Writing for the New York Times, Atul Gawande reports on

a program that instituted in nearly every intensive care unit in Michigan a simple five-step checklist designed to prevent certain hospital infections. It reminds doctors to make sure, for example, that before putting large intravenous lines into patients, they actually wash their hands and don a sterile gown and gloves.

... The results were stunning. ... the rate of bloodstream infections from these I.V. lines fell by two-thirds.

However, "the Office for Human Research Protections shut the program down" because the researchers had not followed the informed consent protocols required for experimenting on patients: changing a checklist may alter patient care as much as an experimental drug, and so should be subject to the same controls. Gawande concludes, "the authorities ... [are] in danger of putting ethics bureaucracy in the way of actual ethical medical care."

As a project manager and Master of Public Administration student, I'm sensitive to the accusation of bureaucracy. I went and looked it up, and it turns out that's it's always been pejorative. OED defines bureaucracy as "Government by bureaux; usually officialism", and defines bureau as

An office, esp. for the transaction of public business; a department of public administration. ... Hence bureauism, officialism, 'red-tape-ism'.

Gawande condemns the Office for Human Research Protections for following "a certain blinkered logic" to reach a "bizarre and dangerous" decision, which it then imposes broadly to the detriment of many. But it's basically just enforcing some rules about paperwork, albeit poorly. Isn't the checklist he lauds another set of rules about paperwork? It seems to me that either bureaucracy should be acknowledged as a neutral word, leading to good bureaucracy and bad bureaucracy, or, if bureaucracy is to maintain its pejorative status, a new word should be introduced for an office transacting public business in a positive fashion.

How strong is exam culture in Singapore? Our first semester grades were available online (or by SMS!) a few days ago. I found out because another student clued me in to look; a day or two after we got this alert by email:

The online exam results for Semester 1, 2007/2008 have just been released. Pls check the NUS Student Intranet for more updates [...]

As far as I know, these are the actual class grades, not just the final exam. The final exam made up between 30 and 50% of my grade for various classes. But in Negotiation and Conflict Management, the instructor successfully petitioned NUS (not the Lee Kuan Yew school, but the NUS mothership) to skip the exam, and there is a result for that class, so I'm pretty sure these are class grades, not exam results. But, presumably influenced by the historical practice of having exams be 100% of class grades, they are labeled on the web page as "NUS Graduate Examination Results". I'm happy to say I passed, with results good enough to maintain my scholarship. I didn't have any particular reason to worry, but apparently no matter how old you get, the wait for results can still get under your skin.

In order to maintain a PMP credential (Project Management Professional), you need sixty PDUs (Professional Development Units) per three-year period, which you can get by attending classes, writing articles, and various other means. While this gets warm bodies to show up for professional events, those warm bodies aren't necessarily eager.

In November I attended the Singapore Project Management Institute's annual Symposium, a one-day event taking up a few low-ceilinged, windowless rooms in the Suntec Convention Center. This was roughly as exciting as you would expect; as the keynote speaker said, "I know many of you want to attend just for the PDUs." I'll try to give you just the highlights in my notes.

• We started fifteen minutes late. Project Managers aren't any more organized than anybody else.
• There were over 300 people present; most were male and Asian, Chinese in particular. Of fourteen speakers, twelve were male.
• The keynote address was entitled "Project Management 2.0 and a Flat World". Ehhn.
• Idle thoughts during a presentation: there's a maxim that "you fall behind one day at a time". I wonder if that's really useful? Equally valid, it seems to me, would be "you fall behind a year at a time", which happens every time somebody drafts an unrealistic schedule.
• Gaah! IBM has seven levels of Project Manager, from Project Assisstant to Portfolio Manager.
• Do you have "T-shaped SSME" skills? "Every PM should have SSME skills in order that we are valuable employee for the new economy"
• A speaker, talking about consulting work for an Indonesian company, said that she couldn't give the key presentation herself as they needed to hear it from an ang moh.
• The merger of Chase Manhattan and Chemical Banks entailed 4000 projects for 58 units. The GANTT chart covered three walls of a conference room, and was used to prove to analysts that the merged entity would enjoy $1.5 billion in savings, which caused the stock price to go up. Not covered in the presentation: what savings actually materialized. (I'm too chicken! I should have asked)
• I have an entry in my notes for "MS Omega". I'm not sure if that's an actual software program from Microsoft, or a doomsday device.
• Lunch was excellent; any catered lunch that has a whole separate table for "Indian Vegetarian" has my love
• I did make an effort to talk to people. Everyone I talked to was there for PDUs to maintain their PMP, except for one person who works for a training company. I had lunch with a local telecom project manager, and never quite managed to understand what exactly he did. I also chatted with a Korean guy who works for a company that does telecom support for oil companies. He said he's done one trip to Nigeria, and it was very harrowing because the locals are cut out of the oil wealth and so target everyone associated with the oil companies.
• I am interested in doing some PMP training, not only for the $$ but also to help keep the material fresh in my own head, and also because, heck, teaching is something professionals in any field should do. However, that apparently will only be possible if Singapore changes the rules for student visas.

Overall, I didn't learn very much. I probably should have gotten my act together and proposed a presentation of my own, either on using Open Source (not very PM-specific) or how to incorporate Agile techniques without swallowing the full pitcher of Koolaid. Next year.

Here's the photo album. That's my balding head in the second and sixth pictures.

Classmate Tai Yan and his girlfriend were kind enough to take my sister and me out around Singapore Saturday. After he provided a list of fifteen possible destinations, we whittled it down to breakfast at a tasty and newly popular toast shop, a morning visit to Changi Beach, lunch at the Changi Beach food court, and an adventure to find Mount Pleasant Cemetery, which is essentially some nearly abandoned tombstones in the jungle. Then we all took a nap and then went out for dinner. Photos start here.

On the strength of Mr Brown's recommendation and the Youtube video, I saw Ling perform a free concert at the Esplanade, in a nice outdoor venue across a small inlet from a lovely little container port. The music was fun but quite amateur, mixing covers with originals. I have no musical talent, but I had the impression that the guitar player was sometimes straining to make it through tricky passages in the alloted number of beats, and that the drummer, who was fantastic, spent most of the set chasing after the other musicians as they wandered naively through the multiverse of possible speeds and timings and rhythms. More damaging was Ling's inexperience reading an audience: We sat down in a crowd that was at least 80% Tamil, on a day that was a major Muslim holiday (Eid al-Adha, called "Hari Raya Haji" in Singapore and commemorating "Ibrahim's (Abraham's) willingness to sacrifice his son, Isaac, under the order of Allah"), and the stage patter was about Christmas. I personally enjoyed the music selection, which was mostly Canadian woman singer-songwriters, but I'm not sure how much it spoke to the audience. There was certainly some talent and potential on display, and most of the problems should go away with practice and experience. Of special note was the amusing dissonance between the Singlish patter, available here, and the music.

The second act was "Two Guys, a Girl, and Amanda", which seemed like a quite capable bar band, which covered a number of catchy, terrible songs, followed by a selection of much better songs. All in all, a perfectly pleasant evening which, for better and worse, was more or less completely within my cultural reference area.

Today's seminar at the East Asian Institute: China's Success in Using Foreign Aid to Diplomatically Isolate Taiwan, by Prof. John Copper from Rhodes College. Text is my paraphrase of the speaker unless marked in quotes; hyperlinks are mine.

In the 70s and 80s China got out of the game (of foreign aid to diplomatically isolate Taiwan).

Definition of foreign aid for our purposes: Economic help for political and possible economic gain

Published amounts are misleading because many countries promise aid but don't deliver. Europeans frequently criticize the US for not giving much aid as a percentage of GDP, but the US provides market access that the EU doesn't and Japan doesn't, but China does.

Only 24 countries have diplomatic relations with Taiwan, none important. Total population of smallest ten is under one million people.

China's Taiwan policy: territory, regime. China still claims Taiwan, and claims that the Taiwanese regime is not legitimate.

In the spring of 1950, Mao was preparing to invade Taiwan. Troops got sick from a liver fluke in Fujian province, then the Korean war broke out, and then Truman changed his mind and sent the Seventh fleet to protect Taiwan. Later attacks in 1954 and 1958 but China backed down in the face of US protection of Taiwan (including nuclear artillery in 1958). Stalemate.

1969 border war with USSR; Nixon negotiated with Mao regarding Taiwan; contents of these negotiations remains unknown.

Deng Xiaoping hoped to solve the Taiwan problem as a side effect of growing China's economy, as Taiwan would seek to rejoin voluntarily.

In 1956, in an attempt to end its diplomatic isolation, China offered aid to Cambodia, then Nepal, Indonesia, Sri Lanka, middle east. Didn't do anything in Latin American, except very briefly Cuba. Grants, loans, project aid, 10, 20, up to 100+ million dollars. Big recipients: North Korea, North Vietnam, Albania, and a north African railroad.

Issue of China joining UN. Most countries, other than the communist bloc, kept ties with Taiwan. 1969 was a turning point. Albania proposed a resolution that PRC, not ROC, should have China's UN seat. Joel's note: here's Time magazine from 1971: "THAT annual rite of fall—the struggle over who should represent China in the United Nations—used to be fairly predictable. In past sessions, the drama has swirled around the so-called Albanian resolution, which offers the U.N.'s 127 members a simple choice: Taipei or Peking." Almost all countries China gave aid to voted for Beijing. Cambodia was one exception; Indonesia broke of relations with China after 1965 due to suspicion from Indonesian military.

Another few dozen countries recognized the PRC after this, about half of which received aid from China.

Aid from China dropped; Taiwan became the world's #1 country for foreign exchange and had the ability to compete with China in aid-giving.

Since 2000 and Taiwan's election of Chen Shuibian, more efforts to strip away Taiwanese friends. Foreign aid from a secret fund became a politicized issue in Taiwan. Chen's wife was indicted in 2006 for forging withdrawals from the secret fund for personal use. The prosecutor, a Chen supporter, said he refrained from indicting the president only because the crimes did not constitute treason. Chen may leave Taiwan before his term ends to avoid prosecution.

Macedonia went from China to Taiwan and back to China. Macedonian press Taiwan had promised between 1 and 1.6 billion (US dollars) of aid, which is much greater than Taiwan's total (public) aid budget. China offered aid and threatened to veto ongoing UN peacekeeping in Macedonia unless Macedonia switched to China.

China promised US$130 million to Nauru, which has 13,000 people. This angered Chen into saying that there were two entities, one on either side of the strait, which statement angered China. (Joel's note: Wikipedia says $60 million and mentions that Nauru went back to Taiwan in 2005.)

Chen had made a big deal of diplomacy and aid with other democracies, and so was embarrasses when Senegal, one of the most diplomatic countries in Africa, went to China. The premier of Taiwan was on a plane to Chad when Chad announced a switch to China.

Of Taiwan's remaining 24 friends, some are critical. Nicaragua is one. Panama is another. Chen Shuibian has been pushing the notion that Taiwanese are not Chinese, which is undermining Taiwan's position with overseas Chinese, including in Panama.

China's trade is skyrocketing in Latin America whereas Taiwan's is mostly flat.

Conclusion: China's won the diplomatic battle with Taiwan.

What's the effect if Taiwan's number goes down to 20, or 10? Unclear; Spain once had 2; Russia once had 2. What could China do next? It's clear that China absolutely doesn't want anybody else to control Taiwan, but finds the status quo acceptable for now.

Q: Would China reach a point of diminishing returns and stop even trying to reduce the number? Would it affect the Taiwanese regime's legitimacy? A: I don't think so.

Audience comments: It would matter in that Taiwan would find it much harder to file the UN applications that it uses to make noise. You can't find Taiwan in World Bank data. China doesn't want to overpay because then more countries would start switching back and forth.

A: Taiwan has informal, cultural diplomacy with many countries. China is insensitive to this as long as it isn't formal or implying statehood.

Q: If it comes to a crunch, should Singapore abandon Taiwan? Taiwan supported Singapore with FDI in the early days. (very long-winded details about consequences of Taiwanese independence and Korean opinions ultimately interrupted) Can China up the ante in this competition? A: Yes; but what's the hurry? On your Singapore question, it's the Singapore policy to oppose Taiwanese independence. But it doesn't matter. In my opinion, if Chen declared independence, Bush would call Hu Jintao and ask for 48 hours, and then overthrow the Taiwanese government. ("Is that on the record?" "It's my opinion")

Q missed it. A Much of China's aid is now money instead of labor. I think the US hasn't thought much about what to do about China's foreign assistance. US may support it as another way to promote development in poor countries. But US uses some Pacific islands for strategic reasons. Some criticism of China destabilizing the world market in oil and other commodities.

Discussion of race issues, who is really Chinese. Chinese colonizers of Taiwan taking local wives. Q: What about culture? A Taiwanese groups stir up these issues to win the election. If KMT wins, it will die down

Taiwanese foreign aid to a huge leap in 1989. But now many Taiwanese feel poor. Conflict between perception of decline in Taiwan and desire of Taiwanese not to feel isolated. Taiwanese consumer confidence is lowest in Asia; very low confidence in the government. KMT accusations that Chen ruined the Taiwanese economic miracle.

In a sense China is giving economic assistance to Taiwan by buying up agricultural products well above market price. Many Taiwanese companies do quite well in China.

Speculation about China's manipulation of Taiwan. Stock market manipulation.

Q: What about Vatican relations? Recent election of a bishop in China suggesting tacit approval of Chinese government. Will the Vatican dump Taiwan and recognize Beijing? A: yes, the Vatican would switch if these could reach an agreement with Beijing. Pope won't give up the right to select bishops in China. Point from audience: Vatican has apostolic representatives, not ambassador, and so could have both China and Taiwan. —I don't think China would tolerate that.

Q: Doesn't this aid competition benefit the small countries? Would foreign aid to these entities decline sharply if Taiwan and China merged?

Q: What is the Chinese population in Panama that could influence Panamanian opinion?

A: I'm not sure— there's enough to — they are a minority community and they have money to influence politics.

Discussion about identity and race in Taiwan. Many Taiwanese elite hold dual US/Taiwan citizenship. Promotion of Taiwanese language, which they acknowledge is impractical. It's not entirely rational. (Joel's note: At the Taiwanese birthday dinner I went to the other night, forty Taiwanese sang happy birthday in English, Mandarin, and Taiwanese.)

Q: In the US there are many undocumented workers, we often call them "illegals". The same situation exists in China. The labor flow may be very important in foreign aid issues. A: In the US, you are talking about 15% of the population (Joel's note: the most common number is 12 million, which is closer to 3% of US population); the number would be much smaller in China. Africans in China? I've never heard anybody say that. —I've seen Africans in Malaysia, students and people holding good jobs. —I've studied a report that there are over 200,000 illegal African workers in Guangzhou alone.

If I were to derive Singapore's laws regarding pedestrian/car interaction from observation, I would guess:

1. If a pedestrian is in a marked crosswalk, cars may charge at but not actually hit pedestrians.
2. Drivers may disregard all pedestrians on pavement outside of marked crosswalks. Pedestrians step on unmarked pavement at their own risk.
3. If a pedestrian is on a sidewalk and moving towards a road, drivers may honk to warn the pedestrian not to proceed.

I did some research, and found that I pretty much guessed correctly. The law says,

Crossings for pedestrians (referred to in this section as crossings) may be established on roads, or on subways constructed under roads, or on bridges constructed over roads, in accordance with this section." (Provision 121, Paragraph 1 of the Road Traffic Act)

However, there are supplementary rules which are not available online, and I had to get help at the Law Library to get a copy of "Road Traffic Act (Chapter 276, 121 and 140), Road Traffic (Pedestrian Crossings) Rules", which says that

"pedestrian crossing" means any crossing established for the use of pedestrians on a road, subway or bridge indicated by traffic signs, road markings, or otherwise as shown in any of the diagrams ..."

It also says that

Except as provided in paragraph (5) [relating to physical incapacity], any pedestrian who is within 50 metres of either side of a pedestrian crossing ... shall make use of the pedestrian crossing for the purpose of crossing the road.

Section 4:

The driver of a vehicle who is in the process of turning his vehicle at a road intersection or junction where there is a pedestrian crossing shall stop his vehicle in order to give way to any pedestrian who is either crossing or is starting to cross the intersection or junction.

I didn't research the definition of right of way but this blogger claims pedestrians don't have it. This is apparently the norm in former British colonies.

So pedestrians have precedence in marked crosswalks, but nowhere else. I live on Bukit Timah Road, which is a major arterial, and simply to walk along the road on the sidewalk you must constantly cross driveways and side roads; none of these implied crossings are actually marked.

In contrast, here's the standard in the US:

The 2000 Uniform Vehicle Code and Model Traffic Ordinance (Uniform Vehicle Code) (Section 1-112) defines a crosswalk as:

1. "That part of a roadway at an intersection included within the connections of the lateral lines of the sidewalks on opposite sides of the highway measured from the curbs, or in the absence of curbs, from the edges of the traversable roadway; and in the absence of a sidewalk on one side of the roadway, the part of a roadway included within the extension of the lateral lines of the existing sidewalk at right angles to the centerline.
2. Any portion of a roadway at an intersection or elsewhere distinctly indicated for pedestrian crossing by lines or other markings on the surface."

(Federal Highway Administration)

And here's the relevant law for Washington State:

RCW 46.61.235.1 The operator of an approaching vehicle shall stop and remain stopped to allow a pedestrian or bicycle to cross the roadway within an unmarked or marked crosswalk when the pedestrian or bicycle

So, Singapore needs to either change its laws or paint a whole bunch of lines. And lest you think the latter is implausible, in the last few weeks the government has been sending crews to embed yellow textured mats in the curb cutouts. I assume this is to help blind people (of whom I've met or seen exactly one in public in all of Singapore. I think I've seen all of one or two wheelchairs, powered or otherwise; like most of Asia, the norm is for handicapped people to stay out of sight). Don't misunderstand: I applaud accessible infrastructure. I just wonder why they couldn't throw some zebra stripes down while they were at it.

Pictures from our Sunday Morning Walk.

(Some serious catch-up here: I read some of these six months ago or more)

Harry Potter and the Deathly Hallows, J.K. Rowling
A perfect airplane book. It came out a day before my flight. I started it at the SeaTac airport and finished it on approach to Tokyo; left it on the plane for the next person. I was satisfied with the conclusion, but I do feel that the only part of the series with really exceptional writing was the last third of book 3 and the whole of book 4.

Death of an Expert Witness, P.D. James
Grabbed it from the university library on a whim, enjoyed it. No particular hurry to read more.

The Dark Tower series, Steven King
It's Steven King's magnum opus, for better and worse. It reads like he just wrote it on the fly, which he pretty much did. If you like King enough to want to spend a million words with him, you'll like it. The atmosphere is great, the characters are sometimes great. The horror and scary level is mostly cranked way down. Despite the length, it's not really that Epic, partly because not all that much happens and partly because of the claustrophobic feeling of being in just enough of a world for him to tell his story (the opposite of Tolkien Syndrome). The last three books, especially, feel somewhat like playing a computer game, as you go from location to location, and then back, and then find the widget, and then go back to that one place where the widget reveals a secret door, and then see what's back there, and then go back to that other place and now you see that the guard you killed happened to land on top of the other widget, that's why you didn't see it the first time and wasted two hours before you searched google for a cheat guide, and all the time you are alone, and the computer-generated characters walking in their computer-generated routes for you to sneak past just make you even more alone, with only your thoughts for company. That kind of feeling. Except that you're alone with Steven King's thoughts.

Arthur and George, Julian Barnes
This is Literature in the best sense; you get sucked in and just keep reading and it gradually dawns on you that what you are reading is immaculately awesome in conception and execution. This and Sacred Games were easily the two best books I read in 2007.

Mao: The Untold Story, Jung Chang and Jon Halliday
I already had a sense that Mao was a villain for all time and an equal partner with Stalin and Hitler as the most heinous mass murderers of all time. This book fills in a lot of details, and takes it a step further. It's a very thorough attempt to paint pretty much everything Mao ever did as an act of calculated evil. I understand that the quality or provability of some of the research is under attack. Many people seem to have recoiled just at the intensity and completeness of the argument, taking the position that any description which is so one-sided must be somewhat exaggerated. I don't see that as a logical rebuttal, but I do have my own issues with the narrative, especially the account of Mao during the war period (Long March to 1949). The authors attempt to explain almost all of Mao's successes and escapes as consequences of Mao's masterful manipulations of friends, rivals, allies, and enemies. Given the slender evidence for some allegations, they don't seem to hold up well to Occam's razor. Isn't it more likely that some of his opponents just screwed up or were stupid, rather than that he pulled all of the puppet strings all of the time?

I don't see those kinds of issues as wholly discrediting the book. I learned a lot, even though I found it so horribly depressing that I couldn't read too many pages at a sitting, and ended up setting it aside about two thirds of the way through. Anyone who has a positive or mixed opinion about Mao must be seeing the evidence through very rose-colored glasses; the genuine debate seems to be only about if he's purely evil to the last cell, or just really, really evil.

One Jump Ahead, Mark L. Van Name
A pulpy sci-fi story. I bought it on the strength of the first page or two; it passed the time and had some style but didn't seem especially novel or well-plotted.

Ghost Brigades, John Scalzi
More of the same from Scalzi; it's good, but like diet soda has some weird, unpalatable aftertaste. SPOILER: It may be related to the debate (sorry, couldn't find a link quickly) about whether it's fair to criticize the fascist tone of the earlier book when that tone may represent the narrator's views rather than Scalzi or the world Scalzi has created, or it may just be something about his writing almost but not quite rubbing me the right way.

The Omnivore's Dilemma, Michael Pollan
Almost everything we (in the United States) eat contains corn. A typical fast food meal may be predominantly corn, in that corn is the input stock to industrial processes that make sweeteners, thickeners, and a myriad of other "ingredients". This is because corn is the most efficient crop at converting sunlight to energy; soy is the most efficient at converting sunlight to protein and so soy is the other main crop in the US. Corn as the foundation of industrial farming is really bad for society for many reasons, not least of which because the corn ecosystem requires huge inputs of petroleum. The proximate cause of this is really destructive farm subsidies and policies.

The book is, for the most part, ultra-readable. Pollan does a lot of hands-on research into farming and the corn industry, including spending time on a modern factory farm and on a smaller, more natural farm which integrates agriculture and livestock in a labor-intensive and astoundingly productive enterprise. The parts where he collects all of the ingredients for his own home-cooked meal are probably the least engaging, but the book has definitely changed how I look at manufactured food.

Uncommon Carriers, John McFee
Like the Omnivore's Dilemma, this book starts tremendously, with very gripping details about mundane infrastructure, and then peters out as the author gets more personal. The stories about a long-distance trucker, a coal train, a Missisippi barge crew; all fantastic and give you a wonderful sense of being there.

1634: The Baltic War, Eric Flint
I've been enjoying this pleasingly escapist multi-novel story about a modern West Virginian coal town transplanted to 17th century Germany, but experiencing diminishing returns. At first I thought I was just getting tired of the story, but then I read this and realized that the real problem is that the writing is degenerating into a "Mary Sue" story. The moderns always face small setbacks but overcome them with ingenuity and steadfast leadership; the locals get entranced by good old American values; it seems like every book features plucky, scared but brave American teenagers getting over their heads in world affairs and having beautiful, progressive 17th century teenagers fall in love with them and it always works out. I liked the ideas, trying to figure out how 17th century culture would interact with 20th century small-town Americans; the pro-union bent of the authors; seeing how you might try to reconstruct modern industrial technology almost from scratch. But the execution has completely turned me off, and I've stopped reading this series, probably a book or two too late.

Star Trek: Swordhunt, Star Trek: Honor Blade, Star Trek: The Empty Chair, Diane Duane
The Romulan Way remains my favorite Star Trek book ever (not meaning to damn with faint praise); these sequels extend the story in a fairly unsatisfactory way. Spoiler: How come it seems like every Diane Duane book (Star Trek or otherwise) has the same climax, as the diverse good guys, now bonded as BFFs, pluckily march once more unto the breach with some sort of reality-bending mystical energy thing as background, a la Madeleine L'Engle? Counting My Enemy, My Ally, Duane uses this ending twice in the same series, not to mention all her non-Trek books. It seems like the Mary Sue virus is at work here too.

I have to confess that I haven't done too much studying during Reading Week. You could take this as a sign of hubris or laziness, and I won't deny elements of that. On the whole, however, I am urging myself toward a more charitable view: I never missed a class; completed the readings for almost all classes, in many cases actually reading every page, not just skimming, and in many cases months ahead of class discussion; and took seventy thousand words of notes. Whatever you wanted me to learn, if it didn't happen already, it's not going to happen in one week of cramming.

What did I do during Reading Week? Well, I did attend the day-long Singapore Project Management Symposium, which got me credit towards maintaining my PMP certification—more about that wild party shortly. But mostly I read. I finished the last few books of Stephen King's Dark Tower series, something I've been working my way through all semester since finding the first one at a used book store here in Singapore. That's seven books and surely something approaching a million words. I finished the last book earlier this week, and on the evening of the same day I watched the last three episodes of Battlestar Galactica Season 3. That's really a lot of narrative to wrap up one one day. And perhaps that explains why I feel compelled to tell you about today's SMIG (States, Markets, and International Governance) final.

NUS takes all examinations very seriously, allegedly because in the past many classes took 90 or 100% of the grade from finals. It's hard not to wonder to what extent a multi-millenium Chinese tradition of examinations still exerts influence, to say nothing of cheating. Several professors said they didn't want to give finals but their written applications to skip finals in their classes were rejected. Happily, at least for negotiation we won't have a final. (You have thirty minutes to negotiate with your assigned partner to share 30 points of final grade between the two of you. Note that the final makes up 30% of your final grade, so this is a zero-sum negotiation. Failure to reach a signed agreement before time is up results in the loss of those points for both parties.)

Anyway, our instructor filled out extra forms so that we were able to take our exam in the computer lab at least, and I was able to change my keyboard to Dvorak; I didn't try surfing the web. The SMIG final had eight questions taken from the readings. The key instructions:

• The Exam is two (2) hours long.
• Ten (10) minutes reading time is permitted prior to commencement of the Examination.
• Candidates should answer any two of the questions in short answer format (approximately 750 words for each response)
• Candidates should answer any one of the questions in essay format (approximately 1500 words)
• there is no penalty for longer responses.

Yikes. 3000 intelligent words on three topics in 2 hours. That's an average of 25 words per minute. I can type double or triple that speed, but I can't necessarily think that fast.

There was a lot of overlap between some of the questions; while the details diffe, they all ultimately resolve to the same few points, which also serve as a summary of what I learned in class:

• Nation-states have yielded power in some areas on some topics to other kinds of actors
• In some cases nation-states have yielded this power voluntarily, because they think non-state actors will better meet the state goals.
• Nation-states could probably take a lot of this power back if they wanted to, although that would break a lot of things and likely not be in their interests.

I ended up choosing these questions for short answer: what do "anomalies between convergence and divergence ... tell us about the power and influence of the nation-state when much of the literature is suggesting that state authority is increasingly constrained by transnational economic actors and market forces?" (771 word answer), and "how do we account for such contrasting outcomes [MNEs escaping taxation, Hungary regulating foreign automobile FDI] that suggest both the increasing power of MNEs but also the continuing power of the nation-state to regulate them?" (675 words)

For the essay, I tried to "provide four examples that support Hass's thesis [that 'the world 35 years from now will be semisovereign'] and four which refute it." and answer "[h]ow might these different and contradictory forces on the Nation-State be explained and what, pen ultimately, might determine the outcome?" This one was tricky. First, I would really like to know what "pen ultimately" is intended to mean. Is there some use for "pen" that I'm not aware of, some kind of foreign word thing like "vis-à-vis" or "ipsum"? Or, it just now occurs to me, was he trying to say "penultimately", which makes no sense at all in the question, because why the heck would you be more interested in the penultimate than the ultimate outcome determinant?

To my eternal shame, due to time shortages, I resorted to using North Korea's continuing existence as an example refuting Hass' thesis. I realize as I am typing this that, since his thesis is semi-sovereignty, I could have refuted his thesis both with examples of persistent full sovereigty and of complete destruction of sovereignty, and supported it with examples specifically of semi-sovereignty, but that's spilt milk under the bridge.

I also came very close to using the Vinge/Kurzweil singularity theory in my answer. That's the theory that our lives our changing so quickly in every respect, but especially technologically, that very soon (years or decades from now, not centuries), the world will become completely incomprehensible to everyone who came before. Not just weird in the way that televisions and supermarkets are to Stone age people, but utterly different.

The only thing that really went wrong was that I mismanaged time and had to stop in the middle of my concluding paragraph (and shy of a thousand words), just as I was thinking of a few new ideas to make my point. So here, professor, in case you are dying to know, is the ending:

Previously in Joel's essay:

There will therefore be a race between technological change and political change.

And now, the thrilling conclusion to ... Joel's essay:

Technological changes will ultimately render the current, geographically based nation-states irrefutably obsolete, as our Cylon overlords impose new political and economic systems. Meanwhile, current trends towards both political aggregation, as for example with the EU and NAFTA, compete with matching trends towards devolution and self-determination, as in for example Scotland, Montenegro, provincial Malaysia. These competing trends are likely to disperse what used to be national powers, such standing armies, foreign policy, justice, and compulsory education, to new units of political power either bigger or smaller than nations. The Westphalian nation-state already stands eroded; it is unlikely that it will persist in recognizable form. When the last Gunslinger dies in his quest to reach the Dark Tower, our world will move on, as Mid-World has already done, and the Crimson King will rule unchallenged. Thus, either Roland will fail and the Dark Tower will fall, taking with it all humanity, or we will learn that we are all Cylons. To find out which ... tune in in 2008!

I grew up in Alaska, so I am not unfamiliar with the moose. Before I was a vegetarian, I even ate moose sausage once or twice. And while I've also eaten elk, I don't remember ever actually seeing an elk.

But I just saw this article, 'World's largest elk' to be built in Sweden (via Making Light), and had to do some research. I learned that what is called a moose in North America is called an elk in Europe; what we call an elk in the US is a smaller animal of a different genus, and is called the wapiti in Eurasia.

As the OED explains under the entry for moose:

1. a. The elk, Alces alces. The usual name for the animal in North America (where elk is used instead for the wapiti, Cervus elaphus canadensis)...

Certainly there's nothing wrong with the word elk. It has a nice enough sound, /ɛlk/, if a bit abrupt, and a vague sense of nobility. But as words go, it really can't hold an antler to /mu̟ːs/.

Catch-22, Joseph Heller.
I read Catch-22 for Matthew Baldwin's NaNoReMo 2007. His commentary, plus a sampling of user comments, covers the book review territory pretty well, key points being: if you don't like the style, it's hard to read; if you do like the style, it goes very quickly and is a hoot, but can still be trying; the deliberateness of the repetition. I am a bit disappointed by some of Matthew's selections of favorite passages: he seems to favor the most heavy-handed and obvious polemical bits, which to me are not the strength of the book.

What I want to add to the discussion is this thought, from a New York Review of Books article about war reporters:

... that violent conflict is simply beyond representation ... may be true about movies.... About writing, though, it is untrue. This is a matter of craft, a matter of devising the right technique. And it always has been. Right at the dawn of modern fiction, Jakob von Grimmelshausen recognized that his experiences in the hell of the Thirty Years' War could not be told straight because they were beyond the comprehension of peaceful readers. So he transposed them into a key of horrifying, merciless, callous satire, The Adventures of Simplicius Simplicissimus (1669). Don't try to "understand," don't try to "imagine,", just read Simplicissimus and be appalled at your own laughter. That way, you are getting close to what Carolin Emcke and Anthony Loyd are trying to report. —Neal Ascherson

This describes Heller, whose biography is similar to Yossarian's, perfectly. This is not the work of a veteran, a decade or two after the war, deciding to write something clever about how darned wacky it was. Catch-22 is a scream of pure rage, at war in general but more pointedly at those individuals who bear responsibility for causing war and for making it worse, at those people who cause horrible suffering with callous indifference.

Helen Sampson and Michael Bloor (2007), "When Jack gets out of the Box: The Problems of Regulating Global Industry," Sociology, 41(3), June, pp.551-570.

• p 551, from the abstract: "This article considers the challenge of regulation across national borders using the example of the shipping industry. ... It concludes that effective global regulation faces considerable challenges."
• p 552. shipping is a "critical case" for global governance, in the sense that, it's so important to be globally governed that it of all things ought to be globally governed, and if it's not, then global governance probably isn't working/happening anywhere. A dubious thesis, if you ask me, because historical accidents could have influenced any specific "critical case".
• p 553. Further elaboration: shipping is a critical case because "in this industry there have been long-standing and sustained efforts to establish effective forms of global governance dating back to the first decades of the 20th century." I think this whole "critical case" thesis is not helping anything other than bulking the introduction up by an extra page or two.
• p 553. "given the advantages inherent in the shipping sector in relation to the possibilities for regulation ... if regulatory compliance cannot be adequately secured in this sector it is unlikely to be achieved elsewhere." Was that just a third justification for "critical case"? Note that "critical case" comes from a 1968 paper about "embourgeoisement in Britain".
• p 554. "Associations between profitability, regulatory avoidance and workplace safety have been noted elsewhere". I assume they mean that as regulatory avoidance goes up and safety goes down, profitability goes up.
• Flag states. If nations really cared about losing regulatory power over ships (which they probably don't, since shipping companies have lobbyists and dead seagulls and invaded species don't), they could just ban ships from nations with inadequate regulations.
• p 555. Actual data. two studies. 104 ship visits. UK, Russia, India.
• p 555. Alternatives to command and control regulation: enforcement pyramid, accomodative or compliance strategies, "smart" regulation, using market mechanisms, transparency.
• p 556. "Port-State control" is an attempt to enforce regulations regardless of flags of convenience. That's what I said a few pages ago; I guess I'm really proactive here.
• p 556. A ship operator claims "Everybody is using EQUASIS ... 'Name and shame' works: it's helping to remove the sub-standard ships that are driving down the freight rates."
• p 558. Inconsistencies in port-state control render is useless. "One inspector boarded a ship [that had] broken down off Ushant. In a port-State inspection in Spain, only two months previously, no deficiencies had been recorded. Yet this inspector identified fourteen separate deficiencies"
• p 563. self-regulation doesn't work either. Some members are corrupt so the white lists of well-self-regulated companies can't be trusted.

Virginia Haufler (1999), "Self Regulation and Business Norms: Political Risk, Political Activism," in A. Claire Cutler, Virginia Haufler and Tony Porter (eds.), Private Authority and International Affairs. Albany, New York: State University of New York Press, pp.199-222.

Business norms and strategies make a difference in governance. Examples: insuring ships against war risk;

Michele Fratianni & John Pattison (2002), "International Financial Architecture and International Financial Standards," The Annals of the American Academy of Political and Social Science, 579, January, pp.183-199.

The authors argue for leveraging the US/UK dominance in global finance markets for purposes of regulation. "these two centers ... are the conduit of systemic risk, [and so] can establish both the rules for market access and the core regulatory and supervisory framework to deal with international systemic issues."

Hans Tietmeyer (1999), "Evolving Cooperation and Coordination in Financial Market Surveillance," Finance & Development, 36(3), September, pp.20-23.

German banker's report on setting up the Financial Stability Forum at the request of G7. The three priorities he identified included identifying vulnerabilities, making better rules and having those rules followed, and consistent rules and information flow internationally. To its credit, the FS Forum seems to publish a lot of stuff on its website. Here's a detail from the January 2007 European Regional Meeting: "Participants noted the current benign global financial conditions, which had fostered and reflected robust global growth, rising corporate profitability and financial innovation. At the same time, markets were seen to be characterised by a very low level of risk premia, especially in credit markets." No word on any, ah, vulnerabilities looming in the future. Apparently all that risk is properly priced as of January 2007.

Class discussion

Who regulates international financial markets? Not really anybody; ad-hoc committees to some extent. Bank of International Settlements. Basel Accords.

Competitive regulation theory: Financial actors are regulated by the laws of their home country, even when operating in other countries. Standards set by international bodies but enforced by states. Reserve requirements. (Here's an especially thorough Wikipedia article on reserve banking.)

Q: If competition will regulate everything, why do we need state regulators?

Q: This mode of quasi-regulation is happening in every industry. Why is it more complicated in finance? A: Low transaction cost and high volume in finance. Affects many others.

Consensus that most needed type of regulation is to slow down super-fast flow of money which causes excess volatility. E.g., tax on currency exchange.

This issue is in the public interest, so why aren't there any NGOs involved? Which ones might be? Bono/Geldof, debt relief NGOs?

Non-disclosed books: conduits, off-balance sheet. Represent a move by heavily regulated companies (US banks) to decline to be regulated.

What's the point? Banks must be regulated because otherwise they will take bad risks in search of profit and collapse, taking out other banks in the process and damaging the financial system. Without a healthy financial system, the economy can't function well. So some type and level of international banking regulation is required to have either a global or even local economies.

Canada, New Zealand, and Australia are trying to slow their economies by raising interest rates, but their currencies are rising (as the US dollar weakens and the US lowers interest rates) and, as a result, their exports are getting hurt.

Shipbuilding industry. After WWII, US had as much as 36% of the total world fleet.

Final class of the semester, intended to show links between macro and micro-economics.

Guest speaker, Joshua Greene from the IMF.

There's certain things you can't expect even a perfect market to provide in the right quantities. You need government.

Fiscal policy and macroeconomics. Stabalization, including inflation around 1 to 3 percent. Output near potential GDP. Sustainable balance of payments. Tools used to accomplish this: gov't spending, tax cuts [sic]. ... Shift taxation from income towards consumption to reduce double-taxation of savings. (Joel's note: some opinions against this idea: 1, 2.) Spend in a way that raises productivity: better courts to support business, more operations and maintenance, health and education, skilled staff.

Microeconomics. Addressing market failure. Natural monopoly. Externalities. Public goods. Imperfect and asymmetric information. Incomplete markets due to adverse selection.

Professor Toh Mun Heng

From the NUS business school.

Example one: peak-load problem for mass transit. Economic theory says you should change more at peak times.

A seminar from the Law Faculty. The last event I attended here had perhaps 20 attendees. This one, on the legality of homosexuality, is standing room only, with media (which triggered an announcement by the moderator that, as is normal for these seminars, people are free to speak without attribution by name. That's the first time I've heard anyone at any lecture or seminar speak directly about press rules).

Section 377, banning "carnal intercourse against the order of nature with any man, woman or animals", commonly understood to criminalize bestiality, anal sex, and oral sex. Up to a life sentence in prison. This was revoked last month and replaced by a new section 377 which criminalizes only necrophilia.

Section 377a bans "any act of gross indecency with another man". It's still in force and is understood to ban male homosexuality. Up to two years in prison.

Criminal law

Legal argument: The repeal of 377 may have, technically, unintentionally, legalized male homesexuality. Legal background; it's messy, having to do with 19th century British law cut and pasted into colonial laws. If 377 is removed, decriminalizing unnatural sex between men, women, and animals, and replace it with a law that bans only sex between humans and animals, should that be interpreted to mean that unnatural sex between men and women is legal?

Joel's note: While he dives into legal minutiae, let me give you some selections from a speech in Parliament by Nominated Member Thio Li-ann in defense of 377A

[R]epealing 377A is the first step of a radical, political agenda which will subvert social morality, the common good and undermine our liberties. ... If we seek to copy the sexual libertine ethos of the wild wild West, then repealing s377A is progressive. But that is not our final destination. The onus is on those seeking repeal to prove this will not harm society.

According to the prof, the Law Society of Singapore has formally opined that gay sex is not harmful. Back to the quote ...

... but "harm" can be both physical and intangible; victims include both the immediate parties and third parties. What is done in 'private' can have public repercussions.

The harm that Thio seems to have in mind here is the kind that, as Dan Savage argues, is caused by being closeted, not by being gay.

As law has a moral basis, we need to consider which morality to legislate. Neither the majority or minority is always right – but there are fundamental values beyond fashion and politics which serve the common good. Religious views are part of our common morality. We separate 'religion' from 'politics,' but not 'religion' from 'public policy'. That would be undemocratic. ... Human rights are universal, like prohibitions against genocide. Demands for 'homosexual rights' are the political claims of a narrow interest group masquerading as legal entitlements. ... You cannot make a human wrong a human right. ... Science has become so politicized that the issue of whether gays are 'born that way' depends on which scientist you ask. ... Homosexuality is a gender identity disorder. ... Singapore law only recognizes racial and religious minorities. Special protection is reserved for the poor and disadvantaged; the average homosexual person in Singapore is both well educated, with higher income – that’s why upscale condo developers target them! Homosexuals do not deserve special rights, just the rights we all have.

Her speech continues for pages in the same vein, getting more repugnant with every page. While I've been sharing this speech with you, the prof has reviewed the arguments that gay sex cause harm through HIV/AIDS and paedophilia and found them wanting. We rejoin the seminar talking about morals.

Problems with "enforcement of morals" theory. Singapore's law is arbitrary with respect to morals; abortion is legal, prostitution is legal, "enticement" is legal, casinos have recently been legalized. In Singapore, a man who is gender-reassigned to a woman can legal marry a man. Not many countries have done this. Singapore has announced that 377A will not be enforced. Unenforced laws can be worse than nothing. Parallels from the abortion debate in Singapore four decades ago.

Constitutional law

There is no explicit privacy clause in the Singapore constitution, so I'll focus on the equality issue. Discrimination is legal in Singapore when it is based on "intelligible differentia", the differentia has a "rational relation" to the purpose, and the purpose is legal. Now that 377 is struck and 377A retained, the equality argument falls apart because sex between women is not included, etc. There is no rational relation to the "objects of the Penal Code" since it doesn't prevent harm, protect public order, or preserve public health. Supporting details include condom provision, gay bashing, HIV screening, etc etc. The only object is moral/religious, which is not a legitimate object. South Africa struck down a similar law on equality grounds. In the US, Lawrence struck down a similar law on privacy grounds, but O'Connor argued on equality. Same in Fiji and Hong Kong, which decriminalized gay sex in about 1991.

Conclusion: 377A is not justified in law, is not constitutional, goes against public health etc, contributes to hate crimes, puts Singapore out of step with the rest of the world.

Comment: The problem with your argument is that Singapore has adopted a (unclear) definition of rights. The law does pass muster on "rational relation"; you can define the group of "men who have anal sex with men" quite clearly. Once Singapore finishes shifting its definition of equality, then you can make that argument, but not with the law as it stands.

Comment: a concurrence that an intelligible differential can be found in "men who have anal sex with men". But that leaves out "men who have anal sex with women". ... By rejecting morality as a basis, you can then make your differential argument (since, if I follow, without a moral argument there's nothing special about men having anal sex with men versus various other combinations). But I need to be persuaded that morality is not a legitimate purpose for Parliament. If it's declared an avowed purpose, why is that not a legitimate purpose? Non-enforcement is another issue, because the person who decides whether to enforce is the public prosecutor, who is insulated from Parliament. How does that affect your arguments?

A: ... There's a difference of opinion on morals.

Comment: States in the US have submitted to a higher federal law that makes state morals subordinate to federal law, and US courts are right to reject morality. But Singapore's a unitary state. That strikes me as slight of hand; doesn't that just shift the issue to the morality of federal law?

Comment: What about animal welfare and morality? Whose morality are we enforcing? Sometimes the law should enforce morality. But I agree with the MP who said he's uncomfortable with Victorian-style moral laws.

Q and A about what offensive is.

The penal code shouldn't deal with some of this: for example, if necrophilia is banned, and bestiality isn't, what about sex with dead animals? The penal code shouldn't need to address this.

A symbolic law that isn't harmful may be okay, but this symbolic law clearly causes harm.

Q: Singapore is the only first-world country (out of 31 under IMF criteria) which bans homosexual sex. Why are we still in this position? There was no AIDS in the 1880s when the law was written; it's just a smokescreen. What is an act against nature? What about in-vitro fertilization? They said the anus is for the excretion of waste - so they won't get colonoscopies? (I trimmed a very long-winded non-question.)

A: ... I take offense to your attack on my colleague (says the prof who argues 377A is unconstitutional to the rambling commenter)

Q: this curious animal, the unenforced law. I suppose there's an analogy to jurisdictions which have a moratorium on the death penalty but still have the law on their books. Perhaps that's the closest parallel. (The tone in the room got a bit awkward as the moderator tried to bring the previous rambling commenter to a point)

Q: It's a Christian morality, which we've seen defended by a Christian minority. It worries me, when it came to abortion and to casinos, Christian concerns were rejected by the government, but on this issue, it was different. Why does this Christian morality win the day when Christians are only 15% of Singapore? A: that's a difficult question, I'm just a humble lawyer. ... This is not just a Christian; may not be in Hinduism, Taoism. But it seems to me this could end up a turning point in Singapore politics. MM Lee and his legacy have been pragmatism. Here was a narrow and open debate on ideology. I think pragmatic reasons point clearly to legalization but the government didn't go that way.

Q: I want to go back to your first point. I can see the headlines tomorrow: NUS law prof says homosexuality now legal. (A: I was just being provocative.) You are arguing that 377 was the law that banned male anal sex all along and everybody was arguing the wrong section. A: not exactly. Why are there two different sections with vastly different penalties? Historical formation of the law.

Q: India is going through a similar issue (Because of the common colonial origin, the Indian law is also section 377.

Q: you spent a lot of time talking about equality, but the constitutional issues in Lawrence are concerned with liberty.

Joel's note: As a post-script, here's Thio Li-ann's article in the Straits Times defending her speech:

"Can we disagree without being disagreeable?", Thio Li-ann, The Straits Times (Singapore), 26 Oct 2007.

Why, in the interests of objectivity, had the 'ex-gay' phenomenon not been investigated?

[...]

I hope Singapore will not end up with an uncivil civil society by allowing public debate to degenerate into fruitless name-calling and distorting issues by speaking misleading half-truths.

[...]

Furthermore, specific issues should be debated, rather than making emotional and vague appeals to 'fairness', 'equality', 'inclusivity' and 'tolerance'. The concrete issue is: What should we exclude or include?

[...]

To approach morally controversial debate with maturity, the solution is not more government, but self-government.

To recap: Why can't I deny you your rights without you getting upset about it? We should discuss the misleading, mostly untrue 'ex-gay' phenomenon but not speak misleading half-truths. Please make your argument against banning male homosexual sex without using fairness or equality. We can use self-government while we debate the government prohibition against you. You can dig up the whole thing in your local library but it's not any more coherent that my excerpts.

1. Create slides with your points in bullet form. This helps depersonalize your presentation so people don't pay attention to you.
2. To help make it worse, put everything you are going to say onto your slides. That way your audience will have even less reason to listen to you.
3. Extra bonus bad: read out loud from your slides. Minimizing your audience's cognitive load keeps them less engaged.
4. Double-extra bonus bad: turn your back on your audience. Eliminating eye contact reduces the human connection even more.
5. Speak in a monotone at a constant speed. Since you are reciting facts that don't even interest you, your audience need not be interested either.
6. Do not practice. By not practicing, and especially, by not practicing by speaking out loud, you can preserve your hesitations and speech disfluencies for your audience. You will also reinforce your dependence on your text.
7. Stand still. By moving, you will only attract attention.
8. Speak for many minutes more than planned, so that your audience feels trapped and impatient.
9. To help with this, you may want to mention every fact relevant to your topic rather than focusing on the most important ones.
10. To help even more, remember to not practice. I can't emphasize enough how important not practicing is to bad presentations.
11. For technical bonus points, use colorful slide backgrounds so that some of your text is illegible. Even if the text is legible, a few superfluous frames and decorations can go a long way in distracting people.
12. For extra technical bonus points, use sound effects and animation in your presentation. Your audience will appreciate them as much as they do cell phone ring tones.
13. Final technical bonus opportunity: don't pre-load and pre-test your files on the equipment. Starting your presentation with tedious computer manipulation helps reduce interest even before you start speaking.

And a few comments I don't want to force into the conceit of the bad presentation list. Slides are mostly bad. Only use slides if there is something you want everybody to see at the same time, presumably because you are saying something interesting about it. For example, a diagram or chart or something. I think there is an argument in favor of putting something in text for the benefit of audience members who aren't comfortable in the language of the presentation, but if so, it should be on paper handouts so that everyone who needs to read what you are saying can do so at their own pace. Also, paper handouts should be in prose, not in bullet points.

If it were up to me, the minimum acceptable presentation would be performed without notes or bulleted slides. And presenters would be cut off completely at the time limit and judged accordingly. People in class need the conclusion less than the presenter needs to internalize the importance of practice and time management.

Long-time member of parliament and minister for many different departments. He has his own Wikipedia page and also some strong criticism. I wonder where that last site is hosted—surely if it was hosted in Singapore it would be shut down already? Hm. It's registered by " Domains by Proxy, Inc.". The route to the server goes through Los Angeles and Atlanta. Now on to our speaker.

Oh, and we are at a noon meeting in a lecture hall with the blackout shades drawn and the lights all the way up. One or two speakers have pointed out this nonsense without any effect. Since then I've tried to make it a habit to open the blinds (there are glare shades you can leave in place while letting in most of the light) and turn the lights down when I have the opportunity. But last time I did that, it took about 5 minutes before somebody else came in noticed the room was only well, not blindingly lit, and turned the lights back to max.

From here on, plain text is the speaker:

I'm not good at speeches because I fall asleep listening to them. I like Q&A better. Joel's note: fairly generic Singapore governance speech. We have limited resources, business hub, etc. It's not possible to have policies that please everyone.

Someone told me "You guys cheat all the time" "Why?" "You have the database, you see the good students, you pamper them, and when they get out they want to work for you." Through that process we ensure there's a core group in Singapore who have the talent to do things right.

Joel's note: He's right, he really isn't good at speeches. He has a rambling style and hesitant speaking style that make it extremely hard to follow his point. Having briefly skimmed the criticism site linked above, which calls him incompetent, it's tempting to concur simply based on how bad his speech is. Not only because of the poor delivery, but because he doesn't give any hints of interesting thought. While he drones on, I'll continue with the research.

The authors of a book called "Escape from Paradise" claim:

He fell into extreme disfavor with the Singapore Government. On Dec. 2, 2002, it was announced that he had been removed from Singapore's People's Action Party (PAP) all powerful Central Executive Committee. This was the beginning of the end for Yeo, which is what happens when a Cabinet Minister and his wife go out on a limb to ban a book that brought attention to a property transaction, that stuck fear into the Yeos. Escape from Paradise did not say what Helen Yeo had done. However, when she threatened to sue us, we let it all hang out on the web.

He's still rambling. Deregulation, phones, cheap IP calls, low-cost airlines invited into Singapore. Etc. Finally the concluding sentence. "All of these relate back to having clarity in policy making." 35 minutes. Meanwhile I found this book, which looks like it might be worth a read.

Q: What's the relationship in Singapore between policy making and politics. How are stakeholders involved? A: The stakeholders with the loudest voices are private companies and mumble. We try to listen to the stakeholders; are their inputs self-serving or do they provide greater clarity. [about five minutes of ramble that adds nothing to his answer] We have to hold the ground every 4 years or the people will vote us out.

Q: can you give some examples of where the policy-making process went wrong and how it was corrected? How important is it in your opinion for people to be able to complain? What opposition do you face in re-election? A: If you have 20 people, not everybody will agree. (Joel's note: A revealing comment, I think, because it suggests that 1) there are about 20 people present in whatever meeting really makes decisions, and 2) Yeo thinks those twenty people are all that matters.) The core of the policy, few people would disagree with. Just because people argue at the margins doesn't mean the policy is really wrong. The "stop at two" policy—I thought it was wrong because I came from a family of 12. But later on I realized it was a good policy. ... Many people have the perception that there's no dissent allowed in Singapore. but this is not true. In Singapore we engage the dissent and argue, and many times convince them. And people who can't stand the heat may leave. ... Competition: I faced competition twice. Explanation of GRC (a mechanism the PAP uses to help maintaing a monopoly on power) as a means to ensure minority representation. Once I faced the strongest group of 5 opposition ever. I got 80.1%. So competition is there. We don't buy votes in Singapore.

Joel's note: yes, he really did just cite beating the best opposition ever 80-20 as evidence of fair elections. As with Blair's unfortunate answers on Iraq, he gives every impression of believing his own answer

Q: What changes have there been with the three prime ministers? Are there two factions within the cabinet? A: I joined with LKY. No change in substance, only in style. He's mellowed since then. He challenged you, and you either stood up to the heat or you shouldn't be there. Goh was a lot milder. The policy that was hottest was the integrated resorts. No gambling means no gambling. Even today there are dissenting votes.

Q: Based on your speech it seems like one of the keys to your success with difficult policies is a very cooperative business sector. Why is this? A: A sense of trust. Built up over many years of working together that they know, at the end of the day, that we have their interests at heart. Government doesn't create wealth, it consumes wealth. We depend on the private sector to create wealth.

Q: something about the Philippines and the power of the church. A: Our system is much simpler than many other countries. Many policies don't have to go back to Parliament to be approved. Otherwise policies could be watered down.

Q: I recently became a PR (permanent resident), thanks to your investment plan. I've been fascinated by the Singapore story and you guys have done a fabulous job here. One limitation in the future could be land. How will you deal with that? A: regionalize, internationalize. Do only what absolutely needs to be done in Singapore. Singapore can have a maximum population of perhaps 8 million; you can do a lot with 8 million. Involve countries in region in Greater Singapore. They should realize it's win-win.

Most of our guest speakers are selected opportunistically; they're already booked in Singapore for some reason and LKYSPP finds out and nabs them. I wonder what Tony Blair is doing in Singapore, other than meeting LKY (the person, not the school) as the dean not-so-subtly hinted.

Executive Summary

Blair is very graceful and sympathetic, with some self-deprecation. He makes a good impression. His answers to questions on Iraq, the defining failure of his term, are insultingly bad.

Dean's introduction

A plug for NUS and LKY.
• After globalization, the world has shrunk literally [? if? and? Joel's note: I sensed a Friedmanism coming up and flinched, missing what exactly he said] not metaphorically.
• A few Blair key achievements not as well known in Singapore.
  • Reformed not only the Labour party but also the economy.
  • Few know that Blair came very close to losing a vote on university fees. He pushed through a fee increase that may have saved universities.
  • Peace in Sierra Leone and Ireland.

Total time of introduction: about 6m30s.

Blair

Singapore, one of my favorite places in the world.

Joke about British media.

Joke about wife being the scholar of the two

There are very few times when you can say that the intervention of one person made a difference in a nation but Lee Kuan Yew is such a person. I managed to get an audience with him many years ago, when I was an opposition MP. Somebody told me he was the guy to meet. I asked him, "tell me what you know about politics," which he did.

Joke about bad predictions and the publisher who turned down Harry Potter.

The two big characteristics of the world today are the sheer pace and scale and scope of change [more or less sic]. As Prime Minister, I was Prime Minister for ten years, you kind of become institutionalized. I never had a mobile phone until the day after I retired in June. I had to learn to do an email. I texted a good friend of mine, not realizing that only my number, not my name, appears, and got a text back, "sorry, but who are you?" I thought, "It's only been 24 hours."

Talking to Clinton about the Asian financial crisis 1997-8. I realized, only a year into my premiership, that the UK economy was going to be affected by something that had nothing to do with the UK.

Kosovo crisis caused problems throughout Europe. Irrespective of what I thought was happening in Britain at that time, this issue was going to affect us as a nation. ... partnership with Clinton, we did act. (Joel's note: I'm not writing everything he says verbatim, but I am typing "Clinton" every time he says it).

What happens in another part of the world can, to a far greater degree than even before, impact right around the world. Different analysis of politics, issues to do with global governance, and the solutions. If you'd asked me six months ago in detail about the subprime market .... I finally got to say just a few months ago, "I don't know". The thing is, as the result of this, right around the world people are worried. The big question being asked by the citizens of this world—I happen to think that globalization is a greater opportunity than problem— ... the reaction to globalization. ... In the UK, every stage of reform is tightly fought over. Indeed I almost lost my job over the university reform. It was necessary as things become increasingly global. Very virulent terrorism, around the world and deeply rooted.

Joel's Note: I just want to shout, why, why were you Bush's lapdog? I'm slightly serious. I really want to speak up. otherwise this whole thing is just a farce. he says the obvious, we clap, nothing happens, we go on. I guess the polite form of the question would be, "had the UK resolutely resisted the call to war in Iraq, what would have been the result?"

He's reciting globalization issues, climate change, coal, price of oil, etc etc. Didn't hear agriculture subsidies mentioned. Energy policy is now right at the center of G8, etc. Just before I ceased being PM, I took two decisions that didn't get a lot of attention. One was a deal with Norway to supply 30% of UK gas. I also, very controversially, agreed to replace the existing nuclear power stations. Those are decisions that wouldn't be on the agenda a few years back.

Immigration. As a result of the pace of change and interdependence, 200 million people are trying to migrate at any given moment around the world. If you took the migrants out of the city of London today, the city would collapse. I think if you look at the challenge of Africa, millions of people dying every year from preventable diseases, wars killing hundreds of thousands, rich in resources but full of poverty, I think that's a challenge for the rest of the world. I'm alarmed at how I can see conflicts in Africa involving some of the extreme forces we see in the rest of the world. The world should invest in improving Africa.

What are the solutions to these? The solutions cannot come through the agency of any one power alone. Open up benefits, not protectionism. Terrorism cannot be resolved simply be security means, but also to persuade those that might be at risk of being recruited to terrorism not to do so. A global view. The challenges are global in nature; the solutions have to be multilateral and global. We have a complete mismatch between the need for such solutions and the capacity to deliver them.

Even the most powerful country in the world cannot force WTO agreements. The ultimately power doesn't lie in military force (re: terrorism); it lies in persueding moderate people in the Islam world not to join the terrorists. But the roots to this are very deep and the answer cannot simply lie in one nation's military force; you can see this in Afghanistan (I think he said).

The G8 today is an important forum but it was absolutely essential that we involved China and India. The biggest challenge is climate change. The world wants to act. There's been a sea change in America. I'll tell you the honest truth (Third time he's used that term) China won't agree to a deal that stops China's growth.

Britain has two strong alliances, one with the US and one with Europe, and we should keep both alive. One part of the media was anti-US, the other anti-Europe, and thanks to my persuasive powers by the end of my term some were anti both.

In the end we're not going to solve these problems without the emerging powers as well as the traditional powers. Some of the solutions aren't going to come from government and multilateral. Some of the most effective campaigns have come from civic groups. Grass roots. Partly because this is something I want to devote a lot of time to myself, but partly because it's of fundamental importance to the world, I don't think we can deal with this outburst of religious extremism unless religions show they can engage. The fact that you celebrate all the main religious festivals in Singapore is interesting; it would be extremely controversial to suggest that they should. (Joel's note: yesterday was Deepavali but I have no idea what that means because I spent the whole day at home writing my negotiation paper so that I could hand it in this morning and come hear Tony Blair speak)

If we want a unifying global governance there must be fairness and justice. One of the reasons I wanted to take this role on of special representative in the Middle East, which most of my friends are skeptical about, is if we want to demonstrate to people in the faith of Islam that we are fair, we must deliver the Palestinians a state.

Peace in Ireland: actually what happened was Ireland became prosperous in the EU; the people of Northern Ireland decided they wanted that prosperity, a new generation impatient with the violence; global influence in solving an unsolvable problem. I also learned about the shrewdness of the Irish—we had the first child born in 10 Downing Street in 150 years; you have to wonder what the other Prime Ministers were doing in there—Irish politician chatting with him about the wonderful thing, new addition, what are you going to call him, lovely. I saw him again months later after my son was born. He had a wonderful suntan. I asked, where did you get it? He said, well, I have to thank you, it was due to that conversation we had a few months ago. The bookmakers were offering very good odds about the name of your child.

Joel's note. Other question to ask: what is your fee for speaking today? Who is paying you?

Joel's note. he converted to Catholicism when he retired. was anglican. allegedly talked to the pope about it. I wonder if he was able to negotiate a special Catholic package for himself. Get the pope to throw in a few indulgences.

Time of talk: about 42 minutes. On to Q&A.

Q: Can you list two or three things G8 has solved? A: there was a $20 billion program of nuclear cleanup after the collapse of the USSR, funded by G8. Very little proliferation has come from former Soviet bloc. Also 2005 Eaglewood summit on Africa. But there's no point in a hundred countries signing a global treaty on climate change if it doesn't include the US and China. I actually think there is a lot we can do around an informal G8 type of mechanism. Can get a lot done with frank meetings without all the bureaucracy attending.

Q: Only one question? "yes." "Please spare me 3?" "you're negotiating? two" "two and a comment." There's intelligence there may be a Tony Blair school of governance. also a question about civil servants or China or openness, I missed the details. A: Not a school, but you're right I think governance is very important. Many good schools already. I agree that there should always be movement towards greater openness.

Q: There's a story that when Bush assumed power you asked Clinton for advice, and he said be his friend. Was that good advice, and what advice would you give the president. A: I think it's a good idea for British PMs to get along with American Presidents, but Clinton did say that. Not a fairweather friend. I am arguing today for a broad agenda; our Western agenda would be far more effective if we were leading the way on climate change, middle east peace, etc. You never ever want a weak American president in the White House, you want someone prepared to be tough when toughness is needed. I noticed several times in the last few years that countries were going to do something but didn't because of a tough person in the White House. I realize defending Bush isn't popular around the world. I don't regret taking the decision to stand shoulder to shoulder with the United States. Thing could have been done differently etc but I stand by my decision. (scattered applause)

Q: How do you reconcile between ?? missed it, and the art of leadership is saying no instead of yes, when yes is easy. A: Thank you for summarizing my speech back to me, you have a future in politics. I learned as a leader you can't please all of the people all of the time. At the end of it I was trying to please some of the people some of the time, but .... Everyone wants more spending on social services and nobody wants to pay more tax. One of the most effective speeches I ever heard in politics was made by a Republic at the 1980 convention to nominate Reagan. This guy got up and said, when did the Democrats ever say no to anybody. "listen to the people", yeah but sometimes they disagree and you have to lead. The time to trust a politician most is when they're telling what you want to hear least.

Q: I'm a reporter from the Straits Times. As the middle east envoy, you said ... the gulf between intentions and abilities. You wrote in an article on values that America is sometimes a difficult friend to have. Can you enlighten us on that. A: I don't think saying the US is a difficult friend to have is a wildly controversial statement. US is the global superpower, it's always going to be difficult to be alongside, but it's always better to be alongside. Whatever criticisms, the basic strengths are still there. Are people trying to get into it or out of it. People are trying to get in, not just because of the economy, because of the constitutional freedoms.

Q: On the case of Iraq, after 1 million displaced, ... are you still as assured of your position today as you were 4 years ago.A: I think I'll disappoint you with my answer, which is that it's good that Saddam is out of power. People say why did you go in there; if they drive us out of Iraq through terrorism, they then drive us out of Afghanistan; if they learn our will is in inverse proportion to theirs, then I tell you we're in for a very very long struggle indeed. It's tragic that many people are dying but we'll never beat them by giving in to it or letting them say we're causing it. They've elected their government and should be allowed to have it.

Q: I'm from Nigeria. You mentioned Africa in your speech. What is your advice for those of us who want to be leaders in Africa?A: The best thing is that, I'm delighted people like you are coming to schools like this, so you can go back and be leaders. One of the basic things we need is non-corrupt government in these countries. People like yourself going back to Nigeria and playing a role in politics ... there is a lot to be done in respect to governance; I sometimes think we would be better off in the Western world focussing less on aid and more on helping with governance.

Q: Do you think too many countries are involved in the Israeli-Palestinian conflict? will it easy as you described in Ireland? A: The problem is those who can help solve it have tended to step back and those who can exploit it have stepped forward. We need the US to step forward and the arab states, and create the two-state solution. The capacity issue for the Palestinians is as important as any other single thing. Negotiating the terms is not impossible; you could put an average group of educated Israelis and educated Palestinians together and get the same agreement worked out. The problem is you work the matrix of security concerns, Palestinian capacity, Israelis lifting restrictions, create a space in which a state can come about. The viability of the Palestinian state to govern itself.

Q: This is a question punted by LSE president. Will you be president of EU? A: we'll move swiftly on, shortage of time you know

Q: Will Europe accept other permanent members on the security council A: If you make the nations more representative, it'll have to happen. we're in a different era today than in the postwar period and we in Europe simply have to accept this.

Q: Something about corruption. unintelligible question. A: answered with other question before.

Q: Leadership: who is going to take it and what kind of leadership will be taken? (sadly, the questioner after asking that verbatim added a bunch more sentences. Finally dean tries to cut him off. Note that the last six or seven questions were asked in sequence and then answered all in one go, which is a good system because it produces a sense of urgency which helps both questioners and speaker get to the point.) A: there will always be a role for hard power but it will always be possible to develop multilateral institutions. I actually learned a lot coming to Singapore for the first time back in the 1990s, this is a remarkable achievement. You were able to go out and forge a country for yourself. Britain needs some of this. we need to work out our place in the new world. we should be proud of our history but not limited by it. The real reason we won that Olympic bid here in Singapore two years ago is, we said London is a multicultural city, we're proud of it, we're not doing you a favor by agreeing to host the Olympics, we actually want you to come and see what we've created. And what you've done here in Singapore, your leverage economically and politically is so much more than it "should be" given the size and population, because you've thought ahead. The role of leaders is to think ahead and think what their place is now and in the future.

An open letter to the prime minister from Catherine Lim, a Singaporean writer who was chided by the last PM, in 1994, who told her to join a party if she wanted to express her opinions about politics.

Speaking about OB markers (which I discuss here; I believe the threat quoted in the textbook is the very one directed at Lim in 1994), she says

The second feature of the new model of governance is the systematic use of fear to silence existing dissident voices and discourage potential ones. While there has always been a climate of fear under PAP rule, the new model seems to have developed it into a distinct strategy of control, making special use of an instrument that has come to be known as the ‘out-of-bounds markers’. These are rules which stipulate what Singaporeans can and cannot say should they choose to criticise the government. The effectiveness of the markers is derived from their being deliberately left undefined and unexplained, for two obvious reasons. Firstly, it allows the government to have its own interpretation of each case as it arises, to suit its purpose. Secondly, since no one knows when or whether the markers are being overstepped, everyone plays safe by practising self-censorship, which can be a more effective curb than direct censorship.

Microeconomics

Last regular class. Tonight's presentations are on exchange rates by country. Some discussion of ratios; what does "1.45" mean when used to describe the cost of the Singapore dollar? Currency traders write "USD/SGD.....1.45" when one US dollar is equal to S$1.45. You can see how that can be confusing. Currency is so much fun because everything is relative, nothing's fixed. You can't say that A went up, you can only say that A/B went up. Imagine all the currencies floating in space, with nothing solid around. If they all drift "up" but one moves more slowly than the others, it actually drops.

Adding to the confusion are NEER and REER. NEER is nominal effective exchange rate; it's the exchange rate of A versus a weighted basked of other currencies. It's the closest you can come to talking about A without talking about A/X. It's A vs the crowd. REER (real effective exchange rate) is the same thing but each currency, including A, is adjusted for local inflation. Note that the rate called "real" doesn't correspond to a real number that you could get at an exchange window. Timor-Leste's banking authority has a nice explanation

China. The yuan dropped dramatically from 1980 from 1980 to 1993, as measured against the dollar, against a basket, or against an inflation-adjusted basket. The rate against the dollar has been fixed or nearly fixed ever since, but the real and nominal rates have fluctuated.

Chile has tried many different exchange rate policies. When the inflow of US dollars started to decline in 1982/83. Huge recession; real exchange rate plummets due to high local inflation.

Malaysia. Huge shock in 1997 as the ringgit plummets by every measure. About 3 minutes into a 5 minute presentation, after much discourse, the first of two partners says "I'm going to start with ...". Sigh. What's the secret to public speaking? Practice. This is the very last class presentation of the semester, and it ends up going 8 minutes. Is there the slightest hint that anybody's practiced for any presentation all semester long? Nope. The second partner for this presentation started at 4:30. Minute seven is too late to offer "a short explanation of short selling". This is the same pattern that shows up in a lot of papers: asked for a two-page memo, many produce four or five. I wonder how much this reflects peoples' work habits? Do most produce big brain dumps on every angle imaginable to prove mastery of the subject? This is the absolute opposite of my style, which is to try and find a handful of important points and ignore the rest. Maybe that's a project manager's instinct to rein in scope at all times. The secret of prioritizing is not in what you make number one, it's in what you choose to ignore.

Of course, looking at another group's report for the Taxi medallion case, which is light years better than my group's, with better research and a more economics-oriented analysis, plus colored charts and graphs!, I can see the drawbacks to my approach.

My question is, if a central bank has to intervene and spend billions of dollars of foreign reserve, did they (the bank or the government) just lose most or all of that money? Did the country just become 30 billion dollars poorer? I didn't get a direct answer when I asked in class, though the prof helped clarify the difference between buying foreign reserves and selling them. Buying foreign reserves is nice: your local companies, having sold a million dollars of widgets to Americans, comes to you (the central bank) with a million US dollars and you can just print some local money and give it to them. Free money (okay, there are some inflation issues and whatnot ...). But if you have to spend your rainy-day US dollars to prop up your rapidly depreciating local currency, you are not exactly losing the wealth that your reserve embodies, but you are exchanging for ... rapidly depreciating assets. So I would assume that a good chunk, if not all, of the foreign reserve spent during a crisis is indeed lost forever.

So China is buying huge amounts of foreign money every day. Why isn't its inflation sky-high? The central bank issues bonds to "sterilize" the new money. That is, if Chinese exporters go to the central bank with US$10b they made today, the central bank gives them CNY75b and also issues almost CNY75b in bonds at the same time. So the people buying the bonds give the central bank CNY70b, and the total money supply stays fairly constant. In 20061H, China sterilized 88% of inflows. So the money supply in China stays fairly level (mostly—see also here), keeping inflation low as China's economy continues to explode. But the foreign account balance remains way out of whack, pissing off the US. Now the central bank holds US dollars, but owes renminbi; if the US dollar drops vs the renminbi, which it pretty much has to in the long run, the central bank will lose a lot of money. I imagine China's thinking on this future problem is, some currency problems in the future are a small price to pay, and a small problem to have, if it helps us industrialize the whole country. So, if I have this right, the US is getting huge amounts of cheap goods from China (and outsourcing the pollution required to make those goods to China) in exchange for some cash and expertise now and lots of IOUs on future US production (US Treasury bills); in exchange China is getting the cash and impetus to modernize. Even if the US debt to China ends up getting paid at a discount, it seems like both countries still come out ahead.

Microeconomics

A classmate gives a special presentation on the self-regulation model on construction in Singapore. The problem for regulators is, if you miss something, it's really hard and expensive to fix a finished building. So you take a long time to carefully check all the plans and demand lots of changes. And you probably still miss something. So it's not a great system. The notion is to get the contractors and engineers to self-regulate. Unfortunately, I couldn't identify from the presentation the specific things that Singapore does to make this work and avoid the obvious fox/henhouse problem.

Imperfect and asymmetric infomation. Dealing with moral hazard. Some solutions include deductibles, health screening for insurance. Regulatory role in markets. Improve transparency; limit secrecy.

Adverse selection. In markets with asymmetrical information and a mix of good and bad products, you end up with bad products taking up a disproportionate amount of the market. (Joel Spolsky claims this has already happened in the programmer job market, where the good programmers are rarely on the market but the bad ones get recycled there every few months. Based on my experience hiring, I can't disagree.) Charts and graphs ensue. Extended warranties as hard-to-fake signals of car quality. Caesarean rates in Brazil: as high as 98% in private hospitals.

As much schadenfreude as I get from this story of conservative authors suing the ultra-right-wing Regnery press, what prompted me to post is the quote below. The authors accuse Regnery of selling books very cheaply to wholly owned subsidiaries such as the "Conservative Book Club", thus reducing the royalties paid to authors.

"The difference between 10 cents and $4.25 is pretty large when you multiply it by 20,000 to 30,000 books," Mr. Miniter said. "It suddenly occurred to us that Regnery is making collectively jillions of dollars off of us and paying us a pittance." He added: "Why is Regnery acting like a Marxist cartoon of a capitalist company?"

I love the cognitive dissonance. The thought process implied here starts with tribalism: "everyone in my tribe is good and everyone in your tribe is bad", taken to the next level: "everything bad is in your tribe". If a conservative business is acting poorly, by definition it's acting non-conservatively. E.g., it's impossible for anything sharing my ideology to be bad, so it must actually have your ideology. It must be a betrayal.

Any similarity to the mainstream conservative thought these last years, or to the stabbed in the back meme, is no doubt coincidental.

• Due Monday (and completed): 3000 word research paper for SMIG (States, Markets, and International Governance). Mine was on the power struggles between state and non-state actors in the case of the Great Firewall of China and circumvention attempts. What does it mean, if anything, if the CIA funds private companies or non-profits to help Chinese citizens read the internet? The answer is good for 35% of the class grade.
• Due Wednesday: eight-slide presentation for microeconomics. This is done with in our G3s, and happily my two partners were more on top of it than me. Our case was competition and the New York City taxi medallion market. This is 99.5% done as my G3 bats it around one last time.
• Due Friday: ~2500 word paper for Negotiation. My topic is mismatches in negotiation styles. Cannot discuss the quantity of work done on this paper to date.
• Due next Monday: first draft of field study for Theory and Practice; this is in our G5s; my group studied the Food Control Division of the Agri-Vet Authority. They were very generous with their time and gave us three rounds of interviews.
• Due some time next week: Negotiation journal; 1500 word paper on our country graphs for microeconomics (that's in our G2; this is the Vietnam import/export graph with which we got help from the former Thai finance minister. That citation's going to look pretty good :).)

On the one hand I wish these assignments were better staggered; on the other hand, many of them were until students begs for postponements, and it's not like anything kept me from finishing them weeks early. I had a great first six weeks this semester and then started running out of steam. Time to finish strong. And thank goodness for classmates whose energy complements my laziness.

Naomi Novik, Empire of Ivory
Book four of Temeraire. More of the same. Perfect! (This series cannot be described any better than EW's blurb, "This book is for anyone who's read one of Patrick O'Brian's nineteenth-century-set naval adventures and mused, You know what would make this better? Dragons.")

Vikram Chandra, Sacred Games

Just as his first book, Red Earth and Pouring Rain, was utterly accomplished, so does his second book, a decade later, feel like a worthy mid-career work of an absolute master. Chandra dials back the multi-layered storytelling to merely overflowing, and gives us a fairly straight story of organized crime and police in Mumbai. Spoiler: just one little bit of a taste: pages 838 to 876 contain a rich and convincing complete life story, with a background of classism and racism in a town in rural India, of a character who was nameless during his brief appearance in the main story many hundreds of pages before. This little novellette was so good it would have been worth reading 837 pages of junk just to set it up. This was easily one of the best books I read this year.

Cecelia Dart-Thornton, The Lady of the Sorrows.
I have fond memories of reading "The Ill-Made Mute", by Cecilia Dart-Thornton, so I picked up its sequel. Apparently those memories are quite vague, because the only parts of the recap that rang a bell were that the protagonist had been mute and disfigured but got fixed by the end of the book. Within a few pages I was reading this:

It was difficult to sit still inside the house of the carlin, within walls, and to know that Thorn walked in Caermelor, in the Court of the King-Emperor. Now the renewed damsel was impatient to be off to the gates of the Royal City. At the least, she might join the ranks of Thorn's admirers, bringing a little self-respect with her. She might exist near him, simultaneously discharging the mission she had taken upon herself at Gilvaris Tarv: to reveal to the King-Emperor the existence of the great treasure and—it was to be hoped—to set into motion a chain of events that would lead to the downfall of those who had slain Sianadh, Liam, and the other brave men of their expedition.

And it made every bit as little sense to me as it must to you. I was reading gems like this:

The long tables, loaded with dinner service, made the High seem by comparison austere. Myriad white beeswax candles in branched candelabra reflected in fanciful epergnes of crystal or silvered basketwork, golden salvers lifted on pedestals and filled with sweetmeats or condiments, sets of silver spice-casters elaborately gadrooned, their fretted lids decorated with intricately pierced patterns, crystal cruets of herbal vinegars and oils, porcelain mustard pots with a blue underglaze motif of starfish, oval dish supports with heating-lamps underneath, mirrored plateaux and low clusters of realistic flowers and leaves made from silk.

Maybe I've been buried too deep in academic papers, but when I see prose like that I expect to see footnotes and a bibliography. By the time I hit this on page 32:

Thorn!
But no. Of course not—it was just that she had not been expected to see a tall figure wearing the subdued Dainnan uniform here in the palace suites, where braided liveries stalked alongside jeweled splendors. This man with brown hair tumbling to his shoulders was not Thorn, although he came close to him in height, and if she had not first seen Thorn, she would have thought the Commander exceedingly comely. He was older, thicker in girth, more solidly built, his arms scarred, his thighs knotted with sinew. At the temples his hair was threaded with silver. Proud of demeanor he was, and stern of brow, but dashing in the extreme.
The warrior leader's hazel eyes, which had widened slightly at the sight of the visitor, now narrowed. Somewhere in remote regions of the palace, something loose banged peevishly in the rising wind.

I think that was probably when I gave up any hope, and it was probably about 30 pages too late. Sadly, I spent many minutes that afternoon waiting for a night bus (d'oh) with only that book for company, and was driven by desperation to read as far as page 70 or so. I guess the silver lining is that, with a better book, I might have waited the full three hours until the night bus service started.

Professor Moon Chung-In, Korea's Ambassador for International Security Affairs, gives a seminar on the topic of the Korean summits. "I" refers to Prof. Moon unless otherwise noted. I confirmed with Professor Moon at the end of the seminar that all of his remarks were public.

Invited to talk to the East Asian Institute to "rekindle" interest in Korea in a China-focused department. Joel's note: He's on a first-name basis with Dean Kishore, of course (a former ambassador). I should have a blog category just for Kishore.

I've been to North Korea seven times recently. Went to the first and second summits (in 2000 and 2007). To get from South Korea to North Korea, we have to go to Beijing and take one of the twice-weekly flights to Pyongyang. But recently we drove with special permission and it was less than two hours.

The first summit was just for the two leaders. We 32 other delegates were behind a plane. But the second summit we all shook hands with Chairman Kim. No outside leader had received the same reception; it was like a Tiananmen square welcome.

Joel's note: I hear lots of symbolic things but he's not describing very many substantive changes. The first point of the 2007 declaration is to implement the first declaration. Some more contact for separated families.

At the first summit, the people invited were the vice-marshal, party secretary, member of national defense commission. All elders. At the second summit, there is an agreement to have meetings in Seoul. The North Korean defense minister sat next to the South Korean defense minister. Vice-minister-level South Koreans who are part of the six-party nuclear talks were invited to the head table (breaking hierarchy). President Roh asked why, and Chairman Kim said, you're so interested in nuclear things, this way they can ask questions. Three men known to be "the most powerful military men in North Korea" were also invited. This is a sign that Chairman Kim is really committed to implement the summit resolution.

President Roh's agenda: peace (including denuclearization, peace treaty), common prosperity, new horizon for unification. Reminded Kim that both parties signed an agreement to keep the entire Korean peninsula non-nuclear. Kim didn't reply directly but invited Roh to listen to the report of the North Korean delegate just back from meetings in China. Some back and forth but Roh is optimistic that North Korea is serious so far. Agree to have a summit to end the Korean war. Roh conveyed Bush's message from Sydney about declaring an end to the war—provided North Korea makes progress in denuclearization. Kim replied with interest, "but it's very complicated". Discussion about if it's a three- or four-party discussion; the fourth party would be China. In 1953 the president of Korea didn't sign the peace treaty because he wanted Truman to invade North Korea; refused to sign the peace treaty as a protest. The UN commander (US admiral, but not on behalf of US) and "Chinese Volunteer forces" signed the armistice agreement instead.

As you know North Koreans are linguistic nationalists and refuse to use Chinese characters. But at North Korean insistence some Chinese characters were included in the declaration. They mean (I think he said) "mutually beneficial, complimentary relationship".

South Korean shipbuilders would like to cooperate with North Korea to better compete in low-end market.

Unification predicated on de facto, not de jure. Will have more meetings more frequently, prime minister talks. EU model.

So, some progress with the second summit, but some issues remain. Trust. North Koreans suspicious of economic zones and openness. North Koreans are willing to change without using the word of "change". But Americans, and some conservatives in South Korea, cannot accept it.

Virtuous circle between economic cooperation and peace. But what if vicious cycle emerges? Too much polarization in South Korean politics - what if conservatives repudiate agreements that liberals reached. America matters. We admire Bush's courage in changing policy—he has learned by trial and error. But if there are problems like 2002, things can go back to chaos.

Joel's note: my question, if I get to ask it: 'Observing from the perspective of US domestic politics, my understanding is that 1) Bush rejected Clinton's policy in favor of tough talk; 2) North Korea used the time to make nuclear bombs; 3) Bush returned to Clinton's policy and now we're basically back where we started in 2000 but with more nukes. How accurate is that description? ' Hrm, that's a long-winded question. 'How effective has Bush's policy towards North Korea been?'

Q: Is Japan becoming marginal in six-party talks. A: ... . Japan has asked the US not to remove North Korea from the terrorist list unless kidnapped citizens are returned. During the honeymoons with Bush/Koizumi and Bush/Abe, US and Japan were a two-party group blocking the six party negotiation. Now five want it to move forward but Japan is alone blocking it.

Q: what is the difference between the two parts once they are unified? I'm not as optimistic as you are about unification because the two parts are so different. Unification may be symbolic only unless North pursues market reforms. So, will Korea change their whole system as China did? A: North Korea cannot pursue reformation like China, because North Korea is the center of the universe and Kim Jong-Il is a star in the sky. He cannot learn from others, others should learn from him. It's a serious problem—we have to understand how they think. Unification like Germany, by absorption, is impossible. I visited seven factories in Pyongyang in May and I see clear changes. Officially, Kim doesn't want to follow the Chinese model but internally, please come and pursue the Chinese model. The problem with American policy makers is they don't give a shit about this duality of Korean thinking; they just take what they say at face value. You know why they are having a hard time? Because they virtually killed Asian studies everywhere.
You can tell how long North Koreans have been in the Kaesong economic zone; one week, still North Korean, six months, dress and makeup like South Korean. We have to handle North Korea with care or there will be very negative consequences for the peninsula and north-east China.

Q: I've studied German integration and I'm more optimistic about Korean integration. Your efforts are more realistic than Bush/Samuel Huntington who are killing themselves with their actions.

Q: What about the stability of North Korea? A: I reconfirmed the power of the Defense Commission. North Korea is ruled by the National Defense Commission, not the Party. Even if one of his sons succeeds him, the military will rule North Korea. The North Korea specialists in China believe in stability; US-trained analysts are more panicked. Amateurs like Mark Showl (?) and Nick Eberstadt worry about succession.

Q: Do you think Kim really decided to give up nuclear weapons? How will vicious cycle be avoided in six-party talks? A: It's better for us to assume that Kim has made the strategic decision to give up nuclear weapons. "curvilinear problem in regression" (J: ?) North Koreans do not have endogeneous intelligence production function. They rely on South Korea, China, etc. Kim Jong-Il reads reports from analysts that repeat outside opinions (literally: opinion columns are plagiarised for North Korean internal intelligence reports) about how North Korea will be changed after unification. Better to keep things moving and open and active, take what you can get as you go (my sloppy paraphrase). If you follow the rational choice argument, there is no end, no solution. The point is, we should go in two ways. We want verifiable and irreversible dismantling. We make progress; it could take ten years, but meanwhile we engage. North Korea wants elimination of hostile intent by US, US recognition of North Korean sovereignty, US non-interference, some US economic assistance. If those are met, North Korea will give up nuclear weapons. For vicious circle: we are bound by six-party system.

Q: What advice on China's antagonism to Taiwan? A: In Korea, the first and second summit talks changed lots. After the first talk, the North Korean people were no longer hostile, so the South Korean people are not hostile. Until mid-1960s their living standard was higher; until mid-1970s North Korea was more industrialized. There used to be hostility between us when we met outside of Korea.

Q: Does South Korea have the leadership to unify with North Korea? A: Even conservative party has a very generous deal for North Korea in their platform.

Q: What do North Koreans think about China? A: Dualistic. North Koreans don't trust China, especially since China normalized relations with South Korea. Both playing double-game.

Q: I'm very curious about Kim Jong-Il. His retention of power is beyond our expectation. Can you give us more details or inside information? A: He's been in power since 1994 but he's been preparing since 1971. Longest training period of any leader. (Joel's note: I guess Prince Charles won't lead anything.) Cultivated allies in the military, cabinet. Versatile. I introduced the president of the (public) Korean Broadcasting System (which at the time was banned from NK because of a negative series about NK) to Kim; something about competition with two other, private SK broadcasters; Kim said, "I prefer to watch state-owned television." He knows what's going on outside. One of the most knowledgeable leaders of all the leaders we met. He's a victim of structural rigidity created by his father. He's rarely in Pyongyang, touring the countryside. I learned (re the academic debate between structure and agent) that structure matters. He believes the "openness" is promoted by the US to undermine his regime but if American recognition and normalization is offered he'll take it.

Bretton Woods was an attempt to discipline international monetary policy, keep states from playing shenanigans, mercantilist stuff that hurts the system. Devaluation wars. Bretton Woods seeks a level playing field. Joel's Q: Given Stiglitz' tirade against rich countries' behavior, would he agree that Bretton Woods is really a level playing field? A: only if you were in the club. So fair within the OECD only.

Financial disintermediation. Instead of going through banks, borrowers and lenders go through the debt markets.

One place that globalization has unequivocally happened, almost everywhere, is currency. Most currencies float (more or less). Foreign exchange, capital, and debt markets thus have more power.

Who goes to markets? Governments. Corporations. Corporate raiders. Pension funds. In aggregate, mutual fund investors.

China is allowing mainlanders to invest in the Hong Kong and foreign stock market. This is an attempt to 1) diversify Chinese savings and 2) reduce the overheating pressure from excess savings.

History of rating agencies. Moody's is the first, starting in 1909 with railroad security risk ratings. There are actually over fifty ratings agencies but S&P and Moody's dominate. Joel's Q: Do rating agencies have access to non-public information? Yes. Open books, interviews, etc. You have to pay the rating agencies to be rated. They also rate countries. In the case of countries, they want to know what foreign currency income will be available to repay. Domestic income doesn't count as much. On top of ability to repay, willingness to repay.

Japan has created its own ratings industry in reaction to being judged by American standards (short-term view vs long-term view) and being downgraded (late 1990s? 2002?) by the main ratings agencies.

Q: what about the risk to the agencies of losing reputation? (Joel's notes: and why don't investors try to fix the broken incentive system, either by creating a rating agency that investors instead of lenders pay, or requiring borrowers to be rated by several different agencies so that they can't rating-shop). For the big crises, everybody gets is wrong so no single agency is hurt.

Joel's note: Looking at Moody's SEC filings (Lexis/Nexis is not a happy interface to Edgar Online). $1.2b revenue in 1H2007, vs $560m expenses. That kind of gross margin is software territory. About a third of their revenue comes from outside the US.

Class discussion of alternatives. Government to deal with market failure? Japan is trying that, but nobody uses the Japanese ratings. Hard business to get into because of all of the proprietary knowledge (then why are there over 50? Can't be that hard). Classmate: Agency Reform act of 2006. Joel's Q: Their power must be fragile since it's dependent completely on reputation. A: But they've survived getting the Asian crisis wrong, getting Enron and Worldcom wrong, now getting CDOs wrong. They all get dinged at the same time; and there's a need for the role they play. Classmate: why not government rating of rating agencies? They fight that very hard, but it's been discussed in EU recently and may happen.

Q: classmate question about investing in Bangladesh: Microsoft is there even though Bangladesh doesn't have a rating. A: different issues. The only connection is through PRI: political risk insurance, which is usually the sovereign rating plus a premium. Small market for specific kinds of projects. Note that this is an example of another extension of power of rating agencies: the credit rating (for individuals or companies or countries) are base values for many other factors, such as employability or car insurance or matchmaking).

Side note barely apropos: lots of charts and graphs about housing foreclosures.

Timothy J. Sinclair (1994), "Passing Judgment: Credit Rating Processes as Regulatory Mechanisms of Governance in the Emerging World Order," Review of International Political Economy, 1(1), pp.133-159.

• Bond-rating agencies have power. Horribly formatted file, hard to read.
• Rehash of Rosenau's definition of governance
• Finance has become disintermediates since the 1980s, which has caused information problems for those wishing to lend and borrow, and has disempowered traditional intermediating institutions and empowered credit rating institutions. Why? Bank debt is a hassle and shareholders want to pull strings. But now the lender is at more risk because the bank isn't there to insulate them.
• "bond vigilantes" in the bond market act to keep inflation low to protect their earnings. The size of the US debt gives them power over government.
• p 12: uh-oh, we're quoting Foucault.
• How important are they really? If people believe they are important, they are important. Rating agencies have power over corporations because, if they change the corp. ratings, the corporations' costs to borrow money will increase.
• Structural power because ratings have become part of the normal landscape of finance.
• Yes, there actually is a magazine called Euromoney.
• Short-term emphasis in US investing is because investors have little information to go on other than quarterly earnings reports. Oh really? In other countries there is more "patient" capital because of relationship-based investing.
• Ratings agencies are US-based but internationalizing. May export US economic orthodoxy.

Timothy J. Sinclair (2005), The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness. Ithaca, NY & London: Cornell University Press, 2005, pp., 50-71.

• Ten years later, his writing is more polished and more painful.

Joesph Stiglitz (2003), "Free to Choose?" in Joesph Stiglitz Globalization and Its Discontents. New York: W.W. Norton, pp.53-88.

• Rich countries and the IMF treat poor countries horribly. Details.
• Here's my 2004 review of Stiglitz' book.

Macroeconomics

Exchange rates. A bit of deja vu since we talked about currency markets in SMIG last week.

When a currency is pegged, you will usually have either excess demand or supply, which necessitates currency control, rationing, central bank buying, etc. Joel's note: what about the black market? Doing some digging to find estimates to see if the black market for currency is big enough to matter for the world as a whole (vs just mattering for specific countries). Hm. Black economies are 10% of the legal economy in the US; up to 30% in Europe; up to 50% in some Asian countries and about 70%! in Thailand, Nigeria, and Egypt.¹ Count this as one more big grain of salt to be consumed along with any GDP-based arguments. Still can't find numbers about black market size for currencies, though.

I did stumble across an article discussing the benefits of hiring undervalued black baseball players in 1947-1956. It finds that "the inclusion of an additional black player on a major leauge team ... resulted in an addition 3.75 wins per year [on average]" in the early 50s.² That's the difference between a utility player and a star, or a star and a super-star.

My question: We are looking at the yen/$ market in terms of supply and demand of dollars. Is this strictly the mirror image of demand and supply for yen (assuming there are only two currencies in the system)? A: yes. The supply of dollars is the same thing as the demand for yen. If I go shopping for yen with a fistful of dollars in hand, then I am by definition increasing the supply of dollars. There are only two parameters in play here, not four.

That C$20 bill I've been carting around in my wallet for a year, leftover from the 2006 Vancouver Folk Music Festival, is turning into a good investment.

Extended discussion of USD value (vs a basket), Nominal exchange rate for Sing$, and Real exchange rate for sing$, since 1980.

More side research on my black market currency question. Some Dutch government bankers noticed that there are a hell of a lot of Fl. 1000 notes in circulation and wonder what they are used for. They note that "direct questioning about possession and usage of Fl. 1,000 notes would, in all probability, have led to a considerable response bias." Hah. They tracked down (statistically speaking) 60% of the big notes; projecting from there, 25% of all Fl. 1000 notes in the Netherlands are used in the drug and gambling economies.³

The IMF now identifies eight different kinds of exchange rate regimes. The basic idea is to get the stability (for your businesses) of a peg without all of the expense.

After re-analyzing exchange rate regimes last century, researchers concluded that the official designations were little better than random.

Microeconomics

Game theory. Mechanism design: creating a system where, if each player pursues self-interest, the overall desired outcome is still reached. Isn't this what the Framers of the US Constitution were trying to do? Was that intentional?

I'm in a dangerous position in the readings for this class. The lectures come from slides prepared by the book author, so they don't just follow the book, they are the book. I read fairly carefully for the first six weeks, and skimmed after that. Classes have fallen well behind the reading (which for me was mostly material I was already familiar with anyway). Today's class is covering material that I think I read about two months ago. The danger is that I'll get too complacent, start treating material I'm familiar with as material that I have mastered, and possibly ignore some specific readings or other tasks.

Prisoner's Dilemma with Nash Equilibrium analysis. Prof's backstory is, "Greg and Susan are alcoholics, they break into a liquor store and get caught ...". I wanted to visualize so I googled "greg and susan" and this was the first good hit.

Discussion of Coke vs Pepsi led me to hunt for pictures of the 7-up guy (the original, not the Up Yours guy), who turns out to be named Geoffrey Holder and to have a whole very interesting life and career.

A cartel coordinating through phases of the moon. Apropos of nothing in class, Etorphine.

Strategic move: an action to influence beliefs or actions of other parties in a favorable way. Example: a lithographer breaks her plates to guarantee that the limited edition stays limited.

History of Sprint. Actually dates back to 1899.

Bibliography

Some of my sources are in JSTOR, which is a closed database. Information wants to be free! because I'd rather link than cite. It's easier.

1. Shadow Economies: Size, Causes, and Consequences, Friedrich Schneider; Dominik H. Enste, Journal of Economic Literature, Vol. 38, No. 1. (Mar., 2000), pp. 77-114.
2. Employer Costs and Discrimination: The Case of Baseball, James Gwartney; Charles Haworth, The Journal of Political Economy, Vol. 82, No. 4. (Jul. - Aug., 1974), pp. 873-881.
3. The Demand for Large Bank Notes, Willem C. Boeschoten; Martin M. G. Fase, Journal of Money, Credit and Banking, Vol. 24, No. 3. (Aug., 1992), pp. 319-337.

Blogging from a lunch seminar. I would have skipped this one but they invited me to attend a smaller lunch group after the talk, so by the free food principle¹, here I am. Seventeen minutes late, because I screwed up my notes and went to the wrong place, plus this was a rare noon start instead of 12:15. There were no seats left when I got there, and then a handful of classmates (presumably also used to 12:15 start times) filed in, and so a three or four brightly robed Thai (I think) monks got up and left. That's either an excess of humility or an act of self-preservation, since the full title of the event is:

The Bukit Timah Dialogues... on Leadership
by Prof Neo Boon Siong, Director, Asia Competitiveness Institute, Lee Kuan Yew School of Public Policy and author of Dynamic Governance

You could win a game of buzzword bingo from the title alone. We've been reading parts of Dynamic Governance (see my notes) for Theory and Practice, and while it has some interesting details and history of the Singapore government, I found it hard to read given the relentless positive regard for Singapore and excess verbiage.

The lecture doesn't seem to present anything new relative to the book. The book, in turn, basically said "things change and government should change too." It's like watered down Thomas Friedman. The current slide has the following words, in boxes and lines and arrows: "dynamic governance, execution, adaptive policies, change, conceptualize, thinking ahead, insights, fit, future uncertainties".

A slide with the complete Dynamic Governance System framework. This does actually present some specific notions. Same ground as the stuff I looked at for class, so see those notes. It's a collection of good habits for any decision-making system.

Q: Studies show Singaporeans are unhappy, despite relative wealth. So why is the government building a casino, which people indicate they don't want; it's surprising that that's the result of dynamic governance rather than just following the old prescription for economic growth. A: happiness depends on expectations, not reality. How do you overcome the complacency that can set in if you don't have a sense of urgency and potential calamity that can happen any time. Is this adaptive thinking? It is in the sense that you are introducing something to the system that has been constantly rejected. At some point it will probably be not good enough. have we reached that point? Maybe soon.

Questions about how to adapt dynamic governance to India.

Q: Government decided to have casinos despite opposition. Government decided to keep section 377a (banning male gay sex). So who determines the values of a society? A: I was not privy to those discussions, I can't defend them. At the end of the day they pay a political price. (Joel's note: The PAP's been in power since the 1960s. To a first approximation, they've never paid a price. Of course there have presumably been setbacks and limits here and there, but still: if you never lose power, you never really paid a price.)

Update: lunch was good. As if to punish me for my insolence, my vegetarian lunch was placed at Prof. Neo's right hand. There were about 12 people, mostly students, and we had a nice chat; a little about his book, the Singapore government, the experience of returning to your home organization after going away for school (which I suggested might be something like consulting: you are desired for your (expected) special knowledge or skill but resented for being a know-it-all outsider), etc. Prof. Neo's knowledge of the Singapore government is much more engaging at a personal, chatty level than in the context of a textbook

1: That would be, "never turn down free food when you're a grad student."

Ethics.

A great case study this week. A local official in an Indian district tries to stall a corrupt land deal without losing his career. The steps he takes to stall the deal include:

1. ordered that the land be surveyed, but directed the survey to Survey of India, which he knew didn't do land acquisition surveys
2. When the Survey of India said they would need special permission, he applied for it, knowing it would be rejected
3. Under pressure, applied to a different survey body (controlled by corrupt interests)
4. told the new survey team that they would have to wait until his own office was ready to join them on the survey
5. Appealed to another clean officer, who was unable to help
6. The survey came up with a different number of total acres than the original proposal, so he wrote another letter
7. After the acre issue was dismissed, he pointed out that the legal process had not been followed in the proposal.
8. In response, the district secretary sent a letter invoking an emergency power to acquire the land
9. He destroyed the letter and did nothing.
10. The corrupt deal sponsor followed up, and he said he was waiting for the government.
11. The government responded with another letter. He sent it to the office to file under "put it up to me again after I return from leave" and then went on a pre-arranged month vacation
12. When he came back, he had only 2 months to reach a 2-year tenure milestone. He then wrote a letter to the district secretary using the word "scandal" many times.

The corrupt deal ultimately went through five years later.

An Indian classmate assures me that this case is nothing special and says he has personal experiences to match.

Class notes

A classmate relates a story where he was given responsibility to disburse some money; to avoid some corrupt supplicants he was smuggled out of the building in another person's car while a decoy drove his car. An administrator finally caught up with him and threatened punishment, which he escaped through appeal to ethnic ties. Then he had to hurry to spend the money on legitimate programs before it was looted. This event prompted him to leave government service.

Another classmate recounts a story involving land seizure which would displace many people. Forced to arrest many protesters.

Classmate: Einstein: everything is relative; Gandhi: remember the face of the poorest person you are responsible for.

N.B.: My father blogged the trial of Tom Anderson, an Alaska state legislator who was convicted this summer in a corruption case. He is a former student of my father, who taught public administration in Anchorage for most of my life. He was member of the Corrupt Bastards' Club—they had hats and everything. There have been several federal corruption trials in Anchorage this year, and both Senators and the state's sole Representative are all under investigation, though only some of them have been connected to the Corrupt Bastards' Club. Apparently the others were independently corrupt. I have the feeling that ethics was only a small piece of the problem.

Here are some more subtle forms of corruption (from class slides):

• Misrepresenting results of analysis
• Working for a third party/narrow, sectarian interests
• Pursuing short-term agendas with long-term negative consequences
• Shortchanging implementation concerns

How can you judge value conflicts in your professional life?

Note that there is an opportunity cost to fighting corruption; especially if you won't have any real impact, is it a good use of your time as a public servant, compared to other things you could be doing?

The class split into three parallel courtrooms to try the Deputy Commissioner from the case study. In our group, the DC was found not guilty of corruption and ignorance of law, but guilty of negligence. Punishment: 2 years observation and no promotion. Main factor: didn't want to set a precedent of allowing insubordination, even in good faith.

Second group: the judge says, "the defendents came out with very poor support". Guilt on charges but exonerated by judges.

Third group: innocent until proven guilty. Tearing up the letter was illegal but not corrupt. Should be fined. Did not discuss if he should suffer career consequences.

Motives. End and means discussion.

If you say that he's innocent, you might enable other people in the civil service to exercise too much power but for less noble reasons. But if you find him guilty, you may discourage these brave whistle blowers. Can you be more precise in judging his actions?

Exit/Voice/Disloyalty as a Venn diagram. Differs from Hirschman's book (or at least the beginning, which is as far as I got reading it), in that Hirschman's model has only two choices for unhappy workers, exit and voice. This diagram adds disloyalty.

Considerations for whistle blowers:

• Is the conflict legitimate and important?
• Will your response be effective?
• What will your action cost?
• What is the long-term effect on people of conscience in the organization?
• Will you violate professional trust, ethical codes, or contractual or legal obligations?

Here's why you shouldn't be a whistle blower.

David L. Levy and Aseem Prakash (2003), "Bargains Old and New: Multinationals Corporations in Global Governance," Business and Politics, 5(2), pp.131-150.

• I had to share this choice quote with you, the apotheosis of ismism.

  From a rationalist utilitarial perspective, private actors can be involved in strategic bargaining and their impact can be undersood as helping to shape the incentive structures facing governments and nongovernmental actors. From a social constructivist perspective, private actors can be influential in normative deliberations that determine the appropriateness of alternative courses of action, whether these are NGOs and transnational social movements interested in social justice or business groups mobilizing around a hegemonic ideology.

  We can use this as a template to project ismism to other, more familiar domains. Like baseball.

  From a batterist perspective, pitchers can and should be involved in pitching to batters and their impact can be understood as helping to determine what pitches the batters will be facing. From an intangibleist perspective, pitchers can be important in promoting team chemistry and teaching rookies how to be the heart and soul of a team, whether they are left-handed relievers with post-season experience or right-handed veterans looking for World Series rings.

  Coming soon (after as I catch up on my two papers due in two weeks): if International relations theorists were baseball pundits.
• MNCs develop preferences: that implies they have enough power that their preferences matter.
• Regime theory from the MNC perspective.
• three hypothesis: decline of westphalian state, decline of regulatory state, race-to-the-bottom in regulatory standards as MNCs venue-shop
• emergent institutions: this may be the first time the word "emergent" has been used in class, a word I've been keeping an eye out for.

Michael C. Webb (2006), "Shaping International Corporate Taxation," in Christopher May (ed.), Global Corporate Power. Boulder & London: Lynne Rienner, pp.105-126.

• Followup on Transfer Pricing: has a reputation as a means for tax avoidance. I learned about transfer pricing at my first job, Treasury Services Corp, which made analytic software for banks. It's always struck me as as a really sound, if somewhat sophisticated (non entry-level) accounting idea: if one part of an enterprise (a company, a government department, etc) provides a service to another part, the internal customer should have to pay, at least in the accounting, and the service provider should book revenue. Otherwise you will get all kinds of bad planning, such as thinking that work that your in-house staff can do is "free" compared to hiring contractors. But is tax avoidance the only thing people think of when they hear transfer pricing? That would be a shame.

  Aside: I was so young and stupid at that job. It was only years later that I made the connection between the software module we sold called, I think, "Profitability Measurement," and the dehumanizing practice at banks and other places to treat customers differently based on how profitable they are.

  Second aside: if you google for "corporations avoiding taxes", half the links are angry bloggers and the rest are how-to guides.

fx trading is huge and untaxed.

David Bartlett and Anna Seleny (1998), "The Political Enforcement of Liberalism: Bargaining, Institutions, and Auto Multinationals in Hungary," International Studies Quarterly, 42, pp.319-348.

• Hungarian state stood up to auto manufacturers and created a generally fair, successful situation instead of a private playground for manufacturers. For example, Suzuki set up in Hungary in order to provide locally built cars that would be cheaper than imported, taxed cars. But then Hungary set car import tariff at only 8% instead of 25%.
• commodities traders as a face of private sector instead of MNEs
• regulatory capture costs about US$200,000. (Myanmar?)
• can't you get well-behaving (for society) corporations through transparency and regulation?
• Corporations are a flawed design for civilization. (I think that's my phrasing but inspired by a classmate comment.)
• classmate protest: if it's really that bad, the state will take the power back (example: firefighters)
• Parallel between Nazi germany corporatization and the corporations in the Phillipines during Marcos, or the corporations in Myanmar now with the junta.
• natural monopolies: do technologies create new natural monopolies? gas, power, communication, could not be monopolies 200 years ago because of localism.
• green investors, "triple bottom line accounting"
• Blurring the lines between states and private sector. military-industrial complex, Carlyle group. halliburton. mercenaries.
• incursion of private sector into activities traditionally reserved for the state. military, education, ...? (what are the classic five again? Military, education, courts, police. ...?

Susan K. Sell (1999), "Multinational Corporations as Agents of Change: The Globalization of Intellectual Property Rights," in A. Claire Cutler, Virginia Haufler and Tony Porter (eds.), Private Authority and International Affairs. Albany, New York. State University of New York Press, pp.169-198.

Describes the sequence of events by which twelve corporations, over a decade and more, got nations to create and enforce new international and national laws to protect their intellectual property interests. Hints that this may be a bad thing. Doesn't mention Disney, which may have missed the original wave of corporate machinations but has been a big player for at least the last ten years.

Debora L. Spar (1999), "Lost in (Cyber)space: The Private Rules of Online Commerce," in A. Claire Cutler, Virginia Haufler and Tony Porter (eds.), Private Authority and International Affairs. Albany, New York. State University of New York Press, pp.31-51.

A mixture of straightforward analysis and questionable predictions. The author seems to assert that "e-cash" must be developed and widely accepted before e-commerce can take off. Another good one is that organizations like BSA and SPA "seem likely, before long, to develop effective means for creating and even policing intellectual property rights." BSA and SPA are fronts that the big players (Microsoft) use to legitimate their shakedowns. Although I guess that does constitute of form of policing intellectual property rights, in its own special way.

Susan Strange (2000), The Retreat of the State: The Diffusion of Power in the World Economy. Cambridge, Cambridge University Press, pp.44-65 & 91-99.

• p 44: Biggest change in politics and individual lives: the change in the production structure of the world economy. The increase in market sizes has made TNCs (the latest TLA for MNC, MNE, etc; oddly enough there's a useful-looking chart of the differences buried in this article).
• p 45-6: more about how TNCs have been delegated power by states, states aren't going away, etc
• Three trends in international production.
  • p 49: states used to see TNCs as problems and nationalized some companies. Now the trend is reversed.
  • p 50: really international, not just US
  • p 51: shift from manufacturing to services
• p 51: Drucker suggests (1990) that 1/3 of total extra wealth in the last 50 years has gone to extra material goods; 1/3 to more leisure for 1st world; 1/3 into improved education and health care.
• p 53: power is the ability to influence outcomes. Politics is "all activities by which others are persuaded or coerced to collaborate in the achievement of aims designated and desired by another". I like the substance of that definition but wonder if it could be more pithy. (consider "the continuation of war by other means" pre-emptively rejected). If you look beyond international security outcomes, TNCs clearly have real power.
• p 54: four hypotheses: TNCs have taken market power from states; TNCs have done more than aid organizations in the last decade to redistribute wealth. TNCs have taken some labor-market power from states. TNCs have started escaping state taxes on profits.
• p 91: non-state power.
• p 93: different kinds of authority.
• p 94: uncritical approval of any kind of international cooperation, regardless of its final impact on the public, is a bad habit of liberalism
• p 95: lists of different kinds of authority the author is not qualified to discuss. Religious. Transnational sports authorities (WADA anyone?). "in baseball, US authorities dominate others but have to cope with players' organisations that are effectively a labor union." Um, 'effectively'? Guess what the first word is in the Major League Baseball Players Association History page? "Unionization". MLBPA isn't just 'effectively' a union, it is in legal fact a union. I guess Strange is just proving her point about her qualifications.

A professor told me last week that he thought Chopra (our administrator, Colonel Chopra) would have been hurt to read himself described as scary. I don't spend much time blogging about blogging, but I thought this might be a good time to talk a bit about why and how I blog.

I blog because it satisfies me to think that I am helping, informing, amusing, or at least providing warning by example. A number of factors constrain what I say. I don't blog about my private life, which you might think would be a tautology until you read what people put out there. Sometimes a tension forms between one's own privacy, other peoples' privacy, the dramatic needs of a story, one's debt of integrity to readers and one's self. This I handle as best I can. The inflamatory power of decontextualized text is a real problem; I try to blog only what I would be willing to say to somebody's face. Blogging at school made me work out new guidelines: I don't mention classmates by name to protect their privacy.

I don't mention professors by name either, not because I want to protect their anonymity but because doing so would probably put my rough, frequently misleading or incorrect class notes in their googleographies, which would put a standard of accuracy and care on me that I don't want to meet. (I would, however, like to mention again that Yeow Tat Trading Enterprises, #B1-K2 Lucky Plaza on Orchard Road, cheated me by S$20 on an M1 SIM card.) I blog most classes, because taking notes helps keep me focused, and taking notes that I'll make public helps make me work harder, and because Google is the easiest way to search my own notes. If I feel that anything in a lecture or guest lecture may not be intended for a broader audience, I tend to ask before posting, both out of respect for privacy and because I'm a self-interested student before I'm a quasi-journalist (though I like to think of myself as an ethical person first and foremost, and those other roles as secondary). Seminars advertised to the public I generally assume are fair game. I try to clearly differentiate my own thoughts and commentary from the speaker's text.

I do have concerns about sharing things (political opinions, personal anecdotes, etc) that may affect me professionally, but I believe that transparency and openness are usually worth more than polish, reflexive discretion, or maintaining the illusion that everything is okay. That tradeoff is not universally true, and I probably get it wrong some times, but that's my bias.

Despite what I said above, internet blog posts cannot be the same as talking to somebody, because of the decontexutalization and removal of non-verbal markers. So if the Colonel reads my description of our base tour, I hope and expect he will appreciate that he was scary—and a classmate who attended the tour and reads my blog concurred with that adjective—in the sense of a heretofore quiet presence suddenly revealing the full authority of command earned in a long career, especially vivid and unexpected against the cheesiness of the phrase "blazing sword" and the literal background of a powerpoint slide labeled "Operationalising Fleet Tansformation - moving forward together".

The dean is a big fan of Thomas Friedman. Dean, if you are reading this, may I direct you to this summary of your most interesting lecture to our negotiation class?

So. Everybody else may want to check out this article, The peculiar genius of Thomas L. Friedman by Matt Taibbi. Taibbi's argument in a nutshell is that Friedman writes terribly because he has nothing substantive to say. But Taibbi's details make his argument sing:

It's not that he occasionally screws up and fails to make his metaphors and images agree. It's that he always screws it up. He has an anti-ear, and it's absolutely infallible; he is a Joyce or a Flaubert in reverse, incapable of rendering even the smallest details without genius. The difference between Friedman and an ordinary bad writer is that an ordinary bad writer will, say, call some businessman a shark and have him say some tired, uninspired piece of dialogue: Friedman will have him spout it. And that's guaranteed, every single time. He never misses.
[...]

According to the mathematics of the book, if you add an IPac to your offshoring, you go from running to sprinting with gazelles and from eating with lions to devouring with them. Although these 10 flatteners existed already by the time Friedman wrote The Lexus and the Olive Tree—a period of time referred to in the book as Globalization 2.0, with Globalization 1.0 beginning with Columbus—they did not come together to bring about Globalization 3.0, the flat world, until the 10 flatteners had, with the help of the steroids, gone through their "Triple Convergence." The first convergence is the merging of software and hardware to the degree that makes, say, the Konica Minolta Bizhub (the product featured in Friedman's favorite television commercial) possible. The second convergence came when new technologies combined with new ways of doing business. The third convergence came when the people of certain low-wage industrial countries—India, Russia, China, among others—walked onto the playing field. Thanks to steroids, incidentally, they occasionally are "not just walking" but "jogging and even sprinting" onto the playing field.

Now let's say that the steroids speed things up by a factor of two. It could be any number, but let's be conservative and say two. The whole point of the book is to describe the journey from Globalization 2.0 (Friedman's first bestselling book) to Globalization 3.0 (his current bestselling book). To get from 2.0 to 3.0, you take 10 flatteners, and you have them converge—let's say this means squaring them, because that seems to be the idea—three times. By now, the flattening factor is about a thousand. Add a few steroids in there, and we're dealing with a flattening factor somewhere in the several thousands at any given page of the book. We're talking about a metaphor that mathematically adds up to a four-digit number. If you're like me, you're already lost by the time Friedman starts adding to this numerical jumble his very special qualitative descriptive imagery. For instance:

And now the icing on the cake, the ubersteroid that makes it all mobile: wireless. Wireless is what allows you to take everything that has been digitized, made virtual and personal, and do it from anywhere.

See also Dial "M" for Moustache. Making Light has more commentary, including a pointer to a resonant critique of James Fenimore Cooper's writing. David Sirota argues that Friedman's ignorance stems from his class: "Far from the objective, regular-guy interpreter of globalization that the D.C. media portrays him to be, Friedman is a member of the elite of the economic elite on the planet Earth. In fact, he's married into such a giant fortune, it's probably more relevant to refer to him as Billionaire Scion Tom Friedman than columnist Tom Friedman, both because that's more descriptive of what he represents, and more important for readers of his work to know so that they know a bit about where he's coming from."

Here's my own review of the Lexus and the Olive Tree from 2002; my executive summary at the time was "Friedman is a tool".

Michael O'Hare.

1970s energy crisis. Is there an elasticity of demand for energy? Nobody knew since supply had never varied. turns out there is. (See the third bullet point here).

Texaco pitch in 1970s. Important never to regulate energy or else demand will outstrip supply. But what would it actually be like in that case? Would the gas pump suck gas out of your car?

New version: we have to use less gasoline and protect the environment, as long as our economy isn't affected and the price of gas doesn't rise.

I got back into energy policy because a few years ago I called Dean Kamen (?) to ask a question about ethanol and got sucked into an ethanol project. Biofuels is a small slice of the solution to the problem. What has to happen? various changes, including (J: most interestingly to me) reallocation of wealth and change in status indicators. "NOT a reduction in GNP or economic growth; prices/tastes must change.

I was surprised by everybody wearing suit jackets at the conference here (in tropical Singapore); last time I was here we didn't wear suits. I hear the middle class of China, and of Bangkok, think you really need to drive around (or be seen stuck in traffic in) a big car. But the new norms needed be that bad. Societies in cars have a hard time building social capital, they don't meet each other. Malls have only people like you. People start wanting to live in gated communities. If we handle things right, we'll consume the same value but in a different basket of goods. For example, digital music distribution versus driving to concerts.

How? Make, buy, inform, implore, tax, subsidize, oblige, prohibit. (Lots of apparent obligations are just prohibitions.) Used to be the norm in the US for guests to smoke in people's houses. Now people don't just light up in other people's houses.

Prohibitions can lead to suppliers leaving the market.

I'm less of a fan of carbon taxes than I used to be, though we should certainly have it, charge the correct Pigovian tax. But the market won't magically fix everything once the tax is in place. California's cap and trade system for emissions.

Complements of efficiency (public). Two-seat car doesn't help if I have four people in my family. If I want to ride my bicycle, I can buy a bicyle but I can't buy a bike path. That's an inseparable complement. I can't buy one ride worth of a mass transit system that doesn't exist.

In the US, there is a pervasive misunderstanding/mendacity about this. What does the first ride on a train cost? 2 billion dollars. What does the second one cost? a few cents. what's the correct cost? Marginal cost. Almost nothing. No private actor will go into this market. In the US politicians say the bus should be run like a business, should meet its costs. But there are goods like this that have to be provided by public subsidy if you're going to have them at all. (Joel's Note: and the road network is one such good, I believe.) This is not political, this is technical economics.

CARB, created in response to smog. Insulated from politics by politicians who appoint good people to the board.

How could it make sense for any entity smaller than the whole world to cut down GHG? A lower-carbon Earth atmosphere is a non-excludable public good. Governments say, we have to do this, even if we're the only ones and we feel like chumps.

Even Obama's energy policy is bad, because he's from a coal and corn state.

Low Carbon Fuel Standard. Measured in grams of CO₂ emitted per megaJoule. Includes total lifecycle emissions, such as carbon emitted while extracting the fuel. Using Default and opt-in approach. CA will assign fairly high values to gasoline from various sources, light crude, tar sands (bad), coal (really bad), Midwest corn, Brazilian sugarcane, but suppliers can do their own work to prove lower values of carbon, either by measuring more accurately or by paying attention to carbon and through that finding improvements in processes.

Policy challenges: Diesel. Cutting diesel prices in the long term will promote efficiency; in the short term will hand a windfall to trucking. Will help some refineries and hurt others. Is a company a person, do they deserve fairness? If we help the ones who guessed wrong, we provide a very bad incentive. Importing low-carbon fuel to CA, exporting Californian high-carbon fuel; same fuel burned but with extra cost of transportation.

A really good battery, which has been just around the corner for 30 years (more), will completely change the economics of the fuel business. In 1900, 25% of US agricultural land was devoted to biofuel: oats for horses. Assessing the greenness of biofuels is much harder than we thought. Badly made ethanol is worse than gasoline. Even good ethanol may not be so good.

"Ethanol curse"; societies based on extractive wealth haven't turned out that well. Argentina was the richest country in 1920; society hinged on living well, not adding value.

Biomass depends on some new enzymes; more likely than better batteries. Miscanthus as the new magic solution. Huge fields of monoculture with low labor input; what impact will that have on economy and culture?

Biofuel thinking caters to the existing oil economy, liquid fuels. What about hydrogen? I'm skeptical about hydrogen (which is a battery, not an energy source) because of its low density and other issues.

My personal recipe is carbon tax, funds spent on sequestration, and big public investment in alternative transportation.

How focused is the field on US-centric needs? The technology is general. Consumpton patterns is the big issue. What plans are afoot in Asia to host 100 million Bangladeshi refugees-to-be that all live 2 feet above sea level?

Q: As a lay person, biofuel is a dirty word because in the newspaper it's linked to food shortage. A: Corn to ethanol is terrible in every way, and we need to get away from it.

When I was a kid I was confident the grown-ups would take care of everything. But it may not work out that way.

Guest speaker in class today, Andrew Moravcsik.

Normally I take a dim view of people surfing, playing solitare while I'm talking but since it's game one of the world series ... what's that, three to zero Sox? Great.

Politicians often say one thing and mean something else. Particularly large distance between what people say and what they do in Europe. You have to be able to read that. Three examples.

The rhetoric about "Europe", even in Europe, is very negative. I'm living in Shanghai this year and they tend to focus on the Taiwan Straights. But Europe is actually the most successful and most ambitious new political form in a century. Multilateral governance, with EU as best example, is the first successful innovation since the rise of the social democratic welfare state. Has is stagnated recently? No, it's grown. Is it a foreign policy failure, unable to project power? No, it's succeeded in projecting soft power. EU enlargement is a very cost-effective way of spreading peace and security. For example, Montenegro, Macedonia, Morocco, Libya, not members but turned around through EU efforts.

EU policy for Iran is coherent, coordinated. Nobody's policy works well in Iran. EU Ukraine policy was more effective than US. Gives 70% of global foreign aid. EU model will stay more attractive than US model. My new article in Newsweek.

So EU is very successful but the noise is negative. Why? Only the extremists have loud voices; europhiles are disappointed that EU has not fulfilled their expectations; euroskeptics oppose it all. But policy is set by pragmatic centrists. So what is the reality? A plateau, a "constitutional settlement". Defines what issues it deals with, what norms it has.

Three elements of the constitutional settlement, a substantive element, (an administrative?) element, and an ideological/normative element.

20% of European legislation goes through EU. Almost anything involving spending money remains national. There's a specific way that the EU gets involved in issues: countries face domestic policy failure in issue linked to interdependence. Started with industrial trade in 1950s. (J: ECSC) Agriculture: French grain surplus. All economies in post-WW2 era are subsidized, but surpluses are a problem. Joel's note: not sure I understood the reason why. I thought it was because, as long as domestic market buys all grain, the subsidy stays in the economy, but I don't think that's what he actually said.

"tion: EU is legalistic, Asians are schmoozers, form networks instead of surrending sovereignty. But my view is that politicians are politicians, and don't like international organizations telling them to do difficult things.

EU institutions are quite limited in scope, and informal institutions further constrain them. Odd that critics of EU tend to be small-government conservatives, because EU is epitome of Madisonian small government with checks and balances. Need unanimity to change constitution. Just to pass normal legislation, 27 heads of state must agree on guidance. The Commission, a technocratic body, make a proposal, which can be ignored or discussed. In theory 70% majority is required, but in practice they never vote because that would embarrass the losers. Instead they arrange consensus or consensus minus one or two (depending on the perceived legitimacy of the objectors). Then European Parliament discusses and passes by majority. Implementation is national, overseen by national courts. Everybody gets a bite at the legislative apple; very consensual and no radical changes.

As long as EU doesn't have real tax power, administrative capacity, police, military, it will stay very limited in scope of governance.

The referendum voting, France and Netherlands. Most voters were motivated by non-EU issues (Chirac, globalization); none of the votes were anything to do with the actual constitution that they were voting on. Why? The issues the EU actually deals with are not high priorities for voters. All voters in European elections are casting protest votes on other, non-EU issues. People don't care about their MEPs.

If you are planning a career in a multilateral institution, which is not directly democratic, remember that there is no correlation between how much they like and trust an institution and whether or not it's democratically chosen. What institutions are most trusted by polled Europeans? ICC? Court of justice is 7th. Oxfam? NGOs are 15th. UN is 3rd. What are the two most popular institutions in Europe, both national? Oxford, Cambridge? Universities aren't on the list. #1, the army. #2, the police. #3, the UN. #4, European Parliament. Through the top 20, no real correlation between ranking and democracy of institution. Joel's note: I wonder if this is the wrong model of how people think about democracy. Maybe the psychological motivation is to have a general sense of voice and freedom, and as long as that's satisfied by the basic environment and norms, individual institutions aren't judged the same way?

How applicable is this to Asia? (e.g., what is the prospect for Asia to have an EU-like thing?) Strongest reforms in areas with demonstrated policy failure, like finance. The level of interdependence in Europe was very high and very symmetrical; that may not be true in Asia. Harmonizing telecommunications or automobiles in Europe had widely spread winners and losers. Other key: national enforcement. A German company has to be (and is) able to go to a French court and win a case. Do Asian countries have credible legal systems? Maybe not.

Joel's note: what about the two other examples of where EU politicans say something very different from reality?

Q: what next in Europe? A: no radical changes. Note that the constitution is very minimal, could/should have been done under the radar as treaty amendments. EU politicians lost their nerve/Joschka Fischer wanted to grandstand; this galvanized oppositon. En-bloc negotiation with Russia would be good but Putin can always divide and conquer. Negotiating gas pipelines: did the US come in and sort things out for the dithering Europeans, or did it just take a disinterested third party? Best policy to Iran would be to embargo their oil, not to bomb them. But American domestic politics doesn't permit this.

How many of you can explain, in greater detail than 4 sentences, how an occupational health and safety regulation is made in your country? A: (My answer) companies write the rules and hand them to legislators to pass into law. "Cynic!" A: in the Philippines there's a forgettable agency. There's sort of a standard, they conduct evaluations and assessments.

So even at the LKY school there's only a limited knowledge of this thing that we agree is important. Outside of here nobody will have a clue. People have extremely naive views about how democratic processes work. You must have very strong things to structure debate, such as issues people care about. I fault the people studying the EU, who think anybody else really cares. All international institutions are boring. Once you understand that you can use it to your advantage. Joel's note: isn't that a justification for elitism? Just because nobody really cares about the process doesn't justify ending efforts to modify the process to get greater public participation/legitimacy. Who is responsible for improving our political systems, if not policymakers and politicians?

Q: your presentation seems to confirm that there's a democratic deficit in the EU commission. What do the countries with little economic advantage bring and what voice do they have? A: Two reasons I'm unconcerned with the democratic deficit. One is that I don't think it's an important criterion. The other is that the commission is losing power anyway. Increasing power of Council of Ministers and European Parliament. This is discussed in FT in code: 'we don't have the visionaries we used to have' but it's really just a transfer of power from Commission (since member states aren't giving up any real power). Joel's note: is power a fixed sum? I guess it ultimately must be because it's the ability to control what other people do, and so it's limited by the number of people doing things.. Smaller states are fairly well represented in the EU systems. It's important to remember that Western European legal systems are independent of their governments. You can use the French legal system against the French government. This is how the international enforcement bodies have real power.

I think the 80/20 split (limits of scope of multilateral government) is good. People have a democratic right to debate things like social welfare reform. But the problem is people stuck in the old mindset of "ever-closer union".

Q: (missed it). A: where does the rhetoric of the democratic deficit come from? Part of the story is that many far left have moved to the far right. How to compete for those voters? I was one of several people early on who said the EU push for national approval of the constitution was a bad idea. An unstructured electorate is chaotic. EU decision-makers tried to make it "more democratic" without understanding how that would play out.

Q: I see the EU as leading global efforts to address some environment issues. I'm struck by your statement that environmental issues got into the EU agenda only because MNCs wanted consistent regulations. In your opinion, how do you think MNCs, through the EU, influence environmental governance in Asia? A: well, history of EU environmentalism is a bit more complicated. Some quirky rules from the 1970s. Every politician in Europe listens to business interests. Not as overt as in the US, but you just have to get to people's datebooks to find out who they are talking to, having dinner with. No significant job loss ever allowed. National positions can be predicted by national economic interests and environmental norms.

Class Discussion

Anybody offended that his theory rules non-Western countries out of effective multilateral institutions because Asian countries have weak national institutions.

Joel's note: One of his assumptions is implicit in the term "multilateral". Multi-lateral means between states, so global institutions that aren't state institutions aren't even worth talking about.

It's misleading to think that Europe has good institutions and Asia bad ones. It's an unspoken agreement in Europe that some countries have better institutions than others and will go on their own pace. Why couldn't that apply in Asia?

I agree that it can be hard to explain things. But in this way we legitimize a lack of democracy. (Classmates (including European students) uncomfortable with his direct confrontational style when we asked questions.)

Even the boring, complex stuff can become big political issues; EU prevents them from being politicized.

Classmate asked me at break how the US saw the EU: most don't really care, I thought, see it as some weird European thing. So what about Australia? Prof: we hate it. Great fear in 1970s that Britain joining the EU would cut Australia adrift.

Moving on to readings. Credit markets: newly international. Secondary markets are the most interesting part. Biggest market in the world is the currency market ($3 trillion/day. Derivatives are $2t/day). Maturation period for physical foreign investment is years, maybe 7 years to plan and build a factory and get it going. Exchange rates fluctuate on a half-second basis. Joel's note: so there's an absolutely enormous amount of churn and fuss that's almost wholly unconnected to the physical world. Which I guess is not news. Why do states care? Markets, instead of central banks, now determine exchange rates. (Control interest rates, control exchange rates, have a free market. You can have any two of the three. Trying to dig up the name of this theory; ran across it during econ class last week. Ah, The Trilemma. Guan identifies it as "Obstfeld and Taylor" Trilemma.) The autonomy of states is now constrained by market expectations. So we've circled back to Clinton's quote about his administration's success depending on the bond markets.

Thailand. Early act of the new junta was to moot a change in tax law, increasing taxes on short-term money to 30%; had to drop it in the face of opposition from the capital market. No country, not the Chinese with 1.3 trillion reserve, not the US, has pockets deep enough to fight the market. Massive revaluations are very bad for economies. Not international regulation of currency markets. Yes, but this week's reading also says norms have effects, public sphere is trying to control this. But that will just get us back to where we used to be. Russian ruble crisis 1998. LTCM. Two classic quotes here: "the market can stay irrational longer than you can stay solvent", and LTCM's strategy was like "picking up pennies in front of a steamroller".

States give up much regulatory control, can't (don't want to) get it back now because too much of the economy is now based on these markets ("FIRE" economy) and regulation would kill the markets.

It seems like this article, in which a Christian writer explains why J.K. Rowling is wrong when she says that one of the characters in the series of books she wrote is gay, goes nicely with this article.

Macro

What one thing is most important in a one (half) semester macroeconomics class for public policy students: trade is good.

• specialization according to comparative advantage (Ricardo). This is a static gain because ... of reasons I didn't hear
• competitive pressure/flow of technology. Dynamic because a constant stream of signals and information.
• East Asia as an example of how trade helps. J: well, is that mostly trade or is that mostly exports?
• Why is free trade hard? Stolper-Samuelson. There are losers: adjustment costs, international labor market issues, competition.
• The world did China a big favor by dragging them through the necessary steps for WTO entry. Now the world needs to do the same favor to the US, and force the US to end agricultural subsidies.

Presentations

Import/export and trade

• Vietnam. Trade opens big with Clinton visit in 1994. Rapid growth in imports and exports from 1996 to 2006; top rice and coffee exporter. Sustained trade deficit
• United Arab Emirates. Big trade surplus most years. Eight-fold increase in exports from 1994 to 2006. fivefold increase in imports. Trade a percentage of GDP stable until about 2003, then jumps up as oil prices rise. UAE is not only oil. Oil was 24% in 2000, up to 38% in 2006 but only because of rise in price of oil. Hydrocarbons are around half of exports. Free zones in ports.
• Australia Always a net importer, back to 1982. Huge growth in imports/exports starting in 2003, because of new free trade agreements. Access to protected US markets. Floated Australian dollar in 1983. Transparent in policy regime. Australia has about 80% of all the mineral resources in the world. (J: Really? 8 percent sounds more realistic.)
• Thailand. Results closely linked to plan. Five plans in place 1961 to 2005. Low, flat trade through 1986, steady growth from 1987 until the crisis. Very strong effect from crisis; export growth stops growing for three years, even dips a bit, before resuming rapid growth in 2002. Imports drop by over a third, take seven years to recover to 1997 level, then zoom up.
• Bangladesh Slow but increasing trade growth through 1999, then an election, Y2K, and huge flood put a kink in trade growth. New import/export policy in 2003 helps with recovery.

Singapore's imports and exports are greater than Australia's. Trade is 450% of annual GDP in Singapore.

Micro

Economies and diseconomies of scope and scale. Ghana has a Ministry of Education, Science, and Sport. Then it's the ministry of Education and Sport. Then Science comes back in. Etc.

Network effects. IE has 95% share and so is primary target for virus writers. J: Actually that's a controversial assertion; IE is also a primary target because its security design is deeply flawed. Also its share has dropped below 95% but that's a nit. Also, this might be a good place to name-drop "first mover advantage", which is certainly believed to be true by many, whether or not it actually is as a rule. No time for that at the pace of this class.

I thought I heard the prof say "kohseh", referring to Ronald Coase. Sources have it as a one-syllable name, kohs or 'kOz. An example of assigning property rights to enable economic efficiency, using a polluting factory vs the fisherman as the example. Enabling tort lawsuits promotes economic efficiency.

A Canadian classmate relates that Canada was ready to declare war on Spain over fishing rights in 1995

Public and private goods, excludability, rival(ness?). Intellectual property. Prof is critical of patents (J: nice!). Seems like an appropriate time to mention IBM's attempt to patent the process of making money from patents. Prof's response: Great! Then only they could enforce patents, and one company, even IBM, can't possibly do as much damage as everybody else together.

Majority rule is economically inefficient because it measures each citizen's preference equally. J: I agree that simply majority rule can be improved by more sophisticated voting methods that allow voters to express more information (approval voting, Borda count, etc), but ultimately democracy may be about something other than efficiency.

Robert Lieberman from Columbia.

Almost every class at SIPA is multinational. Breadth vs depth. Often the depth of experience comes from a single country, usually the US. Not an issue teaching American politics classes to mostly American undergraduates. But in policy school, tension between specificity and breadth. Also a tension between cases and theory. Different educational backgrounds. On the other hand, the US is very important in the world and students should learn something about it.

Prof Scott. LKY is very diverse. Are we an Asian public policy school or a public policy school in Asia? (Joel's note: I'm more interested in the latter.) We by and large concluded the second—there's no Asia-specific kind of public policy. We don't have a default context to fall back on.

The question is, what goes into defining the public interest. In North American context, that's grounded in democracy. There is no single normative framework that is easily presentable as a default mode for our student mix. Who gets to define normal?

We teach very little of the Singaporean context; reverse of the US problem of too much local content.

Different levels of English ability. Workload is too great to be easily digested. What is the right balance? Should we replicate the Harvard PhD experience?

Not all students from different countries come with the same willingness to subject their own countries to critical inspection.

A sectoral issue: from pre-career that may go public or private, to mid-career.

A few issues to start the discussion: what is the mix of national backgrounds in your classrooms? Do you even think that national background is the most important kind of diversity?

Berlin. 30 students, mostly European. It doesn't make so much sense for non-Europeans to study European Union policy-making. Starting using student experience last year (all students are mid-career).

The value of regional specialization raises the issue of the universality of public policy. Berlin: Our dean says we are an international school with a European perspective, but that he doesn't know what that means.

An 80-student masters class is a classroom management problem to get information from students.

Another school in Singapore. Wholly international class, development, not policy. Don't use cases students are familiar with. Used a US case with a Singapore Ministry (US intervention in Bosnia). Singapore policy solutions in response to the case were completely different from US, in part because Singaporeans didn't have all of the historical context necessary to understand why the US didn't just go and bomb Bosnia, which is what the Ministry students wanted to do. (laughter).

LKY PhD student: we do a lot of simulations, assign roles.

Columbia: Many students come from lecture cultures, get into discussion classes, complain that they came to hear the (distinguish) prof, not the other students. ... Simulations are good to put students into each others shoes. We made an Armenian and Azeri switch roles in a simulation, very usefull.

We write lots of policy memos. Most useful ones come when students have to put themselves in opposite mindsets, support policy goals you disagree with. We make students write memos for Bush.

LKYSPP: would be best if professor was 20% and each student 5%. But we get blocs from China and India wanting to talk about their issues. Also I'm afraid LKY will become the Singapore Public Service training school.

Diversity of faculty. For us the challenge is making sure the Singaporean aspect gets reflected enough; many students come expecting to learn more about Singapore than they actually do because our classes are so international. (Joel's note: or US-centric, especially economics).

Diversity of student academic background: philosophers, scientists, etc.

We had students from Cambodia: how do you assess their academic background? What minimum background is necessary to allow students to function, as a practical constraint? Berlin: Take students from any background; of course there must be basic understanding of policy, newspaper knowledge, etc. Crash courses on statistics, etc, so people can ask smart questions of economists. Students help each other.

Joel's note: 14 in the audience and 2 on stage. Total of 2 in audience are female, of which 1 spoke.

Incompatible backgrounds for professors. All from US, UK, Australia, problem is US vs UK experience, different concepts of what a PhD program looks like, what is adequate scholarship? LKYSPP: same issue setting up PhD here. North Americans were baffled by how quickly school decided to adopt PhD program, others saw it as more of an apprenticeship, bare bones courses plus advisor. (Joel's Note: my understanding is that US PhD's are the most rigorous, 5-7 years in many subjects, vs as few as 3 in Europe.)

Courses shaped largely by individual professors, can move from original core topics. Especially in politics courses.

Joel's Note: should I ask a question? They are talking about high-level issues but what about the ability of students to understand English?

A classmate asks the question/makes the point I just thought of. Points out that many Chinese students in particular have more trouble, can't read as fast. Prof Scott's point: they learn the most, coming up to speed.

It's not just the words but the concepts. What does "accountability" mean in different cultures?

Students from China, Indonesia, Thailand, complained to me that they face a lot of problems with schoolwork because of their command of English. They just want to pass, go home with an MBA, get a promotion. They may not plan to ever speak English again once they go home. What about executive programs, translators? MM used to say we needed to learn Mandarin to do business in China, but now he says just get a translator, since you'll have to go to Russia next, etc.

Only some public policy schools are international. National schools in national languages still exist, but even they will have to internationalize their curriculum. Even if a student doesn't go back to using English in their daily life, I don't think it's a wasted chance for them to become more fluent, since they'll then be able to draw from other resources.

One problem in Berlin: students felt uncomfortable because of cultural differences. Talkative Americans vs listening Chinese. Student blamed cultural differences, but another student from that culture says, "no, he's just annoying". But profs want to be sensitive to this.

Public Policy programs and employment. Low turnout—I thought this one was fully booked.

Executive summary: Each country is different; many have entrance exams or other standard tracks for civil service.

In France, there are comprehensive examinations for public jobs. The MPA program doesn't prepare students for these exams, so there is no domestic job market for French MPAs. There is a Master of Public Affairs taught in French. The French students take a concurrent course to prepare for exams. Some graduates simply go back where they came from, such as the Chinese students. We must understand ourselves as programs that train for the public and private sector alike.

Should we train students for the public sector exclusively or give them options?

It's not so much a problem for our graduates to find jobs. The problem is how to get them into national service.

In Malaysia, we do have an institute to train our government officials, after they join.

In China, Peking University is very influential in providing eventual high officials. The new lineup of the Politburo, the new heir apparent went to Peking University, but the law faculty. If you look at the history of the PRC or the Communist party, or Peking University as a whole, has much in the process of shaping public officials. ... We offer weekend classes for working students. Satellite programs.

Singapore. No school-specific hiring requirements, though of course relevant training is required. Competitive examinations happen earlier, after high school (A-levels). Top students then get scholarships to go to college in Singapore or the rest of the world (and are bonded to work for the government for a number of years).

Sciences Po student from Peru. The public sector is not very structured; a variety of backgrounds. It's more prestigious and useful to have a private sector background and international experience. Perhaps we (you the schools) should be looking for, where do we go later, after 5 or 6 years. People in their 30s, probably they are not going right back to the public sector with an MPA, but eventually they will.

So in your country it's easy to go from the private sector to government 5 or 6 years after?
- Yes.
- It's not like that in other places.
- In Latin America that's how it works. It's much easier to go from the private sector to the public sector than the other way.
- (US) Same for us.

In our (US) school, half go public and half private. Private sector are hiring them for their quantitative skills, not their policy skills. The CEO of United Airlines said that they take business skills as a baseline, and are now looking for policy skills. Perhaps the MPA will eventually compete with the MBA? Perhaps employers want the skills our students have but the employers don't know it.

(France) The private sector doesn't recruit the students we train. ... The Anglo-saxon profit preference is gaining ground. But we're thinking of private companies run on a more enlightened basis.

There's a huge demand for policy-setting skills in Asia. I mean all the way from the Middle East to Japan. Need to sell to CEOs, to have fundamental planning. Asia is growing so fast, if you make a mistake in one area you can just shift to another. Need to convince CEOs you need a strategic policy plan.

China: in the short term, we look at executive training, not degrees. Senior officials, about 45, relatively young, can have an impact on policy-making in China.

France: divide between business and public administration schools. Strengthens the public/private divide we are trying to bridge. Have you tried to bring together public and private in China?

Conceptually yes, but slowly in practice. Executive training includes managers in the corporate world. Would make sense to train officials in state-owned enterprises. To recruit students from there, we have to coordinate with the Party.

Watch it live

The heads of Sciences Po, LKY School, London School of Economics and Political Science, and SIPA at Columbia (from where somebody subbed for the head) spoke for a few minutes. Some interesting points:

• LSE director. After being intimidated by a bunch of French administrators, "énarques" who seemed to know what they were doing, he went looking for his own public policy education. Got a Stanford MBA with as many policy classes as possible.
• Some dissing of ENA. France is back in globalization because the influence of the National School of Administration is diminished, and the Master of Public Affairs degree is more international, Sciences Po offers double degrees with schools in GPPN and has more international students.
• Kishore referred to a joke about men in dark suits and red ties running the world, drawing attention to the red ties and dark suits on display on stage.
• Kishore talked about how public policy teaching materials are focused on North America, not very resonant with Asian students.

Ann-Marie Slaughter

How to get good people in public service. Singapore does it by paying very high wages, but that will never fly in the US.

More liveblogging. You can watch the live webcast here. There is also an official weblog, which is more conscientious and thorough than mine.

Panel on Energy and the Environment, hosted by Ann Florini

First speaker.

I'm going to assume everyone has seen Al Gore and agrees there is a problem. Let's talk about who's going to do it, and how they're going to do it. The second pillar is what to do about oil. The third element is economic.

Here in Singapore, what is our position on this triangle. We want to keep growing, but what is our very-long-term outlook?

First Evil: (missed the details, something about bad or unrealistic policy in the face of climate change)

Second Evil: unsafe nuclear energy

Third Evil: "brown" biofuel. Biofuels that are not actually good overall, such as palm oil.

I'm not taking many notes because I'm not hearing anything really substantive, specific, or novel

Second Speaker

Asia is not doing well in energy intensity, perhaps twice as much as other regions. There's a great potential to do better because a lot of the economy is not yet built, so it could be built more efficient. But if we do business as usual, we will risk changing the average temperature five to six degrees (C).

Each year, two billion square meters (of floorspace) are built in China. Depending on what materials China uses, that will make a great difference.

Joel's note: It seems like the basic environmental problem is that most aspects of our current technology, economy, and usage pattern of natural resources are utterly unsustainable and will require, if not returning to adobe huts, at least relatively radical changes. I happen to believe, without necessarily a lot of detailed analysis or data beyond back-of-the-envelope amateur scribbling, that we could probably solve these problems without having a terrible drop in our (US) standard of living; but we would have to restructure our lives to some extent, with a lot more urban living, public transportation, buying products and buildings that cost 5 or 10 or even 20 percent more because they contain sustainable design and ingredients, etc; those changes plus real regulation of the energy industry and a Manhattan Project or two for new technology ought to do it. But even these changes are clearly politically utterly impossible for the foreseeable future, and that's only considering the US, which is not the worst per-capita polluter. Any discussion of how to fix the problem that isn't radical is probably a waste of time.

Ann: I agree with both speakers and that leaves me very depressed. I hear that the third-world stance is, it's all the rich countries' fault and we'll wait until they take the lead.

Thank goodness, the dean just left. Now I can go home and walk my dog before returning to catch the shuttle to the President (of Singapore)'s dinner.

More liveblogging.

• Mario Monti, President of Bocconi University
  • Globalization is exploding by Asianizing. But it's going to implode unless it gets somewhat Europeanized. It's not irreversible; it was present in the past, maybe more even than today. In 1914 the world was more globalized in many ways, but it collapsed.
  • We need more governance of globalization. Europe can offer software: integration of market and integration of policies.
  • Last Friday's new EU rules are an improvement. EU will stop having a rotating 6-month president, will have a foreign minister (but not with that title). This will create more effective EU foreign policy. Only three areas where EU can speak unanimously. Trade policy, monetary policy, competition policy. You might recall that Kissenger complained about a lack of a telephone number to call. But now there is only one number in Europe for competition policy, in Brussels, but two in Washington, the Justice Department and Federal Trace Commission. The Microsoft case was a rare example of divergence between EU and US competition policy. Japan and South Korea have been going down the same path as the EU re: Microsoft.
  • ICN, international competition network. Exactly the kind of network Ann-Marie was suggesting.
• Arvind Panagariya, Columbia Professor
  • Moderation interjection about Gordon Brown's nightmare: Sarkozy talking to Blair about making Blair president of the EU, so don't assume the new EU improvements are a done deal.
  • News is generally good about world trade and WTO. Structure is flexible and able to accommodate the changes going on, perhaps because it's a young institution. Well run, one member one vote.Architecture of IMF, world bank.
  • New Quad: US, EU, India, Brazil. China is there but has chosen to hold back, be part of the G20—this is a different G20 than the one we were speaking about this morning (sic; that's the speaker talking about different groups, not me). Developing countries are able to exercise their weight and power.
  • Challenges to trade: bilaterals are fragmenting trade. The spaghetti bowl. Rising protectionism in the United States and other rich countries. All US candidates are running as protectionism. Hillary Clinton has said the US should review all trade agreements every five years and leave them if they aren't serving the US' interests.
  • China has less IMF voting power than Belgium plus (? missed the other country).
  • I take a pessimistic view of governance handling crises; countries are taking individual responsibility by accumulating reserves. That marginalizes the IMF. In India IMF maintains an office but I don't think anybody consults them. On the World Bank, I think it's gigantic, ten thousand employees and thousands of consultants, compared to three hundred for the WTO and a few thousand for the IMF. What are they doing? Are they needed?
• Andrew Sheng, China Banking Regulatory Commission
  • Introduced as "a personification of the changes in China in the last 50 years". Family fled to Malaysia, he later went back to Hong Kong and now works for Chinese banking regulators.
  • Asia is basically punching below its weight. 55% of world's population, 1/5 to 1/4 of world trade, 1/4 of world GDP. Not more than 15% of world stock market capitalization.
  • The most difficult part is not growing out of poverty, it's moving from poverty to middle income where the issues are much more complex.
  • We've gone market, but market doesn't solve all the problems. Using up all natural resources. During Asian crisis Asia destroyed something like 4 to 5 trillion dollars of wealth. (Joel's note: These big number claims always interest me. Some are clearly false: assertions that pirating steals many billions of dollars are grossly exaggerated. When a few people buy a stock which has a million shares at a higher price, so that the last 10,000 shares traded at, say, $40 instead of $39, did that really create a million dollars of wealth? Did the Asian crisis lead to abandoned construction projects, people wasting years of education, etc, totalling 4 trillion dollars, or PPP dollars?)
  • Foreign policy is domestic policy spoken to foreigners.
  • Did Marco Polo bring spaghetti to Asia or from Asia? Who cares? Tuscany, ramen, chinese ravioli, laksa, it's all over. As long as we all enjoy globalization, let's not try to say that mine is better than yours.
  • As I was surfing during the speech, I ran across an interesting comment. The blog post is about the silliness of the norm that Kansas farmers are "Middle Americans" when more people play World of Warcraft than live in Kansas. The relevant comment is,

    farmers' politics are about as radical as those at Burning Man, but in the opposite direction ... What got me were the "Get the US out of the UN" billboards. In areas where you would have to drive for a solid hour to get to the nearest stop light. I mean, if that's middle America, at least we're more globally conscious than the "ugly American" stereotype would have one believe.

Moderator question: Arvind, you talked about the quad in WTO. Do you mean that the Chinese are taking a back seat and being represented by India? A: Essentially yes.

Q: Do you agree that Europe offers good models for Asia? A from Andrew Sheng: Europe offers ideas. The largest economy in Europe is 13% of total, but the largest in Asia (Japan) is half, and owns two thirds. We won't be able to use this European system to use an economic policy, single currency, to achieve political ends. Harmonization, or mutual recognition as the British like to call it. I see some optimism in the spaghetti bowl of bilateralism, because it leads to multilateralism.

Q: EU is about regulation, but Asia is deregulating. If we take a two-millenia persective, isn't Europe likely to return to its role as a promontory of Asia? A: that's very challenging. You're right that much of Europe's market has been built up by regulation. But each EU regulation has disposed of 12 or 15 or 27 national regulations. Joel's note: and remember the point from SMIG reading, I think, that regulations can enable new markets (e.g., standardization). In your second question, two millenia is medium term.

Q from Ann Florini: Recap what speakers said: Asia cannot develop the same path as the West because there are not enough resources. $20 trillion, the amount that the International Energy Commission says must be invested in new energy by 2020. Zoellick's desire to refocus the World Bank on environment/energy is good because there's no other international institution which can deal with this. If not the World Bank, who? A: if you keep giving this to the World Bank, alternatives will never emerge. But they exist: IPCC, McKinsey, KPMG. (Joel's comment: Seriously? The issue is not where the thinkers come from, it's where the funding and legitimacy and governance come from. IPCC is a great success but doesn't provide governance. Nor can McKinsey or KPMG, or at least not any better than Blackwater can provide soldiers.)

Q: There's a shared and merited euphoria about growth and lifting people from poverty and the role markets played in that. But there is also rising inequality, from the usual forces, winners and losers from technological change and from the financial architecture of the world. How do you think about the possible negative political consequences that might be building? Protectionist pressures from the United States (see the blog comment quoted above—see, my surfing is on topic and even leading the discussion), European rejection of the constitution, etc?

Q: How much Asian wealth is financed by US trade deficit? Is that unsustainable and dangerous?

A from Andrew: I don't want to comment on the exchange rate question. I think current account deficits are structural in nature, and so demographic. Asia has a savings glut. This is partially related to the Asian crisis. After austerity problems, we woke up one morning and said, the pollution is so bad, we have to do something about it. But which country has re-structured its civil service to handle the economy. In the past 50 years Asia was a price-taken, but has not been a price-giver. (Joel's comment: I suspect/hope he has a complete, coherent, deep answer that integrates several issues, but his mouth can't keep up with his brain and it's hard to tell what the hell he's actually trying to say) You need to focus on net, not gross. Even with the large increase on gross assets, China's net balance sheet number is not out of whack. The dollar is the world's biggest commercial banker and investment banker. The US plays the biggest role in recycling world saving. So far Asia hasn't shown the ability to recycle its own savings. How are we going to restructure our savings to invest in the environment and our childrens' health? We're in the global common and we need to work together.

A from Arvind: negotiating capacity. Many developing countries don't have it; NGOs have filled the gap in some cases, sometimes with very bad advice, such as convincing countries globalization is bad for them. In India in the last five years globalization has done wonders in bringing poverty down. ... No matter how you cut the numbers, you don't get a lot of jobs lost to outsourcing, maybe 200,000/year at most, and the US economy creates and destroys 50 million jobs per month. But the perception is much greater.

A from Mario: I don't share the euphoria. Globalization is good but there are huge inequalities, and I said I don't consider it an irreversible phenomenon. We should fix the financial architecture but that won't fix inequality. The thing that will fix inequality is coordination in taxation but that's politically impossible. Governments do try to help the temporary losers of globalization. There is an erosion of the tax basis.

This week LKYSPP hosts the Second Global Public Policy Network Conference. Our Monday and Tuesday classes are cancelled. I'm sitting in the big auditorium waiting for the "Opening Remarks" by George Yeo, Singapore's Foreign Minister. GPPN members include the LKY school, London School of Economics, the Paris Institute of Political Studies (called Sciences Po), and Columbia University. While I wait I'm checking the Red Sox score, as is the distinguished gentleman to my left. (Who now tells me that I'm not old enough to be a Dodger fan, since the Dodgers haven't existed since 1957. An event he is old enough to remember.)

Dean's remarks.

• I will touch on three areas. Why is a Global public policy conference necessary. Globalization in Asia. Introducing the Foreign Minister. All in 10 minutes
• Public Policy education is less mature than business schools. 2/3 of Harvard Political Science department opposed the Kennedy school of government. Economics department believed anything important to be known about economics and government was already known and being taught in the econ department.
• Globalization is the biggest force affecting our lives on this planet. My personal prediction is the Asianization of Globalization. So LKY and GPPN are part of two sunrise enterprises (policy schools and Asian globalization).
• Double-degree from Cambridge. MBA from Harvard. Armed forces Brigadier General. (this is related to the CEP/Scholar issue; if you are a top student in Singapore, you have a predetermined path through the military and then a guaranteed high government job. My friend Guan reports from Harvard that Singaporeans there confirm funny business in the Singaporean Scholarship system and offers this article about accusations of racism in scholarships).
• Anecdote about George Yoo giving history lessons about Yugoslavia to their Yugoslav cab driver

Minister's remarks

• Did my first tour of the Pearl River Delta since 1992, a few years after Deng's famous Southern Tour.
• Shenzhen is maturing past growth stage. Good environmental stewardship of wetlands
• Macau: already bigger gambling revenues than Las Vegas
• Yangtze delta development will be even bigger than Pearl delta
• Within a few years, India will also break into a development trot. Already growing 8 or 9 percent even with many obstacles still in place.
• Gulf states are flush with oil and gas money. Development projects under a billion dollars are "small beer".
• Increasing development of the mainland is key to Taiwanese integration
• ASEAN is important. etc etc.
• What is Europe's role? That's up to Europe.

Panel discussion:

• Dean pitches his next book and introduces the panel.
• First speaker: Surin Pitsuwan. Thai. Secretary-General Designate of ASEAN.
• Asia's economic impact on the world has been much less than Asia's political impact
• We found 10 years ago that the world financial architecture of the world was not sufficient. IMF, etc, forced to reform. G20, emerging financial/economic powers, many Asian
• An APEC meeting where somebody (Zhiang Zhemin? missed the name) threatened to walk out if East Timor was raised as an issue? But now we have ASEAN, ASEAN plus three (China, Japan, South Korea).
• Jealousy and fear of outsiders. Regionalism. Could become a neo-containment policy approach; we will take care of our own problems and outsiders please don't interfere.
• Professor Bhagwati talks about spaghetti bowl relations—lots and lots of bilateral agreements. Asia is probably creating a meatball plate. We'll solve problems with less outside involvement.
• Some countries in the region don't want to open up the issue (of Myanmar) and it must ultimately be handled by the regional powers.
• I think this approach of small scale, local solutions must be accepted by the outside world for a few years to come. Joel's note: It's not clear if he's approving of this quasi-isolationalism but I think maybe he is.
• Anne-Marie Slaughter. Dean of Woodrow Wilson School. "A very strong rumor that if the Democrats come into power, don't be surprised if she ends up with a big position in the next administration. But that's a rumor"
• Asia is driving globalization. My book in 1997 was "The New World Order", though I changed it later to "A New World Order". Should build networks of peers (environment ministers, health ministers, etc).
• Asia was pioneering this kind of model in a much more diverse environment; many kinds of conferences where ministers, not heads of state, attend. Joel's Note: Condoleeza Rice hurt the US reputation when she skipped an ASEAN meeting and sent a minion instead
• I just heard Surin talk for 20 minutes without mentioning the United States. We have to get used to that. I'm half-Belgian, a Europeanist, living in Shanghai with my husband and kids this year. I wouldn't count out the US yet (humor); I think we have 10 or 20 years left. Kishore's last book points out things the United States did before Bush to hurt our reputation. He says the US needs to recommit itself to the (good) international regime it created as well as put its own house in order. This sounds like the platform of every Democratic platform, or from Romney. Joel's Note: Hah! Romney got applause for wanting to double Guantanamo.
• US continues to have a role. Stabilizes China/Taiwan relationship. Moderates Europe/Russia energy issues. we have not exactly been a peacemaker in the middle east, we have been a warmaker. But US understands that peacemaking is important, and if the United States doesn't do it, who will? Joel's note: pretty sure there's a logical fallacy there: the need for peacemaking doesn't imply the US will do peacemaking
• Pratap Bhanu Mehta. "We first met in Harvard many years ago"
• Will all of the current power brokering lead to new or improved institutions? It may help some stability but will not lead to a just global governance architecture. What characteristics do the powers bring to their brokering (US, China, India, Russia)? All of them have a great sense of entitlement in their role; believe in great power exceptionalism. Used to be a saying, Think globally, act locally, but great powers seem to believe, act globally but think locally. So we may get peace but not a just system.
• I'm skeptical of the term Asia. Is it just a geographical reference? Surin talked about regionalism. But major powers (China, India, Japan) are deeply divided by history, even though they've found sophisticated ways to tolerate each other.
• The big question in Asia is thus, what will we bring to the table that will be different from great powers in the past, or will it just be more exceptionalism, etc? If so, prospects of global governance are dim.
• India's inhibition in Myanmar is an example of how domestic politics in developing countries constrain their international boldness
• There is a real danger of an arms race escalating. You can see a circle of economic integration rising, and diplomacy. But we are going to see perhaps the biggest military expansion that Asia's seen in a while—arms race, search for bases, etc. We hope that that could stay just a sideshow, but that's just a hope.

An hour for questions

• Slaughter: there's been consensus for a long time that accommodating the rise of China and India is the main issue for the US. The record of great powers accommodating other, new great powers is not good. One way of reading the difference between the Democrats and Republicans is that the Republican platform is much more about maintaining primacy, hegemony. Democrats are about recognizing a multi-polar world. This doesn't go over well in speeches.
• Audience member: let me challenge the consensus that the US in dealing with Asia. It seems to me that the US is basically disengaged with Asia. Particularly the current administration (J: See my previous note about Rice and ASEAN). Slaughter: It's a tough question, what's the right balance for the US? Jim Baker position: you (Asia) can't meet without us (US).
• Pratap: It's probably a good thing that Asian discussion is mostly technical because at the more abstract levels there is much less agreement (nuclear power, human rights, etc). Surin: After the Asian Crisis (1997) Europe went away for a while, now coming back.
• Dean: if you want to see whose mental maps are aligned with the new world order ... in America there's a much greater appreciation for the rise of Asia than in Europe.
• Question from Shanghai U: I see China's economic rise: what are the principles of China's growth? Is it something unique about China, or adoption of standard market principles? Pratap: the reason we tend to talk about Asian globalization as something different from just the market is that ... (didn't hear a clear reason). Pratap: China is not just following the existing norms (UN, etc) but playing with them. Slaughter: US has binary view, that EU is either the United States of Europe or nothing important. This is false; EU is a new kind of system. The question is, will Asia pioneer yet another new kind of entity?
• How do you deal with the fact that, after 10 years of engagement with Burma, they have in the words of minister Yeo (who left after his speech) switched to reverse gear. Pratap: If New York consensus is that issue is domestic, not regional or international ... Look at how we tried to solve the Korean Peninsula; we solved East Timor, or the first part of it; we solved Aceh; it's largely regional solutions. In the beginning if you open it up too far, too big, it's going to be too complicated
• Hong Kong question: In times of crisis you need US dollars to fix your economy. So how can you really have a regional solution if US dollars are still key in a crisis? And in Europe, there's a common currency. But there's no move to a common currency in Asia. Didn't hear direct answers. The Asian crisis triggered closer community, like ASEAN+3.
• Audience: I'm surprise that there's been no mention of democracy in the debate. A: we could have a long discussion about that. Slaughter: Democracy is an international norm. Hu Jintao mentions it almost as much as George Bush. Joel's note: and they are equally sincere about it.
• Slaughter: think about China and the West, instead of US vs China. Regional framework can dissolve great power rivalries (France/Germany). My Sox-watching neighbor notes that France/Germany war was unthinkable in 1905 as well.

• If you wish you had been at the dean's speech about globalization the other week, you can catch it December 1 at Function Room Ocean 6, Level 2, Pan Pacific Singapore; I guess we were the out-of-town audience.
• Monetary policy's purpose is price stability. The US central bank buys or sells bonds to affect interest rates. The Fed charges banks at the Primary Discount Rate to borrow directly from the Fed.
  
  
  
  Changes to the Discount Rate are usually mirrored in the prime rate (banks to good customers) and the Fed Funds target rate (banks to banks).
  
• My Q: Is the US Fed unique or do most other countries have central banks that serve similar functions? (I know a lot of countries have central banks; how many of them do what the US does; how many of them are as successful/unsuccessful?) A: see this chart from the IMF. For example, Singapore uses the exchange rate to control prices. Hm, does that mean they buy and sell currency the same way the Fed buys and sells bonds?
• Here's a detailed description of a Federal Open Markets Committee meeting.

Time for presentations. This week's chart topic is fiscal balance and GDP growth rate.

• Bahrain. Includes price of oil as a bonus data series, but it doesn't seem to be adjusted for inflation. Oh, wait, it matches this so I guess it is adjusted. 35% of public expenditure is for security (military and internal police). Another presentation that involves reading written notes out loud; and we only got to 1990 by the 5-minute deadline. Why doesn't anybody practice with a timer? The other frustrating part of these presentations is the tendency to come up with an explanation of every twitch of every line. Remember how much noise and junk there is in this data. Just pick one or two huge changes or other features and explain those.
• Germany. Double-digit growth after WWII thanks to recovery and the Marshall plan. Huge spike in GDP growth, up to 14 percent (according to IMF, though other sources disagree (Hah! See my point in the last bullet), after unification in 1989. Even though Germany pushed for the Euro pact of no big surpluses, they themselves didn't abide by it.
• Malaysia. Oil crisis of 1973, which pressured countries supporting Israel, which hurt Malaysia's export markets, which cut GDP growth from around 10% to .8%. Response was government spending to compensate, which blipped up the deficit spending for a year. Another oil crisis in 1978/79, but huge deficit spending (16%) keeps GDP growth up ... for a few years. "Electronic Crisis" of 1985 triggers recession. Huge FDI leads to sustained 10% annual GDP growth 1988 until the 1997 Asian Crisis.
• Singapore. The story of the Singapore economy over the last 20 years. Early 80's, 30% of GDP is shipping. My bosses told me, just by looking out the Ministry window at the shipyards, you should be able to tell how the economy is doing. 1985 recession. Investment in human capital for financial service industry (the FIRE economy?). Then the Asian crisis, dot-com burst, and SARS. Tax reductions. By 2007 financial services are over 30% of jobs. Assets under management are up to 17 billion from 400 million. (Total global assets under management are about 50 trillion US dollars. Huh, according to Wikipedia, the biggest investment fund in the world is the Scottish Widows Investment Partnership. That's certainly something you would want to independently verify.)
• The Phillipines. Growth around 4 percent, except for the 1997 crisis. Budget surplus 1994 to 97, then back to deficit. One of the lowest tax rates in Asia, at 12% of GDP. (The US is around 25%, which puts it near the bottom of the OECD.)
• Singapore regularly runs over 10% surplus. In `85 and `01, Singapore used deficit spending to halt recessions very quickly. But in 1997/8, Singapore dipped into a recession for a year and recovered without any deficit spending. A classmate comments that this may reflect changes in regime; the current administration (Lee Hsien Loong) may be more Keynesian, whereas Goh (1990 to 2004) was more libertarian. Back in '85, Lee's father was Prime Minister. Another classmate says what I was thinking, that the fact that all three recessions ended in a year, even though only two had deficit spending compensation, suggests that there is not such a clear cause and effect.

Here's a nice picture of the total US debt over time. The US is the thirtieth most indebted country by % of GDP, though of course the biggest by total amount.

This is a real wow: a huge graphical representation of the 2008 US budget.

Microeconomics

• Externalities. Economic efficiency requires that collective marginal benefit equals collective marginal cost. Why do anchor stores pay much less rent per square foot than specialty cities? They provide benefits to the other stores. Classmate comment: also it costs more to replace them. Here's a paper on the topic. Then I got distracted reading about malls and ended up here. How cool is this?
• Resolving externalities. The example is somebody starting a business that' beyond a certain investment, takes too much traffic from a nearby business. The optimal point of investment for the collective group is different from the sum of the individual optimization points. This is another flavor of the tragedy of the commons.
• Intel asked PC manufacturers to pay it for the Intel Inside campaign.
• Marginal cost and benefit to environment of pollution. One solution to externalities: impose a fee. Another: have an emission standard (cap and trade. One problem is that it rewards initial heavy polluters with big caps). Fees vs standards depends on the nature of the uncertainty; when uncertainty is more about quantity, use a fee, impose a standard. Fees achieve more efficiency because those who can benefit from pollution more can spend more to pollute more (or invest more in abatement).
• Pigovian tax, a tax on the polluter, brings the social optimum and the private equilibrium closer together. However, the polluter/producer will pass on some of the costs. the "incidence" of the tax lands on both.
• Using taxes to cut down on the use of plastic bags.
• Indonesian forest fire problem. Indonesian farmers burn down forest to clear space for new crops; causing massive air pollution every year. Complication: many of them are burning down forest to plant palms for palm oil, which companies in Singapore etc then buy.

The legislature recently adjusted some details of Singapore's Penal code, reviewing 360 offences and amended 152 ("Male homosexual sex to remain a crime", Straits Times, 18 Sep 2007). Some highlights:

• "Anyone who knowingly commits an act aimed at causing religious or racial disharmony or enmity between different religious or racial groups may be jailed for up to three years, or fined, or both." ("At a glance: What's new, what's expanded;", Straits Times, 18 Sep 2007)
• "Abduction, such as when a loan shark forces his debtor to go elsewhere for discussion, is punishable by jail of up to seven years, or a fine, or caning, or any combination of such punishments." (Straits Times)
• "Terrorists intending to hold the Government to ransom will be punished by death, or life imprisonment with caning or a fine." (Straits Times) That's quite a range of possible penalties.
• Male homosexual acts remain illegal, though female homesexual acts apparently are legal. (See section 377A)
• It remains legal for a husband to rape his wife (see the exception under 375)

The Sep 20 2007 paper then had a few nicely timed followup articles. Headlines including "7 in 10 frown on homosexuality, NTU survey finds" and "At SICC, more democracy may not be a good thing" (an oh-so-subtle story about how democracy is causing problems at a country club). Singapore Press Holdings: Singapore's answer to Fox News.

A letter-writer on 16 October says, "I SUPPORT the retention of Section 377A ... In fact, the removal of this law will lead to the disintegration of our social fabric, the family unit, which the Government has been establishing pro-actively." On the other hand, the Straits Times senior Writer Andy Ho does boldly denounce marital rape in a 2 Oct editorial.

Update: Enjoy the bigotry.

I missed a creationist lecture to go on the previously scheduled tour of Changi Naval base. The parts we saw, the lobby and presentation room of the main building and parts of one of their locally built big ships (an LST, "Landing Ship Tank", multi-purpose workhorses which can serve as amphibious assault ships, transport ships, humanitarian aid ships, and/or micro-aircraft carriers at one twentieth the size and with two helicopters instead of a hundred planes), were extremely clean and apparently well-designed. The administrator of our school retired early this year from the Navy as a Colonel and commander of a ship, and he arranged this tour. Some notes:

• The briefing was thorough and good. The slides all featured this text in the footer: "Operationalising Fleet Tansformation - moving forward together"
• The CEP was discussed again. In the Navy, it refers to the highest rank you'll reach before retirement. It's set by age 25 or 30. The Chief of Navy is 40, which is old for the Navy.
• The Navy (and all of Singapore's military) is modelled after the Israeli army. In turn the Emirates military, I believe, is modelled after the Singapore military. Which through the transitive propery means ... you do the math.
• I don't deal with our administrator much other than nodding to him in the lobby, where he seems fairly quiet. But when he said, "we are a blazing sword," and repeated it several times, he was quite scary.
• The Singaporean navy ships are heavily automated and operate with a fraction of the crew of comparable ships.
• I asked what percentage were women and what positions they could hold. Women are 10% of the LST crew and command some of the smaller ships. A woman was chief of engineering on the ship we toured. Women are not barred from any positions in the Navy.
• The Colonel talked about the job of the military planners to maintain a balance of power in the region (with Singapore on top) without provoking an arms race. Singapore spends, remember, 6% of its not inconsiderable GDP on its military. Some system procurement is delayed solely to keep from getting too far ahead. I personally wonder to what extent it's really a three-way dynamic: balance of power vs arms race vs elephant repellent
• I spoke with a captain during the tour. He said his CEP was Lt Colonel, but he still hoped it would go up. His first contract will expire in 3 or 3.5 years and he hasn't decided whether to renew or not. He was in his mid-twenties, I would guess.

Update: See also this post

Dean Kishore Mahbubani spoke for an hour in our Negotiation class. (I wonder what he thought of the donut box labeled "For the lower class"?)

I spent 33 years of my life in diplomacy. You cannot learn to swim on land; you cannot learn negotiations unless you've done it yourself. I've attended virtually every major meeting, UN, non-aligned, G77, African reform.

When the negotiations begin, I hear four voices in the room. The most important voice in any room is the voice of power. You almost never, ever get a level playing field in negotiations. Anecdotes from UN security council. Make sure you have the support of your own country or you will lose your job. That's power. If the US decides it will take a position, you can't change it.

The second voice is the voice of reason. I'm pleased to inform you that that can also work. There was one issue on which Singapore fought the United States over the bizarre issue where Ambassador Holbrooke, in an effort to persuade the US Senate to pay UN outstanding dues, made a deal with the chairman of the Senate Foreign Relations Committee that Holbrooke would negotiate lower fees (from 25% to 22%) and then the US would pay up back dues. But the UN rates are set by percentage of global GDP, with a ceiling of 25%. US went to rich countries, Japan, etc, Singapore. Various countries agreed bilaterally to pay more, but Singapore refused. Dick Holbrooke used every method possible to twist my arm. I would go to parties and other ambassadors would ask me, "what did you do, Kishore? Holbrooke is shouting at me." I stayed calm, stayed cool, used the voice of reason. Amazingly enough, it worked. Holbrooke went to the ambassador of Namibia for support, "Singapore does nothing for you, you have to support us on this," and the ambassador of Namibia said, "actually I heard Kishore's arguments on this and they are quite reasonable."

The third voice is the voice of justice. Sometimes power doesn't get you everywhere. If you use your power too far and go against some principles of justice people will not go along with you. The case of Palestine. Just before the UN opens each year, a US ambassador goes to every country's ambassador and tells them the US position on every expected issue. The US mounts a massive lobbying effort to prevent countries for voting for resolutions that criticize Israel on the Palestine issue. Despite the fact that there's no countervailing force lobbying against America on this issue, countries still look at the contents of resolutions and say they are fair and vote for them. Why? Considerations of justice. They believe there will be no peace in the Middle East unless the Palestinians get a homeland. The Palestinians have also learned not to be too extreme in the language. The example is the resolution equating Zionism with racism; it passed in the General Assembly but created such a powerful backlash that it was formally rescinded in the General Assembly. The US won that on the merits of the case.

Another example is Cuba. Every year about a hundred and seventy or eighty countries vote for a resolution that the sanctions on Cuba are unfair.

I use the US as an example but it was the same with the Soviet Union. The general assembly also defied the Soviet Union on some resolutions of justice.

The fourth voice, the most important one for small countries, (lots of guessing in class, hint: starts with a C). It's something you have and I've seen the South African ambassador use it. Classmate answer: Crime? (dean heard "cry", but we all laughed either way). A classmate finally guesses: Charm.

I was amazed to discover in 1984 that the single most effective ambassador was from Uganda, Olara Otunnu. He was then only 29 or 30. He was charming.

When I go into a room to negotiate for Singapore, I tell myself I only have three weapons, reason, justice, and charm. Every negotiation I chaired ended successfully. I had some close shaves. Once the US delegate, at the last minute, said he had new instructions from the Treasury. I lost my temper and scolded him in front of everybody, told him to go back and tell the Treasury we cannot accept these terms. I was bluffing.

most negotiations end at 3 am or 4 am; people are exhausted and say, let's settle. Once they came to be at 3 am (the Holbrooke issue of dues) and said, we still need one million dollars, which was much less than they had asked for. I called Singapore, and they said okay, and that's how it ended.

The world's best negotiator by far, he has brought to a close two big multinational negotiations, he lives in Singapore, his name is Ambassador Tommy Koh. He completed the Law of the Sea negotiations, he also completed the negotiations for the prep com before the conference of the environment.

Q: Those with power, like the United States, do they always just use power? A: In my two stints, I had to deal with completely opposite people from the US. First, Jean Kirkpatrick, was just pure power, didn't bother with reason or justice. She was one of the most difficult people I worked with, was succeeded by Vernon Walters. He was the most charming ambassador. (Joel's comment: Interestingly, the third google hit for Vernon Walters is a eulogy from, of all people, Iraq uber-hawk Michael Ledeen, who recounts, "the interviewer gave him a great question. 'Tell me, General, in your diplomatic activities, did you ever use flattery? And if you did, how did it work?'. Walters answered in a nanosecond: 'Anyone who thinks flattery doesn't work obviously has never had any.') He called me, he was 75 and I'm Asian and thirty-something, so of course I'm going to his office, but he insists and comes to my office. By the time he came I was ready to give him anything he wanted.

There was a big fight in the UN when the US wanted to invade Haiti. They knew China would oppose. Madeleine Albright asked how we avoid a Chinese veto. Cameron Hume—he wrote a book by the way—said, we'll pay a visit on the Chinese ambassador. US ambassadors hate to call on other ambassadors.

Holbrooke; really a good negotiator, really tough. John Negroponte is the exact opposite of Dick Holbrooke, very nice, very helpful. I can tell you it is the ones who are charming who are far more effective.

Q: How did you come to be an ambassador? A: by accident. I was bonded to the government after college, they assigned me to the foreign ministry. I tried to resign after a year but ended up spending 33 years there.

Singapore has always been negotiating with Malaysia. How much does the historical baggage play a role in constraining the results? A: The Singapore/Malaysia relationship is a neurotic one. After getting married and divorced, we still live in the same house. There have been successful negotiations; we have reached agreements. Neighbors have trouble. You watch the US-Canada, US-Mexico, Malaysia-Indonesia negotiations, all very difficult.

Personal relationships matter a great deal. Why is Asia at peace? Golf. I achieved many of my negotiations on the golf course. It's a completely different environment, you're making bets, playing around. I would usually wait until the end of the course, have a couple of beers, and ask, "why are you giving us so much trouble on this thing?" and we would settle.

N.B. one anecdote was removed at the Dean's request.

Sri Chinmoy died in New York last week at age 76. I learned who he is through the excellent vegetarian restaurant in San Diego, Jyoti-Bihanga, and later saw and walked out of his horrible concert. In Seattle I discovered that the Longshoreman's Daughter restaurant had been replaced by his Silence Heart Nest. As Indian gurus go, he fit the template, including the cult of creepy followers, the range of businesses around the world, allegations of sexual misconduct, and claims of impossible feats. He deviated from the template with his residency in New York City, his lack of claims of divinity, and his penchant for lifting people up several inches (on complicated contraptions that allegedly provided no mechanical advantage) for peace. You can't really go wrong with lifting people up for peace.

Other Sris whose restaurants I've eaten at and liked: Sri Sathya Sai Baba, apparently less benign than Sri Chinmoy, and Swami Shantanand.

Student Feedback

• I'm surprised at how many students find the very basic economics classes challenging and/or new ground. A classmate suggests a 2-week prep class (similar to orientation, or the 5-week English refresher that some students took); I would like that if there was an option to test out of the class after a week or two of review. There is a general dislike of economics in the class, which I'm afraid may reflect a distaste for math and numbers and statistics. I can't imagine anyone getting much value out of our economics classes, which are too detailed and broad to be a simple refresher, but simultaneously much too fast and superficial to let anybody learn much.
• Discussion about how to integrate the very frequent guest lectures and seminars; currently they are ad-hoc and unrelated to class. Yes, but the guest lectures are all scheduled opportunistically. Yes, but the classes could then be more flexible.
• Different learning styles. Some students want steady exposure to concepts. I want deep exposure, to reach a-ha moments, and then a series of cycles that is each deep but also revisits the same topic/subject/learnings to make new connections. Discussion about doing the basics (theory and practice, getting used to memos, etc) first, in depth and without so much context switching.
• My issues: less lecture, more participation and work. Related to that, is there same way we can integrate the classes, possibly by having case studies that are different perspectives of the same issue? First from an economic standpoint, then media, then negotiation, etc, and finally policy. (There are about 18 electives so that's a lot of prep work and most students will see only the core (econ and policy) and one or two other perspectives.) Could we somehow use the speakers in this role? Many of the speakers are here for a week as guest scholars. My G2 groupmate and I were able to interview the former Thai finance minister about the economies of Vietnam and Thailand. Even without much prep, students could interview the same person from different perspectives and each contribute a paragraph or two to a summary.
• Classmate: pay more attention to non-native English speakers. Response: the people who struggle the most will end up having gained the most. (That's cold comfort for people who are, I would assume, always behind and less able to absorb the primary content of the course. Of course, you never end up using exactly what you were supposed to get out of school, so maybe that's moot.)
• Not every instructor has the same method of putting their assignments in IVLE. (Prof makes a guilty face.)
• A classmate complains of isolation from Singapore, just going from school to housing and back. I personally am somewhere between satisfied and overdosed on Singapore exposure, but I have (expensive, dog-friendly) private housing near campus and I've gone to almost all of the excursions and many of the lectures and events.
• A classmate complains about the many different groups. Prof comments that our group work for his class (that's our G5) is better than our individual work.
• A classmate says that she thinks all of her assignments to date have been crap - i.e., okay for the pedagogical purpose but not up to standards of her previous job. I feel the same way about mine, but am not sure that's a real problem.
• I spoke up with my point about nobody in faculty/administration having a holistic student perspective, and most of the class nodded and murmured agreement.
• A classmate IVLE forum chaotic and overwhelming (and the other classes mostly silent). I'm pretty happy with the forum for this class, as I've previously noted, although I agree it could use gardening.
• I personally have written about 30,000 words (plus a few thousand words of quotations) in my blog so far this semester; without it I think I would have learned half as much. I feel like it's really helping me learn—the act of writing draws me into more detailed reading and thinking. I'll start to criticize something I've read and then be forced to re-read carefully to make sure I understand the point I'm attacking, and then I'll have to do more research to dig up more facts, and then I'll have learned something.
• Classmate suggestion: topic-based work, like land, or taxes.

For the rest of class we watched Our Brand is Crisis, a documentary about American political consultants in the 2002 Bolivian election.

"I" refers to the dean unless otherwise noted.

• There is a conception that development is very difficult, we don't know why it succeeds or fails. My lecture is that it can be done, any state can do it. The story of development is the story of a big lie. Most development aid doesn't work. Ashraf Ghani said that for every dollar of foreign aid sent to Afghanistan, ten cents reached Afghanistan, 90 cents was spent in the beltway. My own guess had been, 90 cents goes back to the donor country. Development comes when you yourself do it, and that's what the Singapore story is all about.
• Joel's sidebar: browsing from the Ashraf Ghani page led me here. I wasn't aware of accusations that Korea bought Ban Ki Moon's secretaryship.
• There were no celebrations when Singapore became independent; LKY went on TV and cried and apologized. The perception was that no city can survive without its hinterland.
• MPH formula
• M: Meritocracy. Why is Brazil a world football superpower? They take talent from anywhere, any class, any city or slum. When it comes to looking for economic talent, Singapore goes everywhere. And Singapore takes more time and energy nurturing people at the bottom than anywhere else. Some people say Singapore is elitist, and that's true, but it's a meritocratic elite that's constantly changing. (Joel's comment: hah! See this previous post for a trivial rebuttal. Plus of course the fact that the current Prime Minister is the founding Prime Minister's son.)
• Singapore compares its lowest 5% of students to other countries; Singapore's lowest 5% are better. IIT of India trains and develops the best brains in India; the ITE in Singapore is a school of last resort but it won an award. In other countries these students would be finished, but the ITE manages to transform them. (Joel's comment: or perhaps this tells us that Singapore's initial assessment of "quality" in children is a poor predictor of future performance)
• How does Shell nurture managers? They have a different initialism: HAIR: Helicopter, Analytical, Imagination, Reasoning. In Singapore ministry, they used to rank all 250 people by CEP, current estimated potential. You are supposed to reach your CEP by age 45. So your promotions are scheduled to put you in the highest position you are expected to reach at age 45. As long as there is no personal preference, the system works well. The bottom 5% are then asked to leave. So. Self-fulfilling prophecy much? Here's some critical thought from a Singaporean, who quotes a US military officer: "The result of this system is that officers are selected and groomed for even the most senior leadership positions in the SAF based on little more than on how they performed as a cadet during OCS and the strength of their high school transcript." Dean's analogy: let's say you are a B-league footballer. If you play in the A league, you cannot run as fast, cannot perform, cannot keep up. [When you cut the bottom 5%] you are being kind to people in some way, by not forcing them .... There's zero unemployment in Singapore so they still have a job. It takes at least three to five years to assess someone's potential (this contradicts the link above). The Dean can't understand why more organizations don't adopt this system. Do we begin to understand yet why so few minorities have senior positions in Singapore?
• "[CEP] is calculated based on a set of 10 criteria. As far as I can remember, they're -- political sensitivity, imagination, sense of reality, communication, leadership, teamwork, respect accorded by peers, ability to handle pressure, problem solving ability and most importantly ... the person's ability to identify problems within the larger context and solve them accordingly." (source)
• P: Pragmatism. Singapore is the best copycat country in the world. And we don't understand why other countries don't copy more. Singapore learned the art of copying from the Japanese, who learned it in the 1850s.
• Classmate comment: India has this comment. We copied our constitution from other countries in the world. Classmate rebuttal: "But could not implement!"
• When you grow up in a colonized country, it is debilitating. I grew up in a British colony. You grow up to believe that you are second class, that your colonizer is always better. Singapore is one of the few countries that mentally decolonized itself very fast. Now we have succeeded so well we are running out of countries to copy. Singapore Airlines is the best airline in the world; who do you copy from? The four tigers copied from Japan, the ASEAN tigers copied from the four tigers. Now Pakistan has implemented state-of-the-art civil reform. (Our Theory and Practice class has made the point that policies from other countries cannot reliably be copied and pasted to other countries with different context or culture.)
• After Port of Singapore was told by Rotterdam that they were the best, they became arrogant and lost two big clients (including Maersk) to a nearby Malaysian port. But they became humble and recovered new business and made up the TEU volume.
• H: Honesty. Singapore's biggest competitive advantage. The Dean's ten commandments for developing countries. Singapore used to be jealous of Sri Lanka. Now we left them far behind. They made many mistakes. They didn't handle their minorities right. Many countries have huge amounts of oil but so little of the money goes to the government. Except for Norway I suppose.
• Three key leaders of Singapore, Lee Kuan Yew, Goh Keng Swee, S. Rajaratnam. All were completely uncorrupt. Li Ka Shing gave the dean a pen; the dean (unbeknownst to LKS) had to pay for the pen, over a thousand dollars, in order to keep it and show it to LKY later.
• Corruption in the developing world is illegal; corruption in the developed world is legal. Example: You work at the Pentagon and select a Lockheed Martin bid. After you retire a year later, you get a job at Lockheed Martin. Or take Clinton, who now makes a hundred fifty thousand dollars per speech. Joel's comment: or take Gerhard Schröder, who went from German premier to Gazprom employee. The day after Greenspan stepped down, he spoke at a hedge fund meeting.
• Singapore is unique, the only city-state. Classmate objections: Vatican City! Monaco!
• Singapore has a thirty-year land plan. World's best sewage system.
• Classmate comment: we fall into the trap of needing individual leaders. But Singapore has succeeded because of the system. Dean: Singapore has developed deep pools of excellence in many fields, which takes years and years. But is this because of the small size and the single level of government? Believe me, any country can do this.

• Just how much power has shifted to private actors? One example is that credit creation has become a private sector activity. MNEs can now create credit independently of the (heavily regulated) banking system, and this contributes to rapid MNE expansion.
• From 1950 to 2000, global exports grow much more quickly than global GDP. Export starts making up a big portion of GDP, when before it hadn't. Q: what about our readings that argue that pre-WWI economics were in fact globally integrated? A: An aberration related to wealth extraction from the colonies.
• More details about globalization of the economy as measured by FDI, international debt securities, etc. Stuff like this. MNEs now employ 73 million people, more than 2% of the global labor force. They account for 20% of global trade. The largest 200 control 46% of global FDI. Growth in mergers.
• "Of the world's leading 100 largest economic entities in 2000, 37% of them were MNEs. In 2005, 42% were MNEs." Combined sales of ten largest MNEs exceeds the combined GNP of the poorest 100 countries. Questions about how you can (cannot) compare revenue to GNP. But anyway, is this surprising? Joel's opinion: not necessarily. How many people do the ten largest MNEs employ? How does the total labor force of the poorest countries whose total GDP equals the profit of the 10 biggest MNEs compare to the headcount for those MNEs? Update: After 45 minutes of frantic research, assisted by IM buddies when the NUS web proxy died, I have answers. The 10 most profitable companies in 2006 made US$196 billion (in 2000 dollars) and employed 1.8 million people (Forbes). The 76 smallest national economies (as measured by GDP in 2000 dollars), from Kiribati ($54m) up to Paraguay ($8.3b), produced $198b with a labor force of 195 million. So the average MNE worker was about 100 times more productive than the average small-economy worker.
• Why do MNE's invest overseas? Jump tariff walls, access local markets, cost differentials, competitive advantage, transfer pricing (?? what the hell does transfer pricing have to do with it? Shifting billions between countries to make the accounting easier? I must be missing something. Should pay more attention instead of playing with animated charts. Update: by transfer pricing, he apparently means shifting money to different jurisdictions to avoid taxes. Which is not transfer pricing. Update: apparently it is).
• MNEs prefer investing in within their region or within their global class. Money comes from the rich and goes to the rich.
• What is Susan Strange saying the reading? Production shift from national to world markets.
• Extended class discussion about FDI that I missed because I was screwing around with GDP vs profit data analysis.
• How can states attract FDI? Infrastructure, block grants, co-financing, ability to repatriate earnings, provide attractive workforce (educated or imported). Low taxes are not as important because MNEs can evade most taxes.
• Pros and cons, love/hate for FDI. Some states are better than others at protectionism, especially Japan. But even the Japanese mom and pop shop lobby can't hold out forever. Will small EU farmers be the next to go down?
• Other things that can go wrong with FDI: Classmate raises the Occidental mine explosion in Bangladesh; Occidental is now Chevron, but Chevron Bangladesh is registered in Togo for tax evasion purposes, and Togo isn't a signatory to the International Court. Another example in Ecuador: local attempts to end an unfair agreement faltered when the US threatened Ecuador's major export to the US.
• MNEs pushing for MFN status: local branches of MNEs should be treated the same as local companies.
• What else can MNE's do to bypass state regulation. Examples from infant formula industry. Cotton subsidies. Mining companies registered in the Netherlands. Local partners. Capital strikes. Thai corporate income tax is 30 percent.
• The UN Global Compact for corporate responsibility. I.e., the CSR farce. Argument in class that motives don't matter as long as they actually follow the conduct code. But of course they don't actually follow the code, they just take care to appear to be following the code. Also, pollution from SMEs.

These are fancier than my usual notes because it was my turn to do the formal reading notes for the class.

Week 6 Takeaway Points

Ole Jacob Sending & Iver B. Neuman, "Governance to Governmentality: Analyzing NGOs, States, and Power", International Studies Quarterly No. 50(3), September 2006, pp 561-672.

Global governance literature makes three claims:

1. Government must be studied as a process, not as an institution

• One problem with this claim is that the literature doesn't provide analytical tools for these processes

• Another problem is that the literature focuses on who the actors are instead of what they do

2. non-state actors have become much more powerful

• However, the literature (incorrectly) assumes a zero-sum game

• In fact, states leave space open for non-state actors

• Non-state actors have always had power, but as the "rationality" of government has changed, exactly which non-state actors have power has changed

• Joel's criticism: I think the article overstates how much power non-state actors had in the more distant past, say, before WWII and before the 20^th century. Their examples are all very recent, since WWII.

3. political authority is increasingly dislodged from the sovereign state

• But, the key findings in the literature are still dependent on state sovereignty framework

• They continue to emphasize authority, the power to enforce compliance

• Joel's criticism: This point was poorly made, with a flurry of big words but a paucity of clear examples and explanations.

A different approach is required, "governmentality" (from Foucault)

• sovereignty is about authority; in contrast, the act of government is about achieving goals of population

• governmentality supplements, rather than replaces, sovereignty

• It uses laws as part of a process to achieve results, instead of as an end-goal

• society is both the object and subject of government, not just the object

• investigate specific practices and techniques as an empirical phenomenon. Focus on practices, not institutions

• identify the thinking patterns behind different modes of government

• identify how certain identities and action-orientations are defined as appropriate and normal

• civil society and its representatives have power relationships

• this is part of, rather than opposition to, the state's exercise of power

• Joel's criticism: This is true only in the broadest definition of the state, too broad to be useful. e.g., does the state equal the people? Not exactly. The state is a set of institutions, which can have its own agenda and which can (in part or in whole) be captured by specific interests. Since civil society is never unanimous, the state institutions must take sides to some degree. So parts of civil society can easily be in conflict with parts of the state

Case Studies

1. transnational advocacy for reproductive health and rights

• John D Rockefeller III set up Population Council

• 1940s to 1970s saw foreign breeders as not fully rational and empowered, therefore only "objects" of government.

• Emphasis on study of the objects.

• Governments work with non-state actors (universities, foundations)

• starting in 1980s, change in emphasis so that affected people are subjects as well as objects

• power shifted from elite groups to grass roots. In traditional view, this is a shift in power. in governmentality view, this is a shift in how the government projects power, away from one channel and now through a new channel

• 1994 UN ICPD conference, emphasis on "reproductive health and rights".

• Rio statement

• becomes more political issue, womens' rights

• Joel's criticism: this is still the elites trying to change the behavior of the others, just more subtly. Now the elites want to give the masses "choice" so that they will choose to do the "right thing", rather than just using power to make them (through education, etc) do the "right thing". But the elites are still trying to control the situation so that the masses will do something the elites think is the "right thing." But this line of criticism degenerates to the argument of how universal human rights are, which is interesting but not what the article was about.

2. international campaign to ban land-mines

• non-state actors already involved as early as the 1940s

• Mix of cooperation and competition between government and NGOs.

  • Norwegian government provides funding in 1970s/80s to get many anti-landmine NGOs going; later the NGOs criticize the government for not doing enough about ending land mines.

Stephen J. Krobin (2002), "Economic Governance in an Electronically Networked Global Economy", in Rodney Bruce Hall & Thomas J. Biersteker (eds.), The Emergence of Private Authority in Global Governance. (Press 2002), pp. 43- 75.

• Globalization is as big a system change as feudal to Westphalian.

• "the emerging global world economy compromises the effectiveness of national market-based economic governance," but probably not of national territorial control:

  • large scale means markets are bigger than any one country

  • networks are replacing hierarchies

  • migration to cyberspace

• 1990s/2000s globalization may just be a reversion to how things were prior to 1914. Is there a structural change or not?

• MNEs (multi-national enterprises) are still within internationalism. Globalization is different because it fuses national markets instead of just linking them. "The emerging global economy is digitally integrated and entails the migration of markets from geographic space to cyberspace." Joel's criticism: Krobin's said that twice, but he also said that multinationals weren't really globalizers because they are still "firmly rooted in national jurisdiction".

  • If you aren't clear about national jurisdiction over cyberspace, post some Scientology writings or try to hire a contract killer or something and you'll find that jurisdiction is still mostly present and that police and courts may be lagging technology changes but they aren't falling behind permanently. Let's wait until the third part of the article to see if Krobin puts more meat on those bones.

• "I argue that globalization compromises the basic symmetry ... of nation-states and national markets ... as a result ... non-state or private actors are increasingly involved in authoritative decision-making."

• technology risk, not pure physical size, may be the biggest driver of larger scale. "cost, risk, and complexity of technology"

• "an argument has been made that, regardless of how international the world economy becomes, at the end of the day all economic activity takes place within national boundaries. ... that argument is not necessarily valid in a post-modern, electronically networked global economy." because, he says, computers and networks exist operate in so many different physical locations that pointing to a computer in one country and saying 'virtual activity X just occurred here in Switzerland' is meaningless.

• example of major non-governmental issues with states marginalized as actors: battle of AIDS drug prices, conducted mostly between MNEs and NGOs.

• Conclusion: the state won't go away, but both its political and economic powers may continue eroding. Those powers will disperse to transnational authorities, NGOs, subnational entities, etc: "ambiguity, multiple loyalties, multiple levels of authority"

Robert Boyer (1996), $-1òüThe Convergence Hypothesis Revisited. Globalization but still the Century of Nations?,$-1òý in Suzanne Berger and Ronald Dore (eds.), National Diversity and Global Capitalism. : press, pp.29-59.

technologies and lifestyles seem to be converging around the world

• But the world won't completely converge because there are too many differences

• three definitions of convergence

1. economic. extreme globalization, one unified world system. But real world is too complex and imperfect for this.

2. style of development. everyone goes to liberal democracy and capitalism. many counter-examples exist

3. characteristics of institutional settings between economics and politics; models such as mixed convergence and partial divergence.

• No clear trend to convergence in macroeconomic variables. A survey of the literature shows very mixed results.

• collapse of socialist bloc has not reduced diversity

Historical Perspective

• From Keynsian boom/bust choices to expectation of convergence with open markets and technology to per-country differences

• Evidence from GDP figures is mixed

• Some backwards countries stay backwards; others catch up rapidly. I.e., some converge and some don't

• The entire 20th century is a mix of catching up and falling behind. The Bretton Woods period after WWII had a lot of convergence thanks to similar starting points (post-war reconstruction) and following the US model.

Mechanisms

• independent discovery of successful mechanisms (i.e., parallel evolution)

• Diffusion of technology etc

• transnationals as carriers of best practices

• multinational authorities impose order

• None of these mechanism very convincing explanations by themselves. No existing hypothesis is completely convincing, because the real world is messy and complicated.

• If each nation specializes, four configurations are possible:

1. Punctuated equilibrium. Each nation does what its best at. no convergence.

2. Reversal of market shares. Most efficient countries take over.

3. adjustment of institutional forms.

4. Drastic revisions.

• Many barriers to smooth convergence on efficient institutions.

• Joel's criticism of this section: It's much weaker than the rest of the paper. He keeps trying to pick out generalizations and patterns from a small set of simplified data: companies and institutions in various countries in the 20th century, and he resorts to a lot of fairly vacuous prose, such as this sentence about certain European countries manipulating the EU system for their benefit: "Old norms and social values are manufactured again into new institutional forms and sources for external competitiveness."

General criticism

• Boyer sometimes conflates convergence with development; when he says convergence isn't inevitable, he seems to actually mean, development isn't inevitable. He also uses metaphors, including punctuated equilibrium and homeostasis, which I think are misleadingly over-simplifying.

• I agree with the general trend of Boyer's paper, that there are lots of reasons why convergence isn't smooth and guaranteed, and I think I could fairly summarize his reasons as, humans aren't simple automatons behaving rationally, but he would not ever put it that simply.

Six Key Points for Week 6

1. One of the ways non-state actors can influence states is to redefine the norms and systems within which states operate. The Dean's example of this was Al Gore's campaign to raise awareness of global warming, which seemed to serve as the tipping point for a much broader scientific and political effort, especially the IPCC, to convince people that global, human-caused climate change was scientifically undeniable and an urgent problem.

2. There has been a general shift in the last two or three decades among NGOs and international policy makers from seeing the public of various countries as objects of policy to seeing them as subjects and executors of policy.

3. The power wielded by non-state actors may represent a new channel of communication between people and governments, rather than a diversion of a fixed amount of power from governments to non-state actors.

4. Bigger markets, networks, and cyberspace are all eroding national market boundaries.

5. We may be at a turning point from geographically well-defined nations with both political and economic sovereignty to a new system which is based much less in geography.

6. Depending on how you look at the 20^th century, you may be able to see fragments of convergence of political and economic systems and standards of living. But there are many counter-examples, and convergence is much more an illusion than a reality or a natural law.

Liveblogging my econ class just for the heck of it.

Macro

• The difference between capital requirements and reserve requirements for banks. The current reserve requirement for US banks is that they hold cash in their vault (or on deposit with a Federal Reserve Bank) equal to 10% of outstanding deposits. Hmm, does each reserve bank in turn need to keep cash equal to 100% of all of those deposits on hand, or do they also get to do reserves?
• Aggregate supply and demand: Macroeconomists got jealous of all of those supply and demand curves that microeconomists get to draw so they made their own.
• Phillips curve. Apparently inflation correlates inversely with unemployment. But the model doesn't hold up with more data (although Donald Luskin may not be a reliable source, even for graphs. There are various explanations about how all of this works, like employees adjusting to rising inflation and building inflation predictions into their wage expectations. But they all strike me as Just So stories. Everybody has a predictive model with a prediction horizon o negative one: the models each predict the last thing to happen. When the model fails to predict the future, a new model is created to explain the new factors that made the first model fail.
• There is no relationship between economic growth and wealth inequality in the United States in the 20th Century; see graph.
• The current treasury yield curve, which is apparently in a normal state. As per the previous point, "There are four main economic theories attempting to explain how yields vary with maturity."
• Deregulation in the US. Here's a nice graph of how we've gone from one AT&T to about fourteen baby bells and then back to three (AT&T, Verizon, Qwest)
• The Fed chairman is given independence from politics. hah!
• I do have to say that the topic, if not always the substance, of macroeconomics fascinates me. Millions of millions of people making complex decisions and one can almost, almost, describe and predict their behavior in the aggregate. The notion of tracing bundles of greenbacks from the Fed to banks to getting spent five or ten times per year, perhaps in other countries; of the whole fiscal merry-go-round that may or may not be a Ponzi scheme. Maybe it's just money, not macroeconomics, that is so sexy.
• I wish this class were less US-centric. Perhaps that's because most economics work in and study the world's biggest economy? But the US economy isn't the majority of the world economy.
• The main goal of monetary policy is price stability. Singapore's Monetary Policy

Micro

• Some topics for next term: monopolies
• Guns, Germs, and Steel. I went digging for my review only to realize I wasn't blogging in 1997/1998. And my email archives are off-line before 2001. Nuts. Interesting to see the criticism that's accumulated, some of which rings true just in the Wikipedia summary
• Costs. Opportunity cost, sunk cost, economies of scale, economies of scope. Apparently I'm about a month ahead of our reading, which makes me feel better about falling behind the syllabus lately.
• I think the key insight between many of these cost ideas is optimizing for context instead of applying a global optimization rule. And lo, the title of the first slide is "Principle: Relevance."
• Economic Value Added = Revenue - all costs, most notably cost of capital. If you can turn $100 into $120 in one year, you probably did well. If you can turn $100 into $120 in ten years, you did poorly. A charming story about how the EVA consultants helped Herman Miller unlock their potential in 1995-1997. Apparently it's a one-time benefit, though.
• What's the opportunity cost to Singapore of having the Istana (the presidential palace) taking up prime property? What's the benefit? A classmate notes that one sector of Washington D.C. has not benefited in the recent improvements in D.C.'s conditions because of a homeless center. Should the homeless center be moved to cheaper land so that the land can be improved? (How many homeless are there in D.C., by the way? about a thousand? 15 to 40 thousand?
• Example: if Apple bought hundreds of millions of 1-mbit DRAMs in the summer of 1988 for $38 each, and then the market priced dropped to $23 each in January 1989. For setting the price of Macs in 1989, what is the cost of a 1-mbit DRAM in inventory? (Contemporary Macs had 1 MB of RAM, so would need 8 chips. Unless Macs used parity bits, which I seem to remember they used to, in which case they'd need 9.) (This has sent me on a quest for historical DRAM price charts, which despite access to substantial commercial databases is straining my powers of search. Class continues through economies of scale and scope, which I believe I'm already on the record as supporting.)
• Yes! Finally tried a Google image search on "dram price history", which led on page four to this, which mentioned a 1994 article in the Journal of Political Economy, which I was able to retrieve through EBSCO.
• The cost of a pilot for a plane is a fixed cost—you need two pilots for each flight, regardless of size of plane or number of passengers. But it's not a sunk cost, because you can fire the pilots. Question: Is the depreciation of an airplane a sunk cost? Yes and no.

Rough notes on my research paper

Topic: circumvention of the great firewall of China. Possible focus area: CIA funding of wikileaks.

what is the question, keeping in mind that class is states, markets, and international governance? The pieces are all here, states (US and China), markets (private companies that built the firewall, Cisco etc, and private companies that circumvent, like wikileaks), and governance (NGOs and individuals that circumvent). But what's the question?

• is there anything that makes this meaningfully different from, e.g., voice of america?
• does gov't support legitimize or delegitimize private opposition? Would have to think about, who determines what is or is not legitimate? individuals? public opinion?
• who are the players in China internet censorship? states/ngos/private actors.
• do circumvention attempts achieve their goals? must identify goals. how to find out the conditions in china?
• private actors (Cisco, etc)... what about them?

Other things to figure out: what is the problem? what is the rationale?

Other resources/ideas that I may want to incorporate: the "Anaconda in the Chandelier" theory (already brought it up this semester re: limits of public discussion in Singapore); that paper mentioned on Slashdot or something recently about how the firewall may not be all that effective.

plan of action: start looking for research papers and primary sources on google, JSTOR, lexis/nexis, and other sources. Based on what I find, either write a paper which just explains the current situation and actors from a SMIG perspective, or make an argument if I find one worth making.

Discussion

• What is constructivism? Structuralism. Anarchy as the baseline, structure as the defining "stuff", the ontology. Structuralism vs: Agency. People are the defining "stuff". While "path dependency" (which seems to be a pithy but annoying way of saying that your situation limits your choices) and such are real, people still make decisions. Or: structures and people define and shape each other. We exercise free will within structures. For example: if you come upon a big corn field, you can go through it any way you want. but if somebody made a path, you'll probably take the path, though you might still break your own path. My interjection: but you couldn't choose to go through a rice paddy, because you're standing in a corn field, not a rice paddy. (In my version of the metaphor, I guess norms are paths through the corn and the fact that it's corn, not rice, is a harder path constraint.)
• group exercise. What does finnemore mean by norms and constructivist approaches?. The week's reading has a nice chart with the three-stage process
• how do norms impact state behavior

Library training

You can access a huge amount of electronic information through the NUS library system. I did almost all of the research for my first SMIG paper through JSTOR and Google Scholar (plus Amazon to look at a few pages of books here and there, mostly books I own but left in storage in Seattle). Trying to keep an eye on the presentation for any new information (hm, we have access to the Economic Intelligence Unit. Though the NUS web login only seems to work on Windows with IE. That's okay, I'm pretty sure I found subscription access to Economist articles through several other library interfaces). So now I'm playing with bibliography software; I was looking at BibTeX and Lyx but I'm adequately happy with OpenOffice Writer so now I'm screwing with getting Bibus to play with OpenOffice. We have access to MyEndNote.com (a $300/yr value) which is of course a trap to get you put all your research notes into their system so you (or your next institution) have to keep paying every year. Thanks but no thanks to renting my own data back to me.

Of course, after wrestling with Bibus for most of the hour I'm reaching for my wallet to pay for something that works. It depends on MySQL to store information (I tried the SQLite interface and it didn't work for me), so I had to go install and set up MySQL and deal with users and such - easy enough with ubuntu but still a pain), and the OpenOffice integration isn't working for me, apparently something to do with using Kubuntu instead of Ubuntu and also apparently everybody else agrees that OpenOffice in Ubuntu feisty crashes like crazy. But I'm stuck on a more basic problem - I can import a saved citation file from ISI, but it gets stuck in an import buffer and is gone if I close and restart Bibus. There's no obvious way to move it, but clicking in a certain place brings up an edit window which has, in place of a menu, text saying to go to Prefs to set up shortcuts in order to see the menu bar. So I do that, but no matter what I put into the new shortcut dialog I can't seem to make shortcuts, and apparently without those (whatever they are) I can't really import citations, much less export them or automagically put them into OpenOffice. Great promise to bibus, but it depends on a bunch of other software (python, openoffice, mysql) whose integration is problematic at best. All this just to not have to retype citations.

• Wrap up of last week's NYPD Compstat case. I object to the basic premise, that Compstat is the cause of the reduction in crime in New York in the 1990s. Compstat, which is basically a weekly meeting where each week a New York precinct commander meets with the NYPD brass, who grill him (is it always a him? pretty much). It's related to a number of institutional changes in NYPD. Principles defined as accurate and timely intelligence, rapid deployment, effective tactics, and relentless follow-up and assessment. One interesting tidbit it that, in our case, it looks like an NYPD guy named Jack Maple originated CompStat, but both Bratton (Giuliani's new police chief in 1993) and Giuliani tend to take credit for it. (Perceived) success has many fathers. Compstat and its spawn strike me as the same thing as "digital dashboard" or "Business Intelligence", which in turn are basically real-time "balanced scorecards". (For even more buzzwords, see here.) That is, bosses can see information which putatively describes the health and performance of the organization, and the information is a week old or less.
• I'm simultaneously utterly convinced and seriously skeptical of the Compstat process in general. Without good information, there's not much point in having leaders. But public administration (and business administration and any kind of people rules) is all about contradictory maxims; we know that when we use numerical targets, people cheat to meet the targets. So to me, it still circles back to people and trust: the role of management is mostly to enable (hire, fire, promote, provide resources to, direct, counsel, etc) the people doing the actual work.
• Slide claiming that IT "benefit/cost growth = 1,000,000 times over past 30 years". Excuse me, you seem to have conflated computing power with benefit. New computer technology has made a lot of things cheaper or even possible (wi-fi, PCs, bar codes, etc), but improving the benefit a million times? I don't think so.
• e-government movement in phases:
  1. Traditional organization. hierarchical. hand-offs between units.
  2. Add Processing and Networks. hand-offs more flexible
  3. Networked Organization. faster processes, flatter organizations. Outsourced hand-offs and customer self-service.

  student response: e-government vs E-government. "'Little e' eGovernment focuses strictly on putting services online. 'Big e' eGovernment focuses on creating an IT backbone that can be used across service delivery channels (internet, phone, mail, in-person), in a way that improves services and makes sure that service is seamless for anyone that ends up using more than 1 channel to access service"

  Hm. By these definitions neither term covers internal (non-customer-facing) technology; e/E-government is about connecting users of government services to the government via technology. But what do you call using technology to connect and improve communication within the government?

• Talking about the results of Compstat. Jargon alert: what's the difference between outputs, effects, impacts, and outcomes? I can believe a distinction between any two of those terms but not all four.
• Tangent from sustainability: US military success in Iraq defined by IED rates. (?) My personal tangent: why is everybody going along with the IED euphemism instead of just "bomb"?

La Paz case

This week's case study is about a new mayor in La Paz, Bolivia, in 1985. The municipal government (and indeed the entire country) is hopelessly corrupt, and hyperinflation is in effect. You are mayor Ronald MacLean Abaroa: what do you do? This could be a Zork-style text adventure. Our group met for three hours Sunday afternoon to strategize. Everybody posted several-page plans in the forum, and now in class we have five-minute proposals.

Group ??

• Strategic action plan
• transparency, accountability, simplicity, empowerment of customers, culture shift.
• first problem: public works. various reforms.
• second problem: taxes and revenues. Uncouple assessment and collection.
• Joel's response: lots of good details that will fail completely because nothing in the plan address the endemic corruption environment.

Group B2

• Reduce incentives, make corruption high-risk, low-reward.
• Break up monopoly.
• Joel's response: presentation is better in that it more directly addresses the corruption. Both of the first two plans seem to have dozens or hundreds of details; I think these are too many details to oversee.

Group B1

• What to do about the corruption? Make an impact immediately.
• Policy of zero tolerance.
• task force
• identify the big fishes. (group B2 also wanted to find big fishes)

Student feedback.

• Corruption is not the cause, it's the symptom. The real problem is the La Paz government is too big.
• proposals did not take perspective of strategic triangle

More discussion about what corruption is, culture of corruption, other models of corruption. (Several people verged on but did not go all the way to the model of corruption as contagious disease presented in some of the week's reading.) I should mention that I just finished Sacred Games, by Vikram Chandra (which is amazing, and for which a review is forthcoming), in which the pervasive corruption of Mumbai police is just part of the background.

Episodic vs systemic corruption. Who watches the watchmen? Mexican attempt to create islands of integrity by hiring people through intense lie detector tests. Importance of getting broad support for anti-corruption activities.

Singapore has a strong executive branch yet is not corrupt—this is unusual.

Prof at 9:25 pm: give me ten more minutes. (Some students have been complaining that when the class goes long, they miss the last shuttle bus back to the other campus).

The New York Times has a habit of supporting the Yankees in print, regularly featuring Yankees stories on the front page of the sports section while the Mets are buried in the back. The lede on the nytimes.com website takes things to a new level of boosterdom:

Random Observations

• In our theory and practice class we've talked about, and had a few cases, in which bad news, such as corruption in a department, is turned into an opportunity to make needed reforms, as the "strategic triangle" of capacity, mission, and support lines up. But this can go badly...:

  For our would-be "leaders," however—in every country—the situation is different. Of course, they pretend to feel the same as normal people. They give teary-eyed speeches about sorrow and suffering.
  And yet, behind their tears, there seems to be something else. When they think no one is looking, you glimpse another expression flitting across their face. You think it couldn't be. But—yes, incredibly enough, they're smiling. Because before the bodies are cold, before the mothers have stopped shrieking, our leaders are thinking:
  "This is really a FANTASTIC OPPORTUNITY."

• It's hard to google for political scientist Hans Morgenthau's writings on the Armenian genocide when the US Ambassador to the Ottoman Empire from 1913 to 1916 was named Henry Morgenthau (no relation).
• In negotiation class, one pair of students, roleplaying a Florida developer and environmental group, reached a combined score greatly exceeding any other pair in class, or indeed any score possible within the rules of the scenario. How did they reach this win-win? They agreed that the hotel would be "six stories with height of 3-story building". In response, one student said, regardless of their merits as developers and negotiators, we can say that "they are both genetic engineers. In the sense that they will convert us all into pygmies."
• A classmate made a great point in Theory and Practice class in week 4: (My poor paraphrase): "But my happiness may not be dependent on getting roads, etc. Having a voice has its own value." This is the first time anybody's spoken up for the intrinsic value of liberty and self-determination even when it doesn't show up in GDP.
• Good news: the LKYSPP career center will organize a little job fair with public sector orgs and NGOs next spring.
• My friend Nathan brought in a Buddhist lama to bless the internet
• It took me a while to realize it, but there are no power lines or other utility poles and wires in Singapore. It's all buried. I like it; it's a big if subtle part of Singapore's beauty. Also, there are very few SUVs or gratuitous pickup trucks.
• Looking through the traffic logs for aufrecht.org, I saw a new search term landing people on my site: "kiss language school in denmark is closing". Apparently the school where I learned what little Danish I have is closing. I guess that's too bad; they had good stuff and weren't really any more arrogant or xenophobic than Danes as a whole.

Theory and Practice week 5

• What is accountability, what is responsibility for public sector? accountability moments?
• Slide listing different forms of engagement, from Brinkerhoff. Slides matching the readings! Yay!
• Planning decentralization. Not the same as devolution, which is political decentralization. (this page might be due for an update) In SE Asia, spectrum from Myanmar: extreme centralization to Philippines, Indonesia: many types of decentralization.
• Our case study was the Suzhou Industrial Park. Singapore wanted to export some of its bureaucratic know-how to China, on running a successful and non-corrupt industrial park. Now that Singapore is basically rich, they have a very strong interest in helping their neighbors get rich too before they get too upset at Singapore. (That's also a premise, if not so coarsely expressed, of the LKY school itself.) What basically happened was that Singapore went in with good intentions and open checkbooks and ran into a buzz-saw of conflicting objectives at different levels of the Chinese government.
• Even more interesting than the Suzhou case is the excellent discussion about it in the class forum, including posts from classmates with personal connections to the event. The forum for this class is awesome; many different students regularly chime in with long posts, including research and primary sources for case studies so we can see how it really turned out. Puzzlingly, none of the forums for my other classes have taken off.

Class notes for Macroeconomics Week 6

• Money. The big thing (in my opinion, not part of class lecture) to remember about the money supply is that inflation benefits debtors and deflation benefits creditors.
• In case you missed it, there was a bank run in England last week
• fiat paper money - you can't exchange it for anything useful at the bank. My question: it says "legal tender for all debts public and private", so if you have a deal and you pay with cash, the government will enforce the fact that you paid your debt. Isn't that worth something? A: yes, but why enter into a contract for money in the first place?
• Check out this very nice 1901 US$10 bill. It really looks like modern US money. But not all old US money shares this design feel.
• MV=PQ
• "During fiscal year 2006, the Bureau of Engraving and Printing (BEP) printed $33 [sic] million currency notes each day with a face value of about $529 million; 54 percent of these notes are the $1 denomination. About 95 percent of the currency notes printed each year are used to replace notes that are already in circulation." (US Treasury). So the cash money supply in the US increases about $25 million per day.
• You can uncut sheets of bills. 32 ones cost $55, or $1.72 each. Sixteen fifties costs $900, or $18 per $15. What a nice business; you're practically printing money. See also Hell money suitable for use in the afterlife.
• Keynes: an economy can get stuck producing less than it's capable of, because people are reluctant to lower wages (for psychological reasons) or raise prices (did I get that right? perhaps reluctant to raise prices _over_ inflation?). The fix is government spending which, thanks to the multiplier effect, can get a lot of bang for the buck.

Class notes for Microeconomics week 6

• Why does so much rent seeking go on when so many of us should seek to stop them? Hm - somewhere in the flood of recent reading I read that rents are the only real path to wealth. Information asymmetry? Long digressive discussion; I never caught the actual answer
• Note to past self: the name you were trying to remember is "Coase Theorem"
• We had a short but intense discussion as class went long. Key points:
  • Singapore regularly returns excess money to the public, but uses different channels each time: one-time contributions to everybody's pension account, "workfare bonuses", "economic restructuring shares", one-month payment holiday for utilities bill. The form and timing of each such payment is effectively random, which is deliberately planned to prevent these payments from distorting public or market behavior.
  • Singapore's leaders take it for granted that they the only source of new initiatives, and their relationship with the public is to simply continue doing a good job, market their plans well, and stay on top of complaints with a mixture of responsiveness, bribery, and tough love.
  • Singapore is such a simple environment that Singaporean economists are unlikely to make much contribution to the field.

Class notes for Macroeconomics week 7

• Money. Relationship between money and the economy: MV=PQ
• Central bank's role in making money available. Bonds, printing money. There is currently about US$5000 in cash circulating per capita. The lovely paradox is of course that even intrinsically worthless money succeeds marvelously at providing a medium for working markets. Is this a Ponzi scheme?
• Intervention of central banks in controlling foreign currency exchange rates. Q. how much of China's US dollar reserves are literally paper currency? A. It's a mystery what they do with the money, but it's probably mostly t-bills and other instruments. But I want to know how much actual paper cash is floating around. Does China fly 747s full of cash to New York to pay for their T-bills?
• Discussions about multipliers etc. What if nobody wants to borrow money? Then you're probably speaking Japanese.
• Student presentations on inflation and money growth. Hrm; without interest rates, this graph is incomplete. Also, any discussion on inflation should take into account the notion of the inflation rate as a zero-sum battlefield between creditors and debtors (an extremely interesting topic to me, but not in scope in class. Notes to self for future research: FIRE Economy (Finance, Investment, Real Estate) and "Red Pill", also Marxist explanations of inflation in terms of class struggle).
• US. Twin inflation peaks in the 1970s, caused by Vietnam war and printing lots of money. This is really a story about monetary policy; Carter appoints Voelcker, who lowers interest rate to 3%, dropping inflation but increasing unemployment. Both money growth and inflation are far smaller than other countries.
• Iran. Inflation is close to zero until 1970, when it starts zooming towards 35% by 1976, accompanied by money growth. Iranian revolution and radical restructuring brings inflation under 5% within six years, but then it starts bouncing all over the place. Inflation almost to 50% by the end of Rafsanjani's term, back under control with Khatami.
• Thailand. High inflation in 1980 already dropping below 5% by 1982, stays low through the present. Money supply is much higher and more volatile this doesn't seem to have much effect on inflation. IMF intervention after the crises clobbers both inflation and the money supply growth.
• China. Socialist economy up until about 1992, explains why the increase in money growth in 1989-92 was accompanied by low inflation, not high inflation. Deng's socialist market economy after 1992. Inflation and money growth both go up, inflation peaking over 20% in 1995, but drops quickly back to zero. More interesting question that students aren't addressing: how reliable are these numbers in a control economy with a history of some manipulation of exchange rates.
• Aggregate demand and aggregate supply. Long run aggregate supply is vertical but short-run aggregate supply slopes up.

Class notes for Microeconomics week 7

• Student presentations simulating a roundtable with Sen, Stern, Stiglitz, and Miller.
• Sen's points in the roundtable: two ways to get public health: either the whole country gets rich and health is indirectly improved, or the country makes health a priority (c.f. Cuba).
• Stern's points: context and competition are more important factors in enterprise success than whether the enterprise is public or private.
• Stiglitz points: A government which cannot maintain its economy is not a good government.
• Sen (simulated): European agricultural policy, where the strong political support for local agriculture forces politicians. Another example: pork-barrel politics in Japan.

Liveblogging.

• The single point I want you to take away: Nobody knows what's going on in globalization. I know the leading writers on globalization, Thomas Friedman, Jagwash Bagdati, Martin Gouf ?. We are like the blind men describing an elephant. Why was the head of DBS bank sacked—I mean, why did he resign? Because he underestimated the exposure to the sub-prime crisis.
• Three questions I hope to answer:
  1. What is it and who created it?. the process that is leading to the creation on one world. Most of the good things in the world in the last century have come from the West.
  2. what threatens it?
     • The conventional wisdom is Al Qaida. Or the failed states, Somalia, etc. Or it's the NGOs, demonstrating against world talks. I'm going to Geneva tonight to give a speech, and I'm going to be naughty and tell the NGOs many of the problems in the world are their fault.
     • Protectionism is coming back. A trade round is about to collapse for the first time in 60 years. Fred Bergstein's bicycle theory. Uruguay round almost failed but 1993 APEC leaders meeting rescued it.
  3. Can Asia save it? Yes and no (but not maybe). I was in Pakistan when the exiled leader came back and then was re-exiled the same day. But what the world didn't notice was that two young Pakistani geeks set up a company, I think it's called Scribe, which was sold to Adobe for hundreds of millions of dollars the same day. But on the No side, many Asian countries don't want leadership. China has chosen not to take any kind of global leadership. This may be in order to avoid alarming/provoking America. Deng Xiao Ping gave advice before he died in the form of 28 characters. Take a low profile. After Doha collapsed everybody's minister except China was on TV. The other possible candidate is India. See Singh's thoughtful speech. India is not ready yet.
• This is a time when the need for global leadership has never been higher but the availability of leadership has never been lower. There is no natural leader.

Q&A:

• Q:. What about MNCs? A: They were driven out into the world by an enabling environment.
• At this point a classmate asked an interesting question about what the physical presence of a country's internet connection is (prompted by this) and that led to some research so I missed most of the Q&A, which seemed to cover the basic globalization terrain.

Time is really flying; I saw a posting for a seminar on gay rights in Asia, but didn't bother to put it in my calendar because it was so far in the future, mid-September. Oops. After Week 6, we had a break week and many students, including my roommate, went to Thailand or other resort destinations. Like many, I had bold plans to catch up on various things but ennui set in and I accomplished almost nothing. I did have some students over for dinner once (burritos), and saw visiting American friends. Also I went to the Night Safari; I normally avoid zoos out of general discomfort on behalf of the animals, but I needed the socialization. Now it's time to get my ass back in gear.

Each week in SMIG two people are assigned to prepare the takeaway points for the week's readings. The week before the break, I raised my hand. Not the smartest move, because I'd been so focused on my essay for the same class that I had done an extra-cursory job on the readings. Today I went to campus to meet my partner for this assignment (this is different from the G2, G3, and G5 partners); I was ready to beg forgiveness for still not really having done the readings and for bringing my dog (it was the first time taking her deep into campus and I was afraid security would hassle us; I emailed several administrative addresses in the last few weeks asking for guidelines on dogs on campus but heard nothing and googled nothing), but he breezed through an hour late, said he was dropping the class, made a shit-eating shrug, and breezed out. But if there's one thing my otherwise bleak break week did, it prepared me for this moment. I got most of the way through a gargantuan novel about crime lords and police in Mumbai, and picked up a lot of new words. So I know the right thing to say when this happens: maderchod.

On the bright side, Kona and I hung out in the outdoor (but shaded) cafe for over two hours and nobody gave us any trouble. She was perfectly behaved, didn't bark once, and seduced a number of students and one professor.

Meanwhile, nobody's seen our two Burmese classmates since before break, but they are both safe here in Singapore.

Today's good news: conservative San Diego mayor Jerry Sanders gives a speech explaining why he changed his mind and supported a city council action in support of gay marriage.

Guest lecturer: Dean Kishore Mahbubani on Globalization.

Disclosure: Because this was an in-class lecture, I contacted the dean's office to confirm whether or not this was on the record. They asked that I refrain from publishing several details, and I have complied. These are my notes during his lecture; the dean speaks very well and any poor wording or English is from my note-taking. "I" = dean unless parenthetical comment or otherwise noted.

• I'm going to emphasize one dimension: power. Four examples from UN Security Council, the most powerful international organ in the world; only organ with power to legitimize force. Decisions are binding on UN members. (Dean Mahbubani was twice president of UN security council)
• I assumed law, justice, etc would be key. But principles are second; considerations of raw power are first
• Brazil: reasonably powerful in international relations. In Jan 1999 or 2000 they were President of security Council. Celso Amorim was the ambassador - now foreign minister of Brazil. He found that Iraq issue was not going anywhere; sanctions causing suffering. He came up with the idea of three panels to move things forward, had public support of Security Council. Two weeks later he was transferred to Geneva in an obvious demotion. People think all the bullying started with Bush. But Clinton was the president at that time.
• Second story: Ireland. Richard Ryan would get instructions from Dublin. But he would speak right after French president. After France spoke, he said "Like France," and then proceeded to give his planned speech. The American in the room called the desk, said "Ireland said, 'like France'", the desk called Ireland. Ten minutes after his speech, Ireland called him to ask why he said "like France" and reprimand him for departing from his script.
• Third Story: International Criminal Court. The ICC has universal application even though the US has not signed it. US was afraid US soldiers could be subject to persecution and wanted immunity. US went to the Security Council with a resolution to immunize US soldiers on peacekeeping. Every ambassador in the room agreed this was completely wrong, on the basis of the UN charter. The most eloquent speech against this was by the British representative. All the speeches were against. Then came the voting. The UK voted to support the US resolution. The ambassador then gave an equally powerful speech on why it was right to support the resolution. (See this for more info). Mexican foreign minister refused to take the phone call from Mexico city ordering him to vote for the US and voted against; later he lost his job.
• Fourth Story: Rwanda. I always thought it happened because the UN Security Council was sleeping on the job. But it was not an act of omission, it was an act of commission. The delegates knew it was happening, from cables and such. You can google the report by stephen lewis about this.
• Nonetheless, given how much power the US has, it's amazing how infrequently the US abuses it. America is fundamentally a law-abiding society and leads the world towards law-abiding. Example: even though GATT and WTO don't have power to enforce compliance, I'm told that so far the US has complied with every WTO judgment, even the negative ones. (Joel note: well, on the steel thing, they put it in place knowing it was illegal and kept it place for about two years while the appeals were in progress, long enough to get the political payoff)
• US Navy example about a boat in high seas years ago suspected of carrying North Korean goods but cabled State department and were not allowed to intercept it
• Post-9/11, the rules have changed. People don't realize or know by how much. Nowadays a Navy ship wouldn't hesitate to stop a ship on the high seas.
• I was talking to Gunter Pleuger (who led the fight against the US Iraq initiative in the Security Council in 2003). He said the US "PSI" policy is just pure piracy. Now more and more countries join it, including now Germany. It will thus become a universal norm and redefine piracy. (Note that one of the questions in the PSI FAQ is, "Isn't the Proliferation Security Initiative (PSI) little better than state piracy?" and the answer, "not at all.")
• Q: do you think rule-based behavior is starting to change realist views? A: Broad trend was basically positive; it took one step backwards immediately after 9/11, and another when the US went to war in Iraq illegally. but the overall trend remains positive. Most countries want to join international law regimes because it benefits their interests. China in particular want to promote the rules. The number of "rogue" states is getting less and less. Example: many territorial disputes around Singapore now go through ICJ.
• Q: in terms of the US, it has that reservoir of power. But the ability to use raw power is circumscribed. Would you agree that the restraints on raw power are great these days? A: the restraints have been growing stronger and stronger. But the US can violate it any time if it wants to. You should all worry about a United States attack on Iran in the next few months, without sanction - I don't think China or Russia will sanction it. If that happens then I think all hell will break lose. It will be a huge disaster.
• Q: US and allies didn't get approval for Iraq, but they didn't for Kosovo either. Or Darfur. But nobody talks about Kosovo intervention being illegal. so it popularity important? A: it's important to draw a distinction between legal and legitimate. The Kosovo intervention was illegal but legitimate. Russia failed to pass a rule banning intervention, and that served to legitimate it. A Canadian diplomat told me the Canadian government analyzed and said intervention was illegal but legitimate. An action that most states support will be legitimate, but something only a few European countries support would not be.
• Q: Do you have examples of non-state actors taking real power? A: When I was on security council, I chose to brief big NGOs/corps, to see if they could be used as an informal lobby to influence the security council. In theory they are supposed to have grown in power, but their impact on the UN security council was virtually zero. UNSec is hard, real power, and no NGO could shift that. Q: what about corporations? A: I saw in the security council zero evidence that corporations are growing in international power. If they can avoid getting involved in political issues, they avoid it. My friend Tom Pickering told me about how the Chinese would come and lobby Boeing to speak up on their behalf, and Boeing said it wouldn't get involved. From time to time they get swept up; they wanted to join Kofi Annan's Global Compact because it would give them legitimacy. John Ruggie involved. But the compact is very controversial.
• Q: your examples are about power in security issues. How are NGOs activities affecting exercise of sovereign power in nation states? A: NGOs have in many ways seized control of power in these (environmental) issues, perhaps this is an exception. Popular sentiment, Al Gore's movie, have moved the center. A sense of global alarm. Friend building a hotel in Maldives that is sinking below the rising water. In that way NGOs are an exception
• Q: I read your book "Beyond the age of innocence" about US power benefiting and harming the world. (missed the rest of the question) A: I learned how divided the world is on American power. FT review was half-page, "don't bother to read it, it's another anti-American book." Two weeks later in Turkey I asked my publisher when is it coming out, she said, "we have a problem, you know the mood in Turkey is so anti-American, your book is so pro-American we cannot publish it." ... I say globalization is good because it's reduced by so much the number of impoverished people in Asia. ... this is the first generation in American history that's not experiencing progress. Poor countries support globalization but rich countries are afraid.
• Q: What do you think will happen about Security Council reform? A: UN has set up "open-ended working group" on security council reform. Some say it should be renamed "never-ending working group". Two theses: one is that it's clear it has to change. Permanent members, by the way, essentially run the council. A Chilean member told me, in reality, there are five members and ten observers. That's absolutely true. But these five represent the great powers of the past, the victors of WWII. But it's not clear who will take their place. But 2045 I'm certain the G5 will have changed. The change will happen but there will be tremendous resistance. Britain and France will never give it up willingly. Japan want to join but China's blocking, Argentina's blocking Brazil, Nigeria's blocking South Africa, Pakistan's blocking India. That's why there's gridlock. But the longer this goes on, the less legitimate the Security Council will have.
• Q: During the Qatar ambassador's talk there was mention of a growing anti-Americanism. How would you explain this? A: the subject is a huge, major issue. Many Americans would like to believe it's a passing shower because of Bush. But I don't buy that theory. Bin Laden was planning and acting in the 1990s. It has to do with the global perception on how American power is used. Cotton subsidies protect thousands of American farmers but hurt millions of Africans. Rwanda genocide was a decision made in Washington. The world is shrinking every day but the impact of American power is staying the same, so it gets bigger every day. As Americans remain ignorant of the negative impact anti-Americanism will get worse.

Class discussion

• Prof was hanging his head: thesis of the class is increasing power of non-state actors and transition towards global governance, but Dean's lecture was about pure power from states. Context of the dean's talk: he worked in the Security Council, which is state-based. If non-state actors have influence (which assumption the class is predicated on), it's not direct in the security council.
• If there is a fusion of governance, it will conflict with sovereignty and territoriality. Fusion is thus not possible for globalization. Definitions, phases, different spheres. Diffusion of popular culture. soft power. That is now a two-way process.
• Convergence, or lack thereof. Anecdotes. Education system different everywhere. But Sciences Po now offers MPA in English in Paris. Italy's education is not globalized. Will they join international standards within 10-12 years? Business schools must have one of two standards. EQUIS.
• Convergence of language. Philippines example: one Senator issued a warning last week about languages going extinct
• When you come together and meet, you realize there are a lot of cultural differences. We cannot rule out the fact that peoples' mindsets are still very different. National traditions, beliefs. Anecdote from business conference, Chinese delegate: "it's okay to sacrifice some human rights for progress." Indians flabbergasted.
• Convergence in some senses, but disparity between haves and have-nots seems to widen. But poverty is reducing tremendously almost everywhere, even if it's grossly inequal. But relative deprivation is important. In the US in the 1950s, debate about whether black and white TV counted as deprivation. Impact of images of wealth from other countries, e.g., TV. People with televisions and mobile phones living on piles of garbage in the slums.
• Lack of diversity in clothing; t-shirt and jeans. WTO rules to require foreign content e.g. on television. Arguably democracy was/is popular because of images from a rich democracy, US. (So if USSR had somehow become visibly wealthy, everybody would want to be communist?)
• Interest of states is diversified but interests of MNCs is focused.
• To what extent does it matter that you can point to an activity and figure out which country it happened in? Is cyber really changing things? (hm. still a sales tax exemption for internet commerce in the US.)
• Perhaps globalization gives states more power because they have far more instrumentalities.
• What about MNCs. Why aren't we mentioning them here? Aren't they the baddies of the whole thing? Example: P&G pushing to create diaper markets where custom is not to use diapers.
• Growth in MNCs (more than 2 borders) ~500 in 1945 to over 8000 now. Blurred because some companies are extensions of states (Airbus, Standard and Chartered). pension fund investors.
• Flow of FDI compared to flow of stock markets. FDI stays between US, Britain, France, Germany, a bit in Japan. Mostly excludes the rest of the world: only about 17% goes to emerging economies, with China talking half. No secondary markets, bond markets, in Asia. Only Singapore and Hong Kong have bond markets.
• Until a few weeks ago, Japan was putting $30 billion/week into US markets; China $50 billion/week.
• student feedback on ole: government should be studied as an activity, not a process. not enough tools, tools are still embedded in old thinking. global governance is not necessary zero-sum. States can use NGOs to influence actions and legitimize state actions. E.g. states using IMF as scapegoat for unpopular policies.

As a grad student on a grad student stipend, I've quickly learned to go to all functions offering free food. That LKYSPP is very good at offering vegetarian options is icing on the cake. This was a fairly small event with six tables of about ten, including four vegetarian settings (but only three vegetarians). Said hi to the Dean, who didn't seem to recognize me as the blogger (see forthcoming story about his lecture in class last week). Here are my notes from the dinner; if anything is incoherent that's my fault, not the speakers:

Dr Choong May Ling

2 threats. terrorists with no previous records. In singapore, JI (Jeremiah Islamiyah). Self-radicalized. Protection is highly vigilant community. Could tear up racial and social harmony.

Second threat is infectious diseases. h5n1. Spanish flu 1918. ministry of home affairs coordinates all security reactions. She used phrase "homeland security". Public-private partnerships part of reaction.

Ltc Dominic Ow from Ministry of Defense. ASEAN only started security coordination last year. Globalized security. Terrorism, disease, natural disaster.

Joseph Liaw. Professor. Asymmetric threats. may be home-grown. Terrorism captures dynamics of these threats. Looking for faint signals of new threats. Need to prioritize.

Alami Musa. Active in Muslim community. Three pronged defense. Hardening targets. Anticipating. Response. Fight vs terrorist war on us requires not just government but people. Building resilience in Muslim community. Not all muslims are terrorists but nearly all terrorists are Muslims. Disappointed by UK muslim leader response: they blamed everybody. Here, religious rehabilitation group formed after 31 JI terrorists were detained in 2002. Identified six steps in radicalization. Created deradicalization program. Shared the errors of JI thought process and abuse of islam with community. Inoculation so they will not be perverted.

Michael Richardson, former journalist. Long list of maritime terrorism successful and not. Clearly used by terrorists. Almost all sunni terrorists are Al Queda, but some terrorists are Shia Hezbollah. Not all states treat Hezbollah as terrorists. Very strong Singapore response. Both law enf. and military. Container inspection.

Q. ISA (Internal Security Act). Detention w/o trial. Used on muslims. Possible that Singapore won battle, lost war? A. Easy question. Served us very well vs communists, social harmony disruptors. Public trial too hard, but their rights still very well protected by a panel. Community outreach before news went public helped prevent negative reaction.

Q. ASEAN is underdeveloped institution? A. Some progress.

Q. about realism and liberalism. A. Are we still on that debate? Some realist theorists acknowledge problems with excluding non-state actors.

Q. Why do people get radicalized? A. They go to religion for answers for crises in their lives (my poor paraphrase here, sorry). "Born-again" Muslims becoming more common in the West

Q. Region prone to money laundering. Any law? A. Long answer amounting to yes. Also, defenses strong against cyber-attack.

Q. Approve of positive Islam message. Can that be mainstreamed to rest of South East Asia? A. Radicals use Muslim community as source of support and recruits. Singaporean Muslim Identity. There are political motivations for extreme religious factions. Mainstream Islam in Malaysia is progressive and moderate. Islam has never been monolithic. So, no.

Q. Ideology virus is dynamic. How to detect new strain? A. Yes it is. Don't know how to detect. A.. Going back to money-laundering and self-radicalization. Martyrdom is spreading. Peroxide bombs in London. Low budget. money laundering laws ineffective.

Q. Terrorism is rooted in Israeli-Palestinian conflict and Iraqi war. Any efforts to resolve that? A. Ending the Israeli-Arab conflict [notice wording change] would be one less reason but wouldn't make problem disappear. 9/11 was blow to jihadists because response took Afghanistan from them. But Iraq war gave second life to jihadist movement.

Q. How to stay vigilant? What cost? A. Can't do fortress singapore. threats and risks. American club very popular to stand and photo, gives us no end of trouble. taxi drivers report odd conversations, are getting training to identify race or nationality of suspect passengers.

Questions I didn't get the chance to ask:

who advocates for civil rights in Singapore in security planning?

Is everyone on the panel happy to continue cheer-leading as human rights and civil liberties are set aside

How many secret prisoners are there in Singapore? Does Singapore participate in extraordinary rendition, as an origination, transit point, or destination for prisoners? Does Singapore plan to use extraordinary rendition if necessary?

How many of the 31 JI prisoners are re-habbed or released? I actually did get to ask Alami Musa this after the dinner; he said three have been rehabilitated and released. The rest are still detained. No, they can't get a trial because how could you do a public trial? You might not be able to get all of the evidence (for example, the Malaysian who sold them the fertilizer for the bombs) and perhaps they might not be convicted. But their civil rights are not a concern as a panel oversees their treatment and he heads a group of 36 (I think) clerics who visit them as part of rehabilitation. The clerics had concerns at first but after meeting the prisoners the clerics agree they are dangerous. (Very much my paraphrase from memory; I could be misquoting some of this)

So there you have it. Singapore has its own Guantanamo somewhere, has indefinite detention of suspects without trial, and nobody (in the dinner group) seems to have a problem with this. It's not a big surprise but it is a disappointment. Permanent detention without trial is a violation of human rights. If you can't get enough evidence to convict somebody, then they are not legally guilty. If you think they are an extreme threat, monitor them once they are released. Surely there's probable cause to keep a list of everybody they meet with or talk to.

Very informative panel, good vegetarian dinner. Very glad I went.

Last required reading for week 5:

Martha Finnemore (2004), "International Organizations as Teachers of Norms: The United Nations Education, Scientific, and Cultural Organization and Science Policy," in Timothy J. Sinclair (ed.), Global Governance: Critical Perspectives in Political Science. London & New York: Routledge, pp.302-335.

• p 565: "consumers of science (e.g. technology-intensive businesses)" Ouch. Any human being who is curious about the world they live in is potentially a consumer of science. The pictures and descriptions of rovers on Mars and my knowledge the science they are performing is part of my intellectual wealth.
• pp 565-6: Examines the history of sciency policy bureaucracies in the last fifty years. Finds no support for the hypothesis that such bureaucracies are demand-driven. Alternate explanation: UNESCO promoted a new norm to member states. This supports constructivist theories; demonstrates international agencies as principals rather than agents (a distinction that isn't immediately clear to me), and "raises questions about the nature and role of epistemic communities." I think she means that science bureaucrats may have promoted science bureaucracies because they are bureaucrats instead of because they are scientists. Very nice summary; now I can skim the next 31 pages extra-lightly.
• p 571: "The test reported here compiled and analyzed quantitative indicators of domestic conditions that might prompt creation of a science policy bureaucracy in a sample of forty-four countries..."
• I like this article. The writing is clear and the writer has specific information to convey.
• p rest of the article: pretty much follows the summary. Detailed description of how UNESCO got started in the science business and then went around to countries to help them or get them to set up national science councils whose key attributes were access to power and strict "policy only, no research" boundaries.

Class notes

• Bretton Woods System and American Hegemony
• pratical reality of fiat money comes from the Bretton Woods institution
• Yes, they literally handed gold back and forth to conduct international trade. Trade wars via competitive devaluations and tariffs. (Apparently competitive devaluation hasn't stopped yet) (n.b. some argue that oil replaced gold as the backing for American dollars).
• You may not be too surprised to see which US presidential candidate has been giving speeches on this topic.

  Our whole economic system depends on continuing the current monetary arrangement, which means recycling the dollar is crucial. Currently, we borrow over $700 billion every year from our gracious benefactors, who work hard and take our paper for their goods. Then we borrow all the money we need to secure the empire (DOD budget $450 billion) plus more. The military might we enjoy becomes the "backing" of our currency. There are no other countries that can challenge our military superiority, and therefore they have little choice but to accept the dollars we declare are today’s "gold." This is why countries that challenge the system-- like Iraq, Iran and Venezuela-- become targets of our plans for regime change.
  Ironically, dollar superiority depends on our strong military, and our strong military depends on the dollar. As long as foreign recipients take our dollars for real goods and are willing to finance our extravagant consumption and militarism, the status quo will continue regardless of how huge our foreign debt and current account deficit become.
  [...]
  The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or Euros. The sooner the better.

• Back to the lecture. US post-war reaction to pre-WWII institutons leads to Bretton Woods regime. This week's reading from Ruggie covers this in some detail, albeit in the context of his theory of "embedded liberalism".
• Here's a firefox plugin to change all dollar prices to barrels of oil equivalent at current prices. Warning: Can't guarantee its safety; I inspected the source code for grossly bad things but I wouldn't know how to spot any dirty tricks; nor did I do anything to confirm that the compiled XPI matches the source code I looked at.
• Basis of Bretton Woods: everybody links currency to dollar, which can be exchanged for gold. IMF to maintain this system; World Bank to rebuild Europe; ITO (GATT, WTO) to reduce tariffs. Tariffs have dropped from 30%+ globally to 4-6%.
• Many countries have abandoned any gold holdings in their central banks. Some haven't. KPMG will audit Fort Knox this year.
• Classmate objection: The IMF has caused more damage than good. Responses: it's invited; it doesn't invade. Local presidents often use the IMF as an excuse to push policy.
• The World Bank is criticized by everybody so they must be doing something right. For counterfactual example, see malaria.
• Class discussion
  • Do you agree that an institution is the norm or rule itself?
  • Ruggie. Schacht is just a footnote. "All Germans are footnotes. I say that as an Englishman."
  • transaction flow patterns after WWII. Intra-firm trade is a bigger portion of trade than world-trade. "narrowing of economic basis". re-reading the pages of Ruggie, I see a few different points mingled and I'm not sure I follow. I think he's saying that, in many cases, countries bulk up their local economies and then trade, and are a bunch of clones of each other, rather than each focussing on their competitive advantage (Ricardo's theory).
  • Finnemore. We all like her more. Statement that UNESCO is successful in part because it offers proven benefits. Maybe, but I don't think Finnemore actually makes that point in the article.
  • After a slow start, good student participation in the class discussion part of today's class

Today's Lunch Seminar: Geoffrey Yu, Intellectual Property: Friend or Foe of Development. 25 years at WIPO. (See 1, 2, 3, 4 for a taste of WIPO.) Liveblogging.

Today's opening joke/story. Woodcutter falls in the water and loses his ax. (Read it here) His version is Madonna, Jennifer Lopez, Shakira).

From the joke, we can see that the crux of the matter is, can a poor person afford intellectual property.

"Most of you would think, piracy, downloading, peer to peer. ... This is a tiny and not terribly important part of IP. Has to do with instant gratification by young people of things which entertain them and of which they obtain pleasure." But it's at the level of poor countries and knowledge that one should be thinking for today's talk.

IP is two branches, copyright and industrial property (patents, trademarks, designs, geographical indications, local knowledge, folklore). He didn't mention trade secrets. More details. These are governed by norms, in international treaties, and governments follow these treaties. (Reality check: vested interests lobby to increase the international treaty powers as an excuse to increase local treaties). Mentions TRIPS.

Originally the concept of protecting IP was directed at the individual men or women that created, composed lyrics, .... Today, one tends to forget about these individuals and one talks about business. When you hear about new drugs, you don't hear about the men and women, you hear about Pfizer, Merck, etc, because they own the rights. One of the debates today is how do we relate IP back to the men and women and not to big business, because big business has created an impression as something which is monopolizing and exploiting (is that a real initiative or is that a PR exercise?).

How to adjust the social contract? Never to lose sight that there is an element of public good. (Telling that you might even worry about lose sight of your entire legitimate purpose; I guess that's the risk when you are completely captured by your industry.)

Reaction to IP by those who oppose monopolies and equate IP with monopoly

What's an example of a social cost? Prices can be set out of the reach of the people who need things. Lots of information is available electronically but locked up through protection measures. But the information locked up is not all original; so some of what was in the public domain is locked up.

Poor countries are calling out for a bigger public domain and to get everything for free without paying at all. But they recognize they cannot get this without balance; the foreign supply of IP will dry up.

You hear a lot of about music piracy in China, but not about patents. If you watch a movie, that's it. You are sated, and watching the movie didn't add to the total wealth and productivity of the country. (Only if your satisfaction doesn't count as a form of wealth. And if human satisfaction isn't a kind of wealth, what's the point of wealth?) He then argues that developing countries will put more effort into enforcing (foreign?) patents to grow the economy than into cracking down on movie piracy. Example: China is inviting foreigners to come and do R&D with the assurance that their rights will be protected. Films and books very good for keeping the young people out of trouble and at home watching their screens.

It has been estimated by some studies that some 3 trillion dollars of the US economy can be traced back to IP and the protection of that IP. So you know why the Americans are so upset. They are the biggest creator and consumer of IP. (Here's an even bigger claim of 5 trillion. Setting aside the validity of the number (which anyway is a Wall Street Journal editorial), note the implication that removing IP protection will reduce this number to zero. Note further this rebuttal, claiming that fair uses are worth more than copyrighted use.

Back to the woodcutter but I missed the point of how the woodcutter relates.

When I came back to Singapore (from WIPO?) it took 12 or 13 years to get support for the idea that IP should be protected. So you can imagine Latin American, etc. They don't see themselves as IP producers. But now they begin to see they are potential producers. Drug research in India and China. Poorer countries realize they have traditions of dance and music etc which in fact the West has been copying free of charge

What on Earth were the reasons for setting protection of 110 years? Can that be justified under any circumstances? Lawyers are the most conservative and are loathe to change things, even though they can realize the intellectual push against this. (Very disingenuous: these extremely long terms are themselves quite new in the last few decades (look up the Sonny Bono act). And surely lawyers played roles in that.)

Q: What is your position on granting patents for traditional knowledge? What should the process be? A: patents must be for novelty. Example of inventing the bendy straw.

Q: I'm not sure about the balance. What is the role of WIPO (given TRIPS, WTO, etc)? How does it fit in? What positions does it take? A: WIPO administers some 25 international treaties. The search for a new balance takes place in WIPO. But governments do go forum-shopping.

Q: something about biomedical protection in Taiwan and then in Singapore, and also about medicine in poor countries, Tamiflu. A: NUS IP training is mostly done in the law school. Hire a good lawyer. On Tamiflu, compulsory licenses. This is allowed but the Americans don't like it.

Question I want to ask: To what extent do you agree with Lawrence Lessig's concerns about the current IP regime? (I would summarize his concerns as, the IP regulatory bodies have been wholly captured by the IP producers, and the balance between the public domain and private profit is shifted very far towards the private interests; this harms our society greatly.)

Q (comment): Patents can be reviewed and taken away. A: you're right. In the US you can go to the courts. In Singapore they have post-grant administrative challenges. (A bill to that effect is coming up in the US Senate.

Q: what are governments doing to help the small producers of IP? A: Give them knowledge and awareness. Example: the Thaksin—can I mention Thaksin here?—government developed a rural program to offer them (rural producers, handicrafts) organization and branding services, organizing fairs. China has hundreds of millions of rural farmers, some cabbages are particularly nice, leafy, delicious. Vice Minister of Trademark told me that he went out to the provices to spread the gospel of trademarks. They invest some money to wrap the product and give it a label.

I got to ask my question. A: personally? Well, I like the idea of having to pay a fee to renew a copyright, like you have to do with patents. But very few people have picked it up. Q: why? A: inertia. I'm in favor of more testing, discussion. Academics can do it. Nothing in the existing treaties would prevent you from the renewal program.

Q: I'm looking from the company point of view. Is there a divergence in how IP will benefit me, more in ? Didn't quite catch his dichotomy. A: The recording industry is famous for its sclerosis, unable to adapt to the changed imposed by technology. Example: the album, where you have to pay for the whole album to get one good song. They are trying to do new things now (like the ringle). Trade secrets. Companies sometimes have a mix of patents and trade secrets. For instance in the music indutry, you have the producers, they sue teenagers and so forth. recording companies slug it out with the technology companies, who want to sell hardware.

His prepared remarks were unimpressive, and included some deep conceptual issues, such as the repeated reference to media (music, books, movies) as something by and for "young"; which is tantamount to saying that culture isn't serious. But his responses to questions were much more enlightened/enlightening. Speaking to him briefly after the talk, he complained about the pressure American companies put on WIPO.

Class notes for Macro week 5

• Washington consensus (see my last week)
• Washington consensus vs East Asian Miracle, triggered by 1993 World Bank study. CW is that Asian miracle is attributable to a mix of free market and government intervention, which contradicts the Washington Consensus (here I use the term in the standard usage of ideologically pure free market, not in the original intent) prescriptions. I wonder which version of the Washington Consensus Friedman means with his Golden Straitjacket. I wonder if he knows.
• Class opinion: it all depends. There is no one pure formula to be followed. "What kind of macroeconomic theory do you expect illiterates with guns who took over the country to follow?" asks our Nigerian classmate. To which a European IM friend says, "'illiterates with guns' - so they have their Republicans too!"
• Time for presentations. Pariyaporn and I went first and did our 5 minutes on gross domestic savings and gross capital formation in Vietnam in 1986-2005. One nice thing about LKYSPP is that we were sitting in the lounge preparing and thought, who can we ask to help explain stuff, and then we realized we could go ask the former Finance Minister of Thailand, who was a visiting professor for the week and whose office was about 50 meters away. We ultimately got half an hour of his time, and he had some very useful things to say about our data, including his personal experience as the then-president of the first Thai bank to open an office in Vietnam. Short form of our presentation: doi moi policy starts opening Vietnam's economy in mid-1980s, collapse of USSR eviscerates Vietnamese investment rate but gov't compensates with growth in domestic savings after USSR collapses, investment rate mostly insulated from Asian crisis but foreign money dries up for years; overall reasonably steady growth in both investment and savings over the whole period.
• Singapore. Highest savings rate in the world, due in part to very large mandatory retirement savings in Central Provident Fund (think Social Security on growth hormones). Huge investment, up to almost half of GDP, through 1985, then declining investment, as Singapore is completely industrialized, but savings keeps growing. Now you know where Temasek and GIC get all the money to play with.
• Ghana. "Mine is a sad story of investment and savings. I indulge you not to weep for my country. ... is highly affected by a series of military adventures." savings and investment very closely matched (no foreign investment) and plummeting through 1983 down to 3%. Economic recovery program in 1983, then investment goes on a serious if jagged trip upwards through the present, but savings doesn't keep up (hence foreign investment made up the gap).
• Pakistan. fairly stable investment, if low for an under-developed country at ~18%. Why? Fiscal year is July through June. savings was much lower until very recently.

Micro

• At equilibrium in a perfect market, firms make normal profits = covering cost of capital = matching but not exceeding opportunity costs = no economic profit.
• Time for the most important lecture in this class. Economic efficiency. What is it and why do markets seek it.
• • All users receive the same marginal benefit
  • All suppliers have the same marginal cost
  • Marginal cost = marginal benefit
• Hmm. Wonder exactly which economic efficiency this one is.
• This is not the same as technical efficiency. Prof's research topic: technical efficiency of government. Not an exciting topic. I guesstimate waste from government technical inefficiency at 3-4% of GDP worldwide.
• There are very few other systems that can even intellectually provide economic efficiency. But e.e. is not necessarily a happy condition; it's just efficient use of resources.
• What's the relationship between buyer/seller surplus and economic wealth created? I ask. Two separate issues, says prof. I'm not sure, because he's talking about wealth accumulation and I don't think that's what I meant by wealth creation. I'll follow up later.
• Earthquake in Indonesia, and a tsunami warning.
• Efficacy of markets. Comparing North and South Korea, East and West Germany, etc. Kerala, which has a communist government and first-world health and education statistics, but is materially poor "even by India's standards".
• Transfer pricing. Outsourcing. Public-private competition. Put them together and you get "best-sourcing", Singapore's policy.
• Again the paradox of wholesale price cuts not being passed on. Related: wholesale vs retail in a monopoly, oil and gasoline prices,
• Coupons as a means of price discrimination
• Taxes distort the perfect market and cause deadweight losses
• You are all (unless you go to the NGO sector) going to be big-shots in government. You have power to cause a lot of damage. In my class (microeconomics) I emphasize this.
• Price ceilings and price floors

Very nice to see this instead of the usual thanking of God for miracles:

Kevin Everett voluntarily moved his arms and legs on Tuesday when partially awakened, prompting a neurosurgeon to say the Buffalo Bills' tight end would walk again -- contrary to the grim prognosis given a day before.
[...]
"It's totally spectacular, totally unexpected," Green told The Associated Press by telephone from Miami.
[...]
"I don't know if I would call it a miracle. I would call it a spectacular example of what people can do," Green said. "To me, it's like putting the first man on the moon or splitting the atom. We've shown that if the right treatment is given to people who have a catastrophic injury that they could walk away from it."
Green said the key was the quick action taken by Cappuccino to run an ice-cold saline solution through Everett's system that put the player in a hypothermic state. Doctors at the Miami Project have demonstrated in their laboratories that such action significantly decreases the damage to the spinal cord due to swelling and movement.
"We've been doing a protocol on humans and having similar experiences for many months now," Green said. "But this is the first time I'm aware of that the doctor was with the patient when he was injured and the hypothermia was started within minutes of the injury. We know the earlier it's started, the better."

Lots of good guest speakers this week. Today: The Bukit Timah Dialogues... on Leadership by Mr Janadas Devan, Senior Writer, The Straits Times (Singapore)

The Sherlock Holmes tent joke.

Googling Devan reveals ... NRYB argument, column about how gays may not be evil for society, Pro-Iraq war column. (Straits Times doesn't publish free on the web so you have to infer what the articles said from these publicly readable forums.)

High-paying white collar jobs moving overshores, which explains the US jobless recovery.

He's still talking about globalization and the 16th century spice trade. Let's use the NUS E-library to read some of his columns. Devan wrote 20 July 2007, "the consequences of a defeat in Iraq are likely to be far worse than in Vietnam. ... The dominoes in the Middle East may not totter if the US were to withdraw precipitously from Iraq. Instead, they may fall ferociously on each other as they become embroiled in an Iraqi civil war, with Iran supporting its Shi'ite Iraqi compatriots and Saudi Arabia and Egypt their Sunni ones." He uses the phrase "bug out" in two different columns. About gays he wrote

What will those who hold that homosexuality is against the laws of God say when it is definitively established that homosexuality has a genetic basis? That God deliberately made a mistake with the DNA of gays - and wishes us to persecute them for his mistake?
And what will they say when they discover homophobia renders Singapore a less attractive place to the talented and creative, both local and foreign? There is a reason why some of the most creative cities in the world - San Francisco, Boston and London - are also among the most accepting of gays.
Clever people cannot abide intolerance.

(Joel's thoughts in response: Defending homosexuality because it may have a biological basis or for economic development reasons are both substandard arguments. Homosexuality should be defended as a human right.)

How New Amsterdam became New York in exchange for two islands in the Spice Islands.

Lou Dobbs and others say the US must protect itself from globalization. Devan quotes Friedman, Binder, Robert Reich opposing simple anti-globalization. Even Brazil and China lost millions of manufacturing jobs, due to productivity increases. More points on changing types of jobs: Reich's "symbolic analyst" jobs. (This corresponds to an article I started reading this morning: The Social Life of Information . Computerization has made many workers lives worse. Walmart "combin[es] an intensive use of information technology, a rapid growth of employee productivity, and a harsh, often punitive work regime that keeps even the most productive workers off balance and their wages at poverty levels.")

Corporate profits have increases in G10 while wages haven't. "Capital has increased at the expense of labor." More about increasing income inequality.

Keynes and Schumpeter. This talk seems like a "greatest hits" tour of globalization. Keynes' is "the dying voice of the bourgeoisie calling out in the wilderness for prophets it does not dare fight for and shifts its ego to the real problems it does not face."

Stability and routine. "Singapore has perfected this. Lee is an incredible routinizer. Routine also enables globalization."

I think he just came to a point but my attention had momentarily wandered. Something about value of novelties vs routines. I'm not sure what this quote means: "There is no tent. Somebody stole the tent. who? We, of course. We lost the tent the moment we industrialized."

Q: about government . A: the government has never told me not to take a line (e.g. a position) because the line's wrong, but they do criticize after publishing. "I've never been prevented ... maybe this is because I write foreign matters mostly."

Q: missed it. A: income inequality in Singapore. Unequal education. In the US I feel rich, because I don't know rich people, but in Singapore I know many rich people and I feel poor. In the US construction is a high-skill job; they come with all these tools. In Singapore, you know how they build walls? They tie up string. In Singapore we have cheap labor. Construction is the least efficient industry. (This seems to be veering into Friedman/Brooks territory of (bad) anecdotes = data). Women in Singapore can't work without maids to take care of things. In the US and Australia women can work without maids. (Okay, taking a step of my own into Brooks territory: some male classmates from other countries who have brought their families seem to be in the same position of needing maids for the family to function properly and the women to work. Maid, in this usage, is closer to the US "nanny".

Q: what's your life like in Austin? A: I'm there because my wife works in the university. I travel 1/3. Q: I was asking, what is your life philosophy as a writer? A: um.... good question. If I could do my life again, I would be an astronomer, because you can't possibly do any harm looking into the sky, or a doctor.

More discussion about wealth inequality and its effects. Possible explanation for subprime crisis: people trying to keep up with the Joneses.

(Joel: I think that I'm going into these lectures with the mindset that I get from reading several hundred pages of dense academic material every week. Impatient and critical.)

A question about the press. "It took a long time for the Singapore government to establish a Singapore media as such. ... media plays a role in many ways ... establishes a certain consensus of what are the main issues. ... Chinese press was dominant in the 1960s, main issues to them were Chinese language, Chinese culture, not necessarily development."

Singapore is a hard country to explain. If I were to tell you there is a great deal of debate, you wouldn't believe me. But there is one place, the civil service.

Adams Chapter 7

• Your business should return more profit than you would otherwise make investing your money in something else. Expressed on p 172 as "PDV > 0 Invest, PDV < 0 Don't Invest." Ignores risk, without which the whole exercise is fairly meaningless.
• p 174. The hurdle rate is incorrectly marked in figure 7.7; the text says "the hurdle rate has been drawn in at 10%" but it's actually drawn at 8%. The text for the different projects doesn't match the diagram. The diagonal line is simultaneously superfluous, confusing, and misleading: superfluous because it doesn't contain any real information, confusing because it intersects the upper right corner of each bar even though there is no reason for the bars to have any width, and misleading because it suggests a smooth, linear function relating a numerical quantity (IRR) on the Y axis to a non-numerical quantity (different projects) on the X axis.
• p 177. The labels on the charts are switched compared to the text. The one on the right should be "During boom period" and the left, "During recession".

Reading Notes for SMIG week 5

John Duffield (2007), "What are International Institutions?", International Studies Quarterly, 9(1), Spring, pp.1-23

• What's wrong with existing definitions? the term is used to refer to different things; scholarly works don't recognize the various forms ... (this paragraph isn't very clear, but seems to recapitulate the first complaint), and everybody talks past each other. Rationalist vs constructivist camps. "Institutionalist"—is anybody who talks about institutions assigned to the institutionalist camp? Is it not possible to write in a scholarly field about a phenomenon X without being assigned to camp "Xist"? This seems like a fancier version of, if you like X so much, why don't you marry it?
• Finally, the definition, and it's not a good one: "international institutions are defined here as relatively stable sets of related constitutive, regulative, and procedural norms and rules that pertain to the international system, the actors in the system (including states as well as nonstate entities), and their activities." That seems to define institutions as mental constructs ("norms", "rules") shared between people. But this is contrary to the normal definition of an institution, which includes people. For example, I would consider a school to be an institution. The mental constructs are a necessary part of it: if all the teachers and students and administators and staff quit each year and were replaced, then it wouldn't be much of an institution. Let's see if Duffield moves beyond this narrow definition.
• Formal Organizations. "Traditionally, scholars and others have frequently used the term 'international institution' to refer to formal international organizations, for example ... the International Monetary Fund ... such a restricted construction of the concept has become ... inappropriate." Are you saying that they aren't institutions or that they aren't the only kind of institutions?
• Practices. "... the assertion that war—'a state of open, armed, often prolonged conflict carried on between nations, states, or parties,' by one authoritative definition ... is a social institution"
• Rules. rationalist conception. "In rationalist analysis, agents are assumed to act rationally to maximize their utilities, subject to external constraints." "It leaves unclear the status of international organizations—some definitions include them (for example, Keohane 1989:3-4) whereas others do not (for example, Simmons and Martin 2002:194)—and international law."
• Norms. constructivist.
• "let us use the word 'norms,' as used by constructivists, to refer to the intersubjective elements and the word 'rules,' as used by rationalists, to refer to the formal elements. Admittedly, this linguistic choice is not unproblematic, and some readers may object to it." Yes, the whole article is like this. "to an important extent, institutions may exist in the minds of people and need not be written down anywhere. As such, they may be characterized as 'shared mental models'" yes. Second appearance of the word deontic, time to look it up. OED: Of or relating to duty, obligation, etc
• Apparently he's going to stick with his definition, but somehow read it such that the IMF, NATO, etc, still count as institutions.
• "How do we know whether such institutions actually exist? More specifically, how can we assess how widely shared a particular norm is or how strongly it is held? No scholarly consensus exists on the measurement of norms. Nevertheless, nonbehavioral evidence for the existence of norms can be culled from a number of sources, including surveys, experiments, interviews, and participant observation ... And in the study of international norms, in which it is often difficult to interact directly with the actors involved, one can and must examine what people say and write, using such methods as content, discourse, and historical analysis"
• "Intentionally omitted from this definition is any conception of institutions as practices or patterns of behavior. As noted above, some scholars have defined institutions in terms of practices, but this approach has found little favor within the field of international relations. Indeed, the need to distinguish institutional norms and rules from behavior is a leading area of agreement among rationalists and constructivists."
• "the functions that different institutional elements perform ... can be divided into three broad categories: the constitutive, the regulative, and the procedural."
• How Duffield's new definition is going to make everything better. Examples.
• There are plenty of interesting tidbits as he talks about various research papers, but he's just so brutally un-happy-making to read.

•     166 institutions
      159 international
       75 norms
       68 rules
       63 may
       55 definition
       45 example
       44 one
       42 they
       40 which
       40 institutional

John Gerard Ruggie (1982), "International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order," International Organization, 36(2), pp.379-415.

• p386. Are students of international regimes actually figuring out or finding anything? He thinks yes.
• Political authority is power plus legitimate social purpose. Realism ignores social purpose, and so cannot predict "contect", only "form".
• pp 385-386. According to Polyani, economics used to be wholly embedded in the social order. Separation of economics from social order is new in the last century or so. Some notes on the initial steps of free trade in various countries. All European. Well, this is a 1982 article.
• p 387. Social reaction against market rationality, starting in the late 19th century, dooms orthodox international liberalism. Balancing domestic concerns with globalization.
• p 388. Another mention (first was in previous article) of Schacht. Let's look this guy up. German financial expert and Minister 1935-37. Not a Nazi. Invented a legal fiction to help Germany re-arm without exceeding treaty limits on spending. Wikipedia has lots on his Naziness but not so much on his economic theories.
• p 389-90. Gold standard and international economics in the 20th century. It does seem like a bit of voodoo. Economics is made up of billions of individual transactions, and to come along and tally up the accounts for one nation-state vs another and see that some gold ought to be moved from here to there to balance things out strikes me as wishful thinking.
• p 392. Post-WWII liberalism is different. It's "embedded liberalism", which is "a form of multilateralism that is compatible with the requirements of domestic stability" (p399).
• pp 394-7. Establishment of Bretton Woods institutions. "Extraordinary power and perseverance of the United States" was necessary.
• p 403. "there has been no progress in liberalizing agricultural trade."
• p 404. "In sum, international economic regimes do not determine international economic transactions." For that, we have to look deeper.
• As he keeps detailing post-WWII global fiscal history, I am losing track of the points he's trying to make.

Liveblogging today's lunchtime seminar, Energy Policies and Technologies for a New Millennium: Perspectives on Asian Global Competitiveness. by Dr Robert K. Dixon, Head, Energy Technology Policy Division, International Energy Agency (IEA), Paris, France.

Long-time policy guy in the White House since Reagan, currently at the IEA.

Slides: the oil is in the middle east (and Canada and Venezuela and Russia), not in Asia. 25% of world oil demand is the US. Africa and India are half or less than half electrified.

Chart showing fossil energy as far and away the primary source of energy in the past and future. Shows nuclear power dropping substantially in projected future.

"If you believe the science of global climate change, which I do ..."

Pollution from fossil fuels, ... technology. General-purpose slides relating to energy and fuel, no details or specifics yet.

Nuclear: "As Greenpeace says, it's the only zero-emissions energy technology". That's an odd thing to say: solar, wind, and water are zero-emission, and Greenpeace is still completely opposed to any use of nuclear energy. And his own slide earlier showed nuclear almost disappearing in the next 20 years.

Do-nothing projection has 137% increase in CO2 emissions from 2003 to 2050. Scenarios with more optimism about technology development show increases of only 6 to 27%. Only the best-case scenario has even a 16% decrease in total emissions by 2050. In other words, only a radical and currently unpredicted change in how the world works (plague?) would result in the 50% decrease some leaders promise. Most possible emission reductions are in end-use efficiency and power generation. Lowering demand isn't on the map. If we didn't have the efficiency improvements that have been put in place since 1973, we would have 50% more emissions today, but the world has been "backsliding" in the last 15 years. I wonder if that's mostly China coming on-line? Or the whole world's fault?

slide: China's ambitious goals to reduce energy intensity (that's energy use per GDP). But as China further develops, the further GDP increase will (I assume) more than swamp that out.

Slide: breakdown of different projections. Other renewable (other than hydro) are only 2% in any scenario

Carbon capture. "I know there are some skeptics."

"Renewables will grow a lot but they're growing from a very small base. It remains to be seen if they will have an impact."

Doing a bit of Googling on "iea criticism" gets this. The suggestion is that IEA is pro-oil. Unsurprising, since "[t]he IEA is dedicated to preventing disruptions in the supply of oil, as well as acting as an information source on statistics about the international oil market and other energy sectors." Interesting question: "Has the IEA estimated what level of investment in other sources would be necessary to reduce fossil use to a minority of the total source?"

"We think it's possible to decarbonize the energy production sector. Decarbonizing transport will take longer." Note that that doesn't mean a move from fossil fuels; it just means carbon capture technology added to the current fossil mix.

Questions. I notice the talk has emphasized on the supply side, as I would expect IEA to ... I would like to ask whether reducing the demand ... despite the fact that our lightbulbs are energy efficient, you don't need the lightbulbs; we could raise the blinds! ... (very very long-winded non-question, much omitted) ... France having problems with its nuclear plants in the heat ... I would like to ask whether the third and fourth generation nuclear plants ... how safe are they going to be?

Ann Florini interrupted to call on three or four people to ask their questions in sequence and then have one big answer. Very clever—it keeps the questions much shorter and gets more of an exchange going.

Michael from LDCS. "I may add on to that question just now ... I also didn't get the differentation in your presentation ... in the US, it appears that decline in energy use goes along with decrease in economic growth ... is that happening?" (I may have gotten this question backwards).

Q: Did your comment on decarbonizing energy production mean we wouldn't use fossil fuels?

A: I am assuming energy efficiency on the demand side. Yes, third and fourth generation nuclear plants are better. Dessicants and chillers, some of my most favorite technologies. In some economies energy is linked to growth, in others it's not. ... What I tried to convey is that we'll still use fossil fuels to generate power but we'll capture the carbon.

Qs (I missed a few): I noticed that energy generation was a small contributer to particulate matter. What is the big contributor? Q: You said nuclear is an emissions-free source. But many parts of the cycle in nuclear are carbon-intense (mining, shipping, building the plant ...). So in what way can you possibly mean that nuclear is emissions-free?

A: technology and politics are equally important. I quoted Greenpeace on the zero emission quote; I love to talk about life-cycle issues. It was brought to my attention that the production of solar panels is a very dirty process. ... some platitudes about optimism.

Question I would like to ask: all of the economics of energy reflect a century of investment in fossil fuels, defended by vested interests. When you say that, for example, fuel cell energy costs $400/Kw and needs to cost $50/Kw to be competitive with gasoline, that reflects trillions (adjusted for inflation) of dollars of improvement in the internal combustion engine and very little relative investment in fuel cells. The world's energy policy is a market failure: vested interests control it to the detriment of the global human economy. What would it take to change that?

I bought a new backpack in Seattle, specifically for school, and I love it. It's actually made in Seattle; you can go to the showroom in South Downtown, and see the sewing machines. At the moment it holds:

• In the inner main compartment:
  • my laptop (in its Brain Cell)
  • two library books, by Immanual Wallerstein, whom I was hoping would have some interesting alternative ideas to IR Realism and Neoliberalism for the paper due in a week, and he does, and he's a very smooth writer, but about half of his writing triggers my BS meter, especially the Krondratieff cycle, which in his writing has so many exceptions and special cases that it reminds me of anthropogenic climate change deniers' charts in that it features facts being fixed around the policy
  • A plastic folder with my name placard, blank paper, relevant assignments for the day
• In the outer main compartment:
  • The totally awesome (if a bit too hot for this climate) Seattle Sombrero
  • A flimsy, cheap folding umbrella
  • The power cable for the laptop
• In the little top pocket:
  • A Jimi wallet with my EZ-link card, student card, and one or two bills. The plastic hinge has started to tear so I'm careful not to overfill it.
  • US Army handkerchief from the Fort Lewis PX. And, if I remember, a tissue package since hawker centers don't hand out free napkins
  • Keyring on the short lanyard, with mini Swiss army knife, house key, small nail clippers, and USB drive
  • Sunglasses
• In the left side pocket:
  • Palm Pilot Vx in blue hardshell(still ticking from 2001)
  • cell phone, turned off
  • Uni-ball Signo Gel Grip pens, 0.7 and 0.38mm
  • iPod Shuffle. I was happy with my original shuffle but it died a slow death so now I have a 2nd gen shuffle which I overpaid for at Mustafa Center before I realized that, despite the horribly overstuffed and crowded store, they aren't actually cheap.
  • headphones in case
• In the mesh pocket
  • Nalgene OTG water bottle.

On the one hand, you could say my efforts to get less materialistic have failed completely. On the other hand, you could say that if this backpack and its contents replace my old productivity pod, then I'm downsizing quite nicely.

Long history for Blankert; 22 years with the EU, before that Suriname and Tanzania. One-year "Visiting EU Fellow" at LKYSPP.

The EU has foreign policy? Several hundred EU staff work with China. There is a "delegation from the European Commission", which is an EU embassy. What is the EU's brand in China? Javier Solana, the Euro, and Schengen.

Does the EU's disengagement on Iraq prove that it can never agree or is this the exception that proves that the EU member states generally agree on foreign policy.

Merkel in China. (A fun, but subscription-required article about how Merkel stayed in a normal hotel room, got her own breakfast at the hotel buffet, and picked up and ate bread she had dropped on the floor.)

EU commission policy to propose a new IMF head.

Balance of member states favor independence for Kosovo, but there is still clear disagreement. EU member states act like "cabinet ministers" working to reach agreement on policy. Perry's question: people don't always agree. What is the EU mechanism to resolve these disagreements? A: Maybe not a mechanism, but an attitude to find compromise and stick with compromise. Therefore we are fans of having these endless debates. When agriculture debate had not concluded by midnight deadline, they stopped the clocks. On Taiwan, some member states said "we don't agree, but we don't want to break ranks with the EU position." Some upset with Poland for publicly disagreeing.

There is still an EU arms embargo towards China. Past presidents of Germany etc visited China in the 2000s and intended to lift the embargo but in fact didn't have the power to do so. No unanimous decision could be reached (and "big brother" applied pressure to keep the embargo) so the embargo is still in place. China's 2005 Anti-Succession law threatening Taiwan with war if they declared independence was a nice fig leaf for Europeans to maintain the embargo. (Joel: note that this law means that China would prefer that Taiwan continue to claim to be the legitimate ruler of all of China.).

What else do the EU bureaucrats do regarding China besides embargos? Nuts and bolts engagement: Clean coal, private cars, car emissions, etc. Chinese leadership is aware that pollution is so severe as to be a threat to their leadership. So this means the EU indirectly supports the Chinese leadership. But whatever you think about that, nobody wants instability in China. Huge EU trade deficit with China, but because of good EU macroeconomic policies, still only 0.5% trade deficit overall for EU. Currency revaluation. As with human rights, the EU raises the issue but doesn't let it interfere with the overall relationship.

The Lisbon agenda.

Chinese democracy. We shouldn't think that democracy (one manperson one vote) has always been there. Belgium only gave women voting rights in 1947. Wen Jiabao: "of course, one day China will be a democracy, but it may take a hundred years". So let's hold them to that deadline.

He's taking questions. I just realized I could have been liveblogging this. Better late than never. Email me now and I'll ask him your questions.

China was very upset about continuing arms embargo, but dropped the issue once it was clear it would not change. On human rights, it's the converse,with the EU pressing the issue, but China "very good at pretending to move, but they don't move at all." And each new EU president with 6-month rotating term falls for the show, but "my colleague says, they don't move an inch." After hearing a rosy speech, the colleague responded, "having seen it for 10 years, there has been no change." On trade, there's more movement.

Q: how accommodating is the EU on issues of trade and climate change? A: Trade is a special case because of laws required unanimity. (Seems like an excuse to me.) Q: Any special points towards China? A: I don't think so. Let's remember that the US is still our best friend. Q: In India we have many different Euro standards. How about in China? A: I'm not at all optimistic about Chinese emissions problems. And China is much less centralized than most people believe. "The mountain is high and the emperor is far away." All we can do is dialog—what good is dialog? But we can not tell them what to do.

("Mr Lee said Singapore would learn from other countries ... But all the major players like the United States, Europe, China and India need to be involved ... "If we shut down everything (in Singapore), resulting in zero emissions, the amount that we will save is equal to the increase in emissions in China as a result of economic growth over a period of three weeks. It's not something that we can do by ourselves," said Mr Lee.)

Recommended website

Another mention of China's "self-restraint" in giving ground on textiles. "The West was in principle in favor of free trade; we have some problems in agriculture, admitted, but we shouldn't let textiles [stay protected]."

Q: is there a difference between Taiwan and Chinese mainland? A: "There's a big difference. We adhere to the one-China policy; there's a slight difference between the American policy—well, it depends if it's the State Department or the Pentagon— and our policy. The one is 'we oppose Taiwanese independence', the other is 'we do not support Taiwanese independence.'

Q: there is no EU foreign policy because it's just the member states. If it doesn't affect a member state, it's not EU policy. ... A: The EU is the member states together, which have some institutions working for them, e.g., the European Commission, which is often seen as the EU, but the EU is the 27 member states. It's very hard to get consensus. For example, the position on Kosovo. Greece and other states have expressed themselves very clearly that they are against Kosovo independence. Take Taiwan and China. There we have made pretty strong statements. "After the succession law, we issued a strong statement. Chinese scholars told me, 'that's very strong language', they smiled and added, 'for the European Union!'".

What about China and Russia? Energy? We see China operating in Africa.... China was first extremely reluctant to talk to us about Africa. Another example of how much more sophisticated Chinese diplomacy has become: they now want to explain to us what they are doing in Africa. When there was international criticism about Sudan, they said, what are we doing wrong? Of course it could be sales policy, as all diplomacy is, but ....

Q: If China wants to speak to the US, it knows who to talk to. If China wants to talk to the EU, who does it talk to? Brussels or Berlin? A: long pause. "Uh, Brussels." Longer answer. Next year the French will hold the rotating presidency so maybe the Chinese will pick it up again. But I haven't heard anything from the new French government about the embargo.

I've been here a month and a half and have accumulated some general, if still quite naive, impressions about Singapore.

The infrastructure is excellent. People are generally nice; my Singaporean classmates are all awesome. Customer service (both private sector and public) is lousy; people tend to be superficially helpful but very prone to write you off as Somebody Else's Problem.

Even without huge parking lots as in the US, cars completely dominate the physical space. The difference between the US and Singapore is that, here in Singapore, cars dominate but other modes are still provided for. There are bus-only lanes; plenty of sidewalks, although not always and not always very good; long stretches of unbroken roadway at least have overpasses fairly regularly.

Singapore's government has tried plenty of measures, from enormous taxes to congestion charges to excellent public transportation, to limit car ownership, and has failed utterly. And car drivers are completely car-centric. If you have the right signal and stay in the crosswalk, you can walk across an intersection safely with your eyes closed. In any other circumstance, especially walking across the mouth of side streets while walking along a major road, you take your life into your own hands whenever you step down to the pavement.

The websites for public transit trip planning are awful. In Copenhagen, as well as in Seattle and Los Angeles, two cities not especially noted for their public transit, you can type in a starting address and a destination address and have a pretty good chance at getting detailed multi-modal instructions from point A to point B, including bus connections and rail if present, taking into account total transit time and even estimating how long the walking portions will take you. This is very much not the case in Singapore. This blog gives more detailed, but here are the highlights I've noticed:

• There are two bus companies, SBS (75% owned by ComfortDelGro, for which ownership is not easily available but which shared a director with Temasek) and SMRT (62% owned by Temasek), which also runs the subways. Each bus company's trip planner includes only its own buses.
• Both bus planners make you figure out which bus stop you want to start and end at, using, between the two of them, three different naming/numbering schemes.
• The UI for all of these systems violate common usability standards. Pressing enter at any time on the SBS site produces an error page.
• I haven't found a single map that shows all bus routes, so you can't just look at the map and work it out yourself.
• All in all, transitlink seems the best if you are going bus-only, and streetdirectory for bus and MRT (but excluding SMRT buses), but neither is adequate, both the SBS and SMRT planners are worse, and none compare to Seattle, LA, or Copenhagen's systems.

For months before coming to Singapore, I checked the weather forecast frequently, in yahoo and in the New York Times. It invariably forecast scattered thunderstorms and temperatures in the 80s Fahrenheit. At the moment it is sunny and mostly clear, and has not rained all day. The forecast on Yahoo is "Variably cloudy with scattered thunderstorms." Since I've been here I've experienced several separated weeks of nothing but rain; one week of nothing but sun; seemingly hot days, seemingly cool days, many hazy days, some very clear days, a few rollicking thunderstorms, and two or three massive downpours. Any time I checked Yahoo, it reported "scattered thunderstorms." Here's the current forecast; I'll check in with you Friday to tell you how it went:

Tonight: Variably cloudy with scattered thunderstorms. Low near 75F. Winds light and variable. Chance of rain 60%.
Tomorrow: Variable clouds with scattered thunderstorms. High 83F. Winds light and variable. Chance of rain 60%.
Tomorrow night: Scattered showers and thunderstorms. Low near 75F. Winds light and variable. Chance of rain 60%.
Tuesday: Scattered thunderstorms. High around 85F. Winds W at 5 to 10 mph. Chance of rain 60%.
Wednesday: A few thunderstorms possible. Highs in the mid 80s and lows in the upper 70s.
Thursday: Scattered thunderstorms possible. Highs in the mid 80s and lows in the upper 70s.

Update: what actually happened

Sunday evening: Clear, then after dusk we were treated to a lovely display of lightning crackling many miles to the north, over the mainland, for perhaps half an hour. No thunder.
Monday: medium rain in the morning, lightening to drizzle. Gray all day. No lightning or thunder.
Tuesday: cloudy. no lightning or thunder. heavy rain after midnight.
Wednesday: partly sunny. No lightning or thunder or rain.
Thursday: rain during the night. sunny. no lightning or thunder.

Cell Phone ripoff

My cell phone claimed $0 balance and I had to go to an M1 store to sort things out. Long story short, the place I bought the phone and card, Yeou Tat Trading Enterprises in Lucky Plaza, sold me a SIM card with face value of S$40 for S$40, but M1 sells the card directly and has an MSRP of S$20. Much of the value of the card then evaporated with daily charges and a one-month expiration for part of the value. The nice lady at M1 helped me change to a mobile plan more suited to my needs (very infrequent calling and SMSing) and told me that Lucky Plaza was notorious for swindles. Yeah, well, M1 isn't exactly working hard to help customers with well-labelled plans, are they? Anyway, I visited the store again and spoke to "Mike", who remembered about as much about what kinds of cards they might have been selling last month as Alberto Gonzales. So my recommendation is to only deal with the mobile phone companies at their stores, where they screw you openly with misleading offers and contradictory and illegible fine print.

HSBC not recommended in Singapore

I don't like advertising. It's basically professional lying in order to steal money. So I put deliberate effort into pre-empting advertising, by choosing not to buy products from companies with especially egregious advertising. I am all the sadder and more embarrassed to admit that, when a fellow student said she was signing up with HSBC instead of one of the local banks (DSB or POSB), my primary motivating for joining her was probably the positive image of HSBC that advertising put in my head.

I can now say with confidence that HSBC is a terrible choice for local Singapore banking. First and foremost, they don't offer the NETS card, which is one of main forms of payment in Singapore. Second, I have yet to find anywhere, point of sale or ATM, that my HSBC "debit" card is accepted other than HSBC ATMs. My credit card from my Seattle credit union is far more useful in Singapore. So, I may eat the S$40 fee for closing an account in less than six months and change to the endearingly named POSB.

The recently retired ambassador to Qatar, Chase Untermayer, was in school for a week, and I was invited to lunch along with the other Americans and a few Gulf-related students. Although he was a political appointee rather than a career diplomat (closely connected to the Bush family, including 41), he was a very nice and diplomatic guy. Lunch was fun not least of which because there was a serious thunderstorm before, during, and after, so we all shared umbrellas in a dash from the school lobby to a nearby restaurant (which had a very colonial feel, lots of dark wood with a glass-enclosed wine bar making up one wall). Lots of talk about the Qatar education system; at the Queen's initiative, Qatar in importing (and subsidizing) for) branches of American universities en masse. He pointed out that the increas in education opportunities for women has an unexpected consequence: the men aren't keeping up and so marriage prospects are increasingly strained for educated women. This led to a discussion between two students from the Gulf, one male and one female.

One thing really stood out for me: he mentioned, twice, that the office of the Vice President was very high on his list of places to go whenever he was recalled to Washington for meetings. One time I think he said, National Security Advisor, then OVP, then Commerce, State Department, etc; and the second time Secretary of Defense, then OVP, then the other places. I thought that striking, especially since his actual boss, I would have assumed, would be the Secretary of State, but that didn't place higher than fourth or fifth in his lists. One more confirmation, I guess, and from a very different channel, of the extraordinary position Cheney holds in this government.

He also mentioned that Al-Jazeera was the number one issue during his term. I skipped his general lecture, but students who attended said that he gave a spirited defense of the US program of promoting democracy, that he faced tough questions from Chinese students, that most listeners were not impressed with the speech, and that American politicians (him specifically) have a tendency to give very long-winded and circular answers to tough questions.

A few questions that I didn't ask at lunch, because they didn't seem appropriate and I couldn't figure out how to word them so they would be and because I don't want to (further?) develop a reputation as a troublemaker:

• You mentioned that you are going to work for a real estate company, and that you decided to retire as ambassador because you would have had to leave the post after the election anyway. Did the company approach you? Were you looking for a job to retire to? Is three years a typical term for a political appointee? Do you not expect Republicans to retain the presidency in 2008? If they did, would you expect to continue in the job?
• You said you were asked to serve in Qatar. Does this mean that you didn't request an ambassadorship? Does it mean that the administration wanted a political operative, rather than a career ambassador, in Qatar? If so, why? (Wikipediaing sinecure leads to this very interesting page that could serve as the basis of a great, if long-winded, naming convention.)
• Many of your google hits are from somebody named "Captain Eric May" and an organization called the "Ghost Brigades", having something to do with 9/11 conspiracy theories. Have you met him? Why is his attention directed towards you? Is he your cyber-stalker?

Osborne, S. and K. Brown (2005) "Managing the process of innovation in public services" in Managing change and innovation in public service organizations, Routledge (pp. 184-213)

Detailed guidelines about how to introduce managed competition to public services (e.g., subcontracting the garbage collection). If you can accept the premise that this is a good idea, or the even stronger form that most government services should be privatized, then you'll find the chapter an unobjectionable and useful list of detailed steps and tips for privatizing your government services, including the advice to not use the word "privatizing". Several forms of managed competition are discussed, including contracting out (privatizing), public vs private bidding, public vs public bidding, and contracting in (outsourcing from one government entity to another). Ignoring the context of ideological warfare in which this advice will be implemented, it is reasonable, thoughtful, and, I would expect, helpful.

Rose, R. (2005) "Can a lesson be applied?" from Learning from comparative public policy: a practical guide, Routledge (pp. 103-116)

Notes on how policies are and are not portable between different countries and cultures. If you're in a hurry, read only boxes 8.3, 8.4, and 8.5.

World Development Report 2002, "Building Institutions: Complement, innovate, connect and compete" (p. 2-27)

How to work on your institutions so that they promote markets so that your people stop being poor.

• pp 4-5. "Four main lessons emerge for institution building. ... Design them to complement what exists—in terms of other supporting institutions, human capabilities, and available technologies. ... Innovate to design institutions that work—and drop those initiatives that do not. ... Connect communities of market players through open information flows and open trade. ... Promote competition among jurisdictions, firms, and individuals."
• p 8. Institutions. Channel information about markets, define and enforce property rights and contracts, increase or decrease competition in markets.
• Figure 1.2. Shows correlation between "financial depth" (ratio of liquid liabilities to GDP) and GDP growth. Having shown a correlation, it then claims causality in the title, "Financial Depth generates growth"
• p 10. "Institutions also affect how countries deal with conflict. A recent study found that growth and poverty outcomes in Asia, Latin America, and Sub-Saharan Africa since the mid-1970s have depended on the quality of institutions for conflict management.9 In divided societies, such as those with ethnic fragmentation or high inequality, low-quality institutions for managing conflict—including low-quality government institutions and inadequate social safety nets—magnify external shocks, triggering distributional conflicts and delaying policy responses. Prolonged uncertainty in the economic environment and delayed policy adjustments curtail subsequent economic growth." Now that sounds interesting. Will have to look up footnote 9.
• p 14. Box 1.8 about computerization of land registration in Andhra Pradesh. I wonder if any Indian classmates know anything about this or similar initiatives and how they've fared in the last six years?
• p 25, Box 1.18, crises and institutional change in Malaysia. "The implication for policymakers is clear: if crises expose real vulnerabilities in markets, policymakers should take advantage of these times to fix the vulnerabilities." That sounds familiar.
• p 26. "Development experience shows that markets can provide the means to attain sustained increases in living standards for people around the world." I don't know why I'm so irritated with and skeptical of the pro-market, privatization stuff on paper when, at the same time, I support the concept of free markets and am well aware that China didn't promote tens (hundreds?) of millions of people from poverty to the middle class through central planning. Maybe all of the privatization stuff we read for this class tweaks me by reminding me of the abuses of privatization in practice, all of the public-cost-for-private-benefit deals sweeping the US right now from sports stadiums to war profiteering.

Neo Chapter 8: Process Innovation: Creating Agile Structures and Systems

• Interesting chapter about some nuts and bolts of Singapore's government: the various reinventions and other initiatives. No mention of any failed initiatives. Also, no hint of the privatization and competition aspects that other readings this week insist are so important to improving government.
• pp 402-403. 5% of annual budget can be rolled over to next year, to avoid "a spending binge at year-end." If you spend less than 95% of your budget, you'll lose budget next year. Your ministry can get a 10% advance during the year, to be repaid with interest. There is a mechanism to accumulate funds over 3 years for larger projects.
• p 404. Net Economic Value has been introduced, the public sector version of Economic Value Added (here spelled without a ™).
• p 414. Examples of horizontal structures within process innovation: "Strategic Issues Group", "Inter-Ministry Committees", "Committee of Permanent Secretaries" (not what you may think; Permanent Secretary is the highest non-political staffer in a Ministry, and works for the Minister), "Sectoral Committees", "Inter-Ministerial Committee", "National Security Coordinating Committee", "National Research and Innovation Committee". I wonder what percentage of the average Singapore bureaucrat's time is taken up with initiatives as opposed to core work. I wonder what a good number would be. Would it change with the maturity of the government?
• p 415. "Speed in rushing to implement simple solutions becomes risky when the real solutions are non-obvious and are likely to have unintended second and third order consequences." Yes! "... Thus horizontal networks, temporary and reconfigurable teams, were required for engaging the right perspectives to find the right solutions and coordinating their efforts in a network fashion." Any details or anecdotes to share? PS21, "Public Service for the 21st Century". Hmm. "PS21 was launched as a grassroots movement grounded on a conviction that public sector staff would be more ready to respond positively to change when they were themselves actively involved in learning and looking for improvements all the time...." You use grassroots very differently than I'm familiar with, Mr Neo.
• More examples: single web access portal; "e-government maturity framework guided the public sector in the development and deployment of e-services and e-governance..."; lots of awards for Singapore in e-governance.
• "e-government action plan II [sic]", S$1.3b over 4 years. "iGov2010 master plan", S$2b over five years. As the price goes up, the names get even worse.
• p 430. Even though I skim lots of pages, I try to read the introduction and conclusion completely. But it's hard when the conclusion starts with a sentence like "Strategic intent provides the direction, drive, and dynamism to management processes such as planning or budgeting to become organizational change capabilities." Faced with text like that, I find my eyes involuntarily saccading to the next paragraph.

Fun excerpts from the IMF 2006 World Economic Outlook (all direct quotes):

• The world economy is in the midst of an extraordinary purple patch, with what looks like a third year of significantly above-trend growth. ... Perhaps the best reflection of the times is that sub-Saharan Africa is headed for its best growth performance in over 30 years.
• Corporations are usually net borrowers. In 2003 and 2004, though, total corporate excess savings (undistributed profit less capital expenditure) in the G-7 countries amounted to $1.3 trillion, which was more than twice the combined current account surpluses of emerging market and developing countries over the same period.
  [This is due to, first,] accommodative monetary and fiscal policy rather than, as commonly believed, productive efficiency. The second and arguably more important component is falling capital spending. ... the real price of capital goods has declined sharply, so less has to be invested .... Another reason is a drop in real capital spending.
• Consumption picked up—driven more by accommodative policy and its effects on house prices and household wealth than by improved job prospects.

From the IMF April 2007 World Economic Outlook:

• The U.S. "addiction" to oil comes largely from gasoline consumption, which as a share of GDP is nearly five times that in other major industrial countries (see figure). Its share in total U.S. oil consumption is a staggering 43 percent, compared with an average of 15 percent in other countries. (The difference is less pronounced when diesel and gasoline are lumped together: 59 percent for the United States versus an aver- age of 38 percent for others.) Low U.S. gasoline prices and weaker fuel efficiency standards likely explain these differences. Fuel efficiency in the United States is 25 percent lower than the EU average and 50 percent lower than that of Japan (An and Sauer, 2004). ... Over the past 20 years, U.S. oil consumption has grown on average by 1.4% a year, compared with a range of -0.5% to 0.6% in the other major advanced economies.
  What explains these differences? ... The remarkable result is that the United States has the lowest (and an insignificant) estimated long-run price elasticity (-0.01) and the second highest income elasticity following Japan. [Joel: in other words, Americans have been buying as much gas as they want, damn the price. This apparent effect is partly explained by reliably cheap and relatively untaxed gas in the US since 1984: if the price of gas didn't change during the measured period, you won't see a change in consumption relative to price. Hence, apparent price inelasticity.]
• Nevertheless, the results are consistent with the stylized facts discussed above and the more significant efforts made in major European countries and Japan relative to the United States to reduce oil consumption, in particular in transportation. These include higher taxes on gasoline, more stringent fuel efficiency standards, a gradual switch to diesel (which has increased efficiency), and heavier investment in public transportation. In power generation, seri- ous steps have been taken to switch to renew- able energy and natural gas.5 These policies also reflect generally stronger efforts to tackle environmental problems: all these countries have ratified the Kyoto Protocol and are acting to achieve a 6—8 percent reduction in carbon dioxide emissions relative to 1990 levels by 2012.

John Williamson, What Should the World Bank Think about the Washington Consensus

Executive Summary: John Williamson called. He wants his phrase back. Following is all quotes:

• Specifically, there is a real danger that many of the economic reforms favored by international development institutions—notably macroeconomic discipline, trade openness, and market-friendly microeconomic policies—will be discredited in the eyes of many observers, simply because these institutions are inevitably implicated in views that command a consen- sus in Washington and the term 'Washington Consensus' has come to be used to describe an extreme and dogmatic commitment to the belief that markets can handle everything.
• My sixth reform was trade liberalization. Here I see little reason to doubt that I reported accurately on opinions in the international financial institutions ... But this is another area where critics can rightly claim that the policies that nurtured the East Asian miracle were, at least in some countries, at odds with the policies endorsed in the Washington Consensus.
• How is it that a term intended to describe a technocratic policy agenda that survived the demise of Reaganomics came to be used to describe an ideology embracing the most extreme version of Reaganomics?
• I would not subscribe to the view that [market fundamentalism] offer[s] an effective agenda for reducing poverty. We know that poverty reduction demands efforts to build the human capital of the poor, but the populist interpretation fails to address that issue. We know that an active policy to supervise financial institutions is needed if financial liberalization is not to lead to financial collapse, which invariably ends up using tax revenues to write off bank loans that were made to the relatively rich. And some measure of income redistribution would be recommended by any policy that was primarily directed at reducing poverty rather than simply maximizing growth, but market fundamentalists rule out all income redistribution as plunder.
• One can react to the semantic dilemma posed by the different definitions currently in use in three possible ways. Consider these alternatives:
  • Insist on the original usage ...
  • Abandon the term ...
  • Endorse a post-Washington Consensus ...
• The hopeless quest to identify a consensus where there is none should be abandoned in favor of a debate on the policy changes needed to achieve a rounded set of objectives encompassing at least the level, growth, and distribution of income, as well as preservation of a decent environment.

Png Chapter 7

• Economies of scale
• diseconomies of scale
• economies of scope
• diseconomies of scope
• opportunity cost
• transfer price
• economic value added
• sunk costs

Yup. Next! (transfer price and sunk costs are my favorites)

Postscript: according to the textbook, and Wikipedia, Economic Value Added is actually trademarked. How ridiculous is that? A quick googling shows that the term EVA is written with an (r), with no special mark, with a tm, and with both an R in a circle and with no special mark by its inventor. What does the trademark even mean? What power does it give Joel Stern over the use of those three words in sequence?

SMIG reading

Kegley, Charles W Jr. The Neoliberal Challenge to Realist Theories of World Politics.

• Let's look at both realism and neoliberalism because the spectrum between the two of them includes most other theories.
• Most superfluous sentence: "It is axiomatic that for this book's pedagogical goals to be serviced, readers need to be exposed to the assumptions underlying both the realist and liberal-idealist theoretical heritage." Does servicing pedagogical goals lead to a happy ending?
• Conclusion: we need to combine realism and neoliberalism because they both have useful things.
• Joel's conclusion: piffle! To elaborate: I'm skeptical of the premise, which is that most theories in the literature are a spectrum between realism and neoliberalism. Or rather, that may well be true, but it's sad if it is. Just as with neoclassical economics, it seems self-evident to me that many other factors, such as psychology, mob behavior, chaos theory and complexity theory, economic (marxist?), culture, and other factors are huge explainers of IR, at least to the extent we can explain it at all. Both realism and neoliberalism, as presented in our reading, seem far too simplistic, conflate normative and descriptive elements too freely, and otherwise fail to satisfy even as interpretive models.
• Update: reading notes from other students have pointed out some useful things in this paper that I missed with my skimming. In particular, this very critical piece of foundation for any thinking on the subject:

  Four Principle Tasks that need to be fulfilled by a theory in international relations.
  The theory needs to:

  1. Describe
  2. Explain
  3. Predict
  4. Prescribe

Liberal International Theory: Common Threads, Divergent Strands

• "In typologies of international relations theory, liberalism, realism, and marxism are often presented as the three dominant traditions of the twentieth century. ... This chapter analyzes the development of liberal international theory ..."
• Most superfluous sentence: "There are good reasons for embarking on such a project." This sentence led off the second paragraph and I stopped looking for superfluity, having so quickly found such a zenith. If there were no good reasons, would you still have embarked on the project to write this essay?
• "liberalism is committed to the steady ... expansion of human freedom through various political and economic strategies, such as democratization and market capitalism, ascertained through reason and, in many cases, enhanced by technology." This is the traditional definition, going back centuries, into which most Western politicians, including "conservatives" (and Bush, in word if not deed), clearly fall. But how does that relate to liberalism in IR in the 20th century?
• Key points of traditional liberalism:
  • evolution to greater human freedom (security, standard of living, human rights)
  • international cooperation
  • modernization
• "The most striking change in attitude is that confidence in progress has been more qualified in the postwar period."
• Six strands of post-war liberalism
• "Can liberal international theory stand on its own? ... 'most contemporary liberals seem to accept large portions of both marxist and realist explanations'"

Scott Burchill, Liberal Internationalism

• War. This section seems to ignore the huge role of the US in starting many wars, the even more huge preponderance of nasty, multi-decade civil wars, etc.
• points awarded for pointing out that free trade benefits the rich and often not the poor. I don't have much to say about this essay, perhaps because most of it is non-objectionable.

I would like to emphasize to non-American readers some unobvious complications in the US school reform/school voucher/school choice issue. It's not just about performance and management. Education is compulsory in the US up to age 16, at a free public school, a private school (many of which are religious), or through home schooling. Part of the mission of public schools is to provide civic education and support civil culture. Many parents in the US are opposed to some parts of this mission; key controversies include whether or not prayers should be integrated into required schooling (currently illegal); whether or not the theory of evolution should be taught, and with or without religiously motivated alternatives (current law is yes and without); to what degree human sexuality should be taught; the boundaries of free speech and expression in schools; and to what extent non-heterosexual students can associate in school. Any discussion of school vouchers must be understood in the context that these issues, as much or more than school performance, motivate participants. Some people seek vouchers as a step towards eliminating public education funding (which, as you may remember, is about 3.5% of all employment in the US).

Further, the issue of performance measurement is also controversial; in a nutshell, one argument is that schools must be held to performance standards as determined by standardized tests; the counter-argument is that this leads to pedagogy directed solely at test scores, to the exclusion of more general education and other school functions such as socialization, arts, etc.

Bottom line being, US school reform through vouchers is probably not a good candidate for a case study about how to implement reform. Or, on the other hand, if you think that most refo