Who's Your Boss?

The Economist has a nice article on the variance in politicians' professions across countries. The U.S., unsurprisingly, has more lawyers than any other country, and a remarkable lack of diplomats, civil service professionals, economists, and academics. And is it surprising that the Chinese government boasts of so many engineers (among them, President Hu Jintao)? Or that the military is so well represented in S. Korea but not India?

What would a model of the political economy of the professions of national leaders look like? Is it a function of national history or present circumstance? Does the composition of the leadership speak to ideational national values, or materialistic desires? How does this composition change over time? How does one's profession affect levels of partisanship?

I wonder how this picture would look with a larger sample of countries and the inclusion of religious leaders.



(ht: Blattman)

Obama Does No Harm

On the day I voted for Obama, I expressed concern at his campaign rhetoric on trade, and openly hoped he was lying to score political points. Today, I am happy to report my wish has seemingly been granted: President Obama has taken back his word, and I couldn't be happier:

The administration has no present plans to reopen negotiations on the North American Free Trade Agreement to add labor and environmental protections, as President Obama vowed to do during his campaign, the top trade official said on Monday.

“The president has said we will look at all of our options, but I think they can be addressed without having to reopen the agreement,” said the official, Ronald Kirk, the United States trade representative. It was perhaps the clearest indication yet of the administration’s thinking on whether to reopen the core agreement to add labor and environmental rules.

There is even some indication that Obama will be willing complete the free trade agreements with Columbia and Panama, which were started by the Bush administration.

How much positive effect will these actions have? Likely very little. But the concern was always primarily negative: politicians can often do much harm even when they intend to do good. Dodging such bullets is cause for celebration.

To my knowledge, it is not common for elected officials to take the Hippocratic Oath, but perhaps it should be.

(ht: Mankiw)

The Academy Strikes Back

From Duck of Minerva, this sums up my feelings on Joseph Nye's recent op-ed on the irrelevance of academics to policy-makers:

Mexico gets $47b IMF Credit Line

From the IMF:

The IMF approved a credit line for Mexico of $47 billion in the first use of a new instrument designed to bolster strong performing economies against fallout from the current global economic crisis.

The Mexican authorities have stated they intend to treat the one-year arrangement as precautionary and do not intend to draw on the line. The Executive Board approved the arrangement under the IMF’s new Flexible Credit Line (FCL), which was created in the context of a major overhaul of the Fund’s lending framework on March 24, 2009.

The FCL is particularly useful for crisis prevention purposes as it provides the flexibility to draw on the credit line at any time. Disbursements are not phased nor conditioned on compliance with policy targets as in traditional IMF-supported programs. This flexible access is justified by the very strong track records of countries that qualify for the FCL, which gives confidence that their economic policies will remain strong.

Even if the Mexican government does not "intend" to draw on the credit line, the development is still really interesting. Word on the street is that Poland is next, with other developing-but-not-yet-developed countries mulling the possibility of asking the IMF for precautionary credit lines in the near future. 

Trillion Dollar Graffiti

Via Blattman, The Zimbabwean has started an eye-catching street propaganda campaign:





(Images from the newspaper's flickr stream)

Links and Asides and more Game Theory

-- DeLong on E.M. Forster, the Bank Panic of 1825 (in England), and the origins of the modern central banking system.

-- Ron Paul says we should send mercenaries and bountyhunters after the Somali pirates. I am in favor of this plan, as long as it is televised. (ht: Dittmeier)

-- Blog Wars: Thoma vs. Shadab on financial regulation; Cowen vs. DeLong on stimulus.

-- Eichengreen and O'Rourke look at falling world output and fire up the 'D'-word.

-- Joseph Nye says I'm irrelevant.

-- Kling on financial regulation as a chess game, from the new (and interesting) site dedicated to financial regulation, FinReg21. I find Kling's arguments to be pretty persuasive, and worry that the end result of this crisis is a slew of new regulations that don't actually increase systemic stability, but do incur deadweight losses. Somebody should build a game-theoretic model of regulation (if one is out there, please let me know).

-- Speaking of game theory, Tim Harford's Logic of Life Youtube series (which accompanies the book of same name) explains racial segregation using the chessboard framework of Thomas Schelling. If you want to think of an IPE application, consider attitudes towards immigration, or resource scarcity in ethnically-diverse countries. There are many others.

Game Theory and Piracy

From Zero Intelligence Agents comes this really interesting piece on the use of Game Theory to analyze the strategic interactions between states and pirates (my apologies for becoming so pirate obsessed lately!):

There has been mounting consternation regarding the recent threats of violent escalation by Somali pirates in response to the successful—yet deadly—rescue operation undertaken by the U.S Navy. As the AP reports:

"From now on, if we capture foreign ships and their respective countries try to attack us, we will kill them (the hostages)," Jamac Habeb, a 30-year-old pirate, told The Associated Press from one of Somalia's piracy hubs, Eyl. "(U.S. forces have) become our No. 1 enemy."
While this rhetoric serves pirates' purposes, in conveying a menacing facade, if we view the history of events leading up to these statements through the prism of rational choice we can easily identify them as simple cheap-talk.

Consider each pirate incident as a sub-game in a indefinitely repeated game between a pirate group and a state entity. The pirate group can either be of the type that is willing to use violence to get its reward, or not. In each stage of the repeated game, the pirates send a message to the state stating their type. The state then decides whether to use force to end the incident based on this signal.

Now, extend this simple model onto the events that have occurred over the past several month off the Somali coast. Up to recently, the game had been in equilibrium; the state's posterior belief at each stage [hostage event] about the pirates' type was that they were willing to use violence, and as such gave into their demands to rescue the hostages to minimize the loss of life (i.e., maximize the state's utility).

Over the weekend, however, the U.S. Navy took an off-equilibrium action by attacking the pirates to rescue the hostages. In knocking the system out of equilibrium, the dynamics of the system become more well-defined. In the old equilibrium, the use of violence was ex ante inefficient for pirates, since they were able to maximize their utility without using it. The use of violence, then, becomes a costly signal for the pirates, as it reveals tactics, capabilities and weaknesses.

This more robust understanding of the dynamics provides insights into the pirates' actual type; that is, pirates were either always willing to use violence, but did not do so in the old equilibrium because it was costly; or, they never were willing to and never will be, because thei beliefs about the state's willingness to use violence had been made clear, and killing hostages in the future will not increase their reward.

Regardless of this distinction, the threat of violence is clearly cheap-talk, since it does not inform the state of the pirates' type, and should not affect their actions. Put plainly, the pirates are either threatening the status quo (continued willingness to use violence), or are making a non-credible threat (new willingness to use violence). Any future policies to cope with the pirate situation in Somali, therefore, should not use these threats as a foundation as they reveal nothing about pirates' willingness to use violence.

(ht: Tony Arend and Chris Dittmeier)

Map of Pirate Attacks in 2009...

The American captain of a cargo ship held hostage by pirates jumped overboard from the lifeboat where he was being held, and U.S. Navy SEALs shot and killed three of his four captors, according to a senior U.S. official with knowledge of the situation.

Capt. Richard Phillips was helped out of the water off the Somali coast and is uninjured and in good condition, the official said. He was taken aboard the USS Bainbridge, a nearby naval warship.

At the time of the shootings, the fourth pirate was aboard the Bainbridge negotiating with officials, the source said. That pirate was taken into custody.

CNN.com has a really interesting map that shows the location of pirate attacks in 2009. Check it out here. 

Listmania

Like everybody else, I love lists. High Fidelity is one of my favorite movies (and pop novels), and the whole thing is basically about the psychological importance of creating, updating, and appreciating lists. My earliest appreciation of late night television came from Letterman's nightly Top 10. I routinely demand favorites lists from new acquaintances as a quick-and-dirty way of determining whether or not to pursue friendship. So it gave me some nerdy joy to find that Foreign Policy's impressive blog team have been list-making in the past few days.

The first was Thomas Ricks' 10 must-read books on military history. Not exactly my area of expertise, but who doesn't love a good war book? I was somewhat surprised and disappointed to see that The Rise and Fall of the Third Reich didn't make the cut, but then realized that Ricks' list should really be called "Top 10 Books about American Military Adventurism, Written by and for Americans". Even still I could quibble (No McCullough? No Kearns Goodwin? Do those have too much biography and too little military machination?), but it's tough to argue against any of those he included. It would've been nice to see some non-American inclusions, even as tokens (e.g. Thucydides), but I know that's not Ricks' bag.

Next came Stephen Walt's Top 10 books on international politics. He's a dyed-in-the-wool, capital-'R'-Realist, so I had some idea of what the list would look like before I saw it. Still, and again, it's tough to argue with any of his selections (although I'd have Theory of International Politics over Man, the State, and War and Strategy of Conflict over Arms and Influence. And no Morganthau or Keohane? Why not toss Wendt a bone?), even if I was surprised to see The Great Transformation included.

Drezner followed, and true to form he had to be a bit contrary. So we get a list of 10 worst books on international relations. Thankfully, I haven't read any of them, and now I know I don't have to. Thanks, Dan! I was a bit surprised that no Fukuyama, Barber, or Huntington made his Inglorious Hall of Fame. Then again, Drezner's always had a soft spot for nonfalsifiable grand theories.

Walt has promised a list of Top 10 articles, and Drezner may produce a Top 10 of IPE. If he does, I'd be willing to bet 10 internet dollars that All Politics Is Global is on the list.

Who Thinks Game Theory Isn't Realistic?

(ht: Mankiw)