombia’s new Minister of Mines and Energy, Irene Vélez Torres, announced that the country’s government would not approve any new oil and gas exploration projects. 

In a 2021 chapter, DERMOT O’CONNOR and JUAN PABLO  BOHÓRQUEZ MONTOYA examine the privatization of Colombia’s energy sector in the 1990s. 

From the chapter:

“In 2003, after more than fifty years of operations as a state-owned oil producer and refiner albeit one that relied heavily on partnerships with British, American, and Canadian firms for exploration, transportation, and marketing—Ecopetrol was restructured and re-established as a publicly traded corporation (although the state initially held 100 per cent of its shares). This was done in order to rationalize operations and enhance competitiveness internationally. After restructuring, Ecopetrol doubled production from 399,000 barrels of crude oil per day in 2007 to 755,400 barrels per day in 2014. Following price depressions in the oil sector in recent years, Ecopetrol has focused on sustaining operations, exploring for new deposits, and seeking international investors. In the petroleum industry, foreign direct investment in Colombia went from US$135 million in 1994 to US$5.4 billion in 2012. In the mining sector (including coal), foreign direct investment in 1994 was US$638 million, but it went up to US$3.01 billion by 2009. 

The implications for Colombian citizens living within resource extraction zones have been profound and violent: large-scale land grabs and megaprojects have entailed the forced displacement of millions of rural people. In addition to violence and human rights violations, displaced persons have lost more than seven million hectares of property.”

Link to the text.

+  “These positive trends for Colombia’s oil sector have occurred during periods of intensifying civil war violence in Colombia.” David Maher on political violence and Foreign Direct Investment in Colombia’s petroleum industry. Link. And a 2017 article by Bruce M. Bagley and Jonathan D. Rosen examines energy security and environmental sustainability. Link

+  “The Colombian government provided at least 5,610 billion pesos (around USD 1.7 billion) in subsidies to fossil fuel production and consumption in 2019, with around 60% of these directed to petroleum.” A 2022 report by Angela Picciariello, Adriana Quevedo, and Ipek Gençsü. Link

+  Stefano Tijerina looks at oil extraction in Colombia from 1918 to 1938, focusing on the Canadian subsidiary Tropical Oil. Link


Race and the US Housing Market

BRIAN HIGGINS is a PhD candidate in economics at Stanford University. In a recent paper, he studies long-term trends in racial segmentation in the US housing market.

From the paper: 

“This paper quantifies the welfare consequences of racial segmentation in the housing market from 1960 to 2019. Using microdata on housing choices—what house to rent, what house to buy, and whether to buy or rent—I document large differences between Black and White households. I estimate a dynamic equilibrium model of the housing market, allowing for market segmentation by race, and use the model to map the differences in housing choices into differences in economic welfare. The main finding of the paper is that Black households pay higher quality-adjusted rents and prices, especially at higher qualities, which cause them to sort into lower quality homes. Relative to an integrated market, where Black and White households face the same rents and prices, the average Black household in 1960 is five percent worse off in terms of lifetime consumption equivalent welfare. The average White household is slightly better off (one half of a percent). Between 1960 and 2019, the welfare gaps have narrowed by four–fifths.”

Link to the text, link to Higgins’s website.  

+ + +

+   “In the opaque, patrimonial, and bureaucratic Georgian state, the dollar was used as a primary means of payment—serving the interests of rent-seeking political, economic, and financial elites.” New on PW, Ia Eradze on dollarization in Georgia. Link

+   “Electrification, automation, and digitalization are together likely to increase efficiency and reduce costs of road freight. This is in many ways a positive development but could have unintended consequences.” A new report from the Stockholm Environment Institute on the transformation in road freight. Link

+   Jayati Ghosh, Naomi Hossain, Ahilan Kadirgamar, Farooq Tariq, and Chamila Thushari discuss debt restructuring processes in Bangladesh, Pakistan, and Sri Lanka. Link

+   Eliot Chen appraises the future prospects of Chinese chipmaking giant Hua Hong Semiconductor. Link.

+   “By impeding the government from extending special financing arrangements to other firms in the area, sanctions precluded the adoption of policy decisions that could have stabilized production at pre-sanctions levels.” A look at US sanctions on Venezuelan oil, by Francisco Rodrí­guez. Link

+   A new report from the Fiscal Policy Report suggests that housing costs, rather than taxes, are driving migration out of New York City. Link.

+   Daniel K. Fetter, Lee M. Lockwood, and Paul Mohnen on the long-run intergenerational effects of social security. Link

+   “In this article, I explore the conflicting beliefs of two groups of fashion professionals during the interwar years: one group held that fashion design should be protected, while the other maintained that everyone should have access to fashion designs and be allowed to copy them. In France, the creation of a system protective of fashion designs was founded on the principle that fashion was a branch of high art, whereas, in the U.S., fashion was perceived in functional terms, and thus its designs were not protected. Under French law, fashion creators were held in the same high regard reserved for artists, while American law assigned them a lower status.” By Véronique Pouillard. Link

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