Best deal for a Master’s degree in Economics?

This has got to be one of the best deals around. I got this mail from the highly ranked Toulouse School of Economics,

Tuition fees for [the English language] Master’s degree amount around 300 Euros for one academic year. Social security (compulsory health insurance) for students amounts 200 Euros per academic year. For living expenses in Toulouse, you should count at least 500 Euros per month (survival) and more probably 700 to 800 Euros all included.

Best regards
Aude Schloesing

Toulouse School of Economics
Université Toulouse 1
Manufacture des Tabacs
31042 Toulouse Cedex (France)
tel: + 33 (0)5 61 12 87 65
fax: + 33 (0)5 61 12 86 37
tse@univ-tlse1.fr

Prices, prices, prices

From BBC’s website,

The focus on reducing carbon emissions has blinded us to the real problem - unsustainable lifestyles, says Eamon O’Hara.[...]

We urgently need to think about the more fundamental concept of sustainability and how our lifestyles are threatening not only the environment, but developing countries and global peace and stability[...].

How many people are tired and weary of modern living? The endless cycle of earning and consumption can be exhausting and does not necessarily bring happiness and fulfillment. Can we do things differently, and better?

I don’t think an appeal to our better selves to change our lifestyles is going to work. And I certainly don’t want the government to tell me in detail what I can or can’t do.

What we need to do is to get the prices right. The enormous environmental problems in China and India show what happens if you don’t get prices for water, power, and pollution right. This is not at all simple and easy to do; rich OECD countries are also struggling to get to grips with it. But it is absolutely fundamental.

Carbon offsets and waste, fraud, and corruption

On Maverecon, Willem Buiter writes a sensible post, Carbon Offsets: Open House for Waste, Fraud and Corruption,

Offsets, the creation of credits that can be added to the (national, regional or global) CO2E [carbon dioxide equivalent greenhouse gas emissions] quota under cap and trade schemes, require not only the (difficult) verification of how much CO2E is actually emitted in the real world, but also the impossible verification of how much CO2E would have been emitted in some counterfactual alternative universe. The quantity of offset credits earned by some activity is the net quantity of CO2E that has been saved as a result of this activity.

Just stating it makes one shout out: impossible! Fraud! Bribery! Corruption! Wasteful diversion of resources into pointless attempts at verification! And indeed this is what is happening before our eyes. Enterprises get paid for not cutting down trees and for installing filters and scrubbers they would have installed in any case. The new Verification of the Carbon Counterfactual industry is growing in leaps and bounds. The amounts of money involved are vast and the opportunities for graft, bribery and corruption limitless. The offset proposal has birthed a monster.

Who came up with this demented offset concept? It’s an attempt to placate the developing world for not having enough CO2E emitting activities historically to benefit from a significant free initial allocation of credits in proportion to a country’s historical track record of CO2E emissions[...]

- but read the post.

Best universities in economics

1	Massachusetts Institute of Technology (MIT)	USA	5.75
2	Harvard U	USA	5.56
3	Yale U	USA	4.99
4	Princeton U	USA	4.76
5	U Chicago	USA	4.64
6	U Toulouse I (Sciences Sociales)	France	3.87
7	U California - Berkeley	USA	3.77
8	Northwestern U	USA	3.73
9	New York U (NYU)	USA	3.66
10	London School of Economics	UK	3.57
11	U Pennsylvania	USA	3.51
12	U California - San Diego	USA	3.25
13	U California - Los Angeles	USA	3.19
14	Stanford U	USA	3.12
15	Boston U	USA	3.08
16	U Wisconsin - Madison	USA	3.07
17	U Rochester	USA	3.03
18	U Texas - Austin	USA	3.01
19	Columbia U	USA	2.93
20	Brown U	USA	2.85

Source: Productivity ranking from econphd.net. The ranking is based on the average number of equivalent papers published by a department’s top 15 authors.

Economics in Toulouse is now taught (in English) in the Toulouse School of Economics, research takes place in the excellent Institut D’Economie Industrielle.

President Sarkozy on competition

France’s new president, Nicolas Sarkozy, recently persuaded his fellow European leaders to drop the principle of “free and undistorted competition” from Article 3 of the old constitutional treaty. He asked, “Competition as an ideology, as a dogma: what has it done for Europe?”

He is right. Apart from making the Europeans prosperous, keeping prices low, businesses honest, encouraging innovation, and sweeping away incompetence, what has competition ever done for Europe?

The Paris School of Economics

Why start the new Paris School of Economics? Why not build up the already existing world-class Institut D’Economie Industrielle in Toulouse? (Here is an article about IDEI by David Warsh).

One possibility is that the IDEI is too free-market oriented for the French establishment. The French establishment, both on the left and on the right, is statist.

And of course there is a long French tradition of having the best of everything in Paris. A French academic who made it to one of the Paris institutes is not about to go into exile in the provinces. So if there is a large group of good economists in Paris, why not organize them into a school and gain critical mass?

There is now also a Toulouse School of Economics. It offers various programs, including a two year master’s degree program, taught in English.

Is nuclear green?

Here is an article by Jesse Ausubel, Renewable and nuclear heresies (pdf),

Abstract: Renewables are not green. To reach the scale at which they would contribute importantly to meeting global energy demand, renewable sources of energy, such as wind, water and biomass, cause serious environmental harm. Measuring renewables in watts per square metre that each source could produce smashes these environmental idols. Nuclear energy is green.[...]

The article is discussed in New Scientist under the heading Renewable energy could ‘rape’ nature.

Foreign aid quality

Denmark prides itself on giving a large proportion of its GDP as foreign aid to poor countries. But is there a trade-off between quality and quantity?

Follies rise amid Afghan ruins

By Rachel Morarjee and Stephen Fidler

It was a showcase project to demonstrate the benefits of renewable energy: a fountain and a display of coloured lights at a traffic island in Kabul run from solar panels. The project was small – but significant enough to attract a handful of foreign and local notables to its official opening in December 2005.

All seemed to be well during the opening ceremony. But soon after the dignitaries left, the fountain was switched off, never to work again. In fact, things were not as they seemed: the fountain had been powered not by solar energy but by a diesel generator hidden nearby. The solar panels were never powerful enough to run the fountain, say people associated with the project, and there was no electricity storage to allow the lights to be turned on at night.

The project, managed by the Asian Development Bank and financed ostensibly by Denmark, represents to some a microcosm of the failings of aid to Afghanistan [...]

The article in Financial Times (subscription necessary) goes on to discuss two other project of similar quality.

Biofuel myths

In the International Herald Tribune Eric Holt-Giménez writes that we need a public enquiry into the myths about biofuel:

 

• Biofuels are clean and green.
• Biofuels will not result in deforestation.
• Biofuels will bring rural development.
• Biofuels will not cause hunger.

Infant industry protection

Ha-Joon Chang writes that almost all rich countries got wealthy by protecting infant industries and limiting foreign investment.

Once upon a time, the leading car-maker of a developing country exported its first passenger cars to the US. Until then, the company had only made poor copies of cars made by richer countries. The car was just a cheap subcompact (”four wheels and an ashtray”) but it was a big moment for the country and its exporters felt proud.

Unfortunately, the car failed. Most people thought it looked lousy, and were reluctant to spend serious money on a family car that came from a place where only second-rate products were made. The car had to be withdrawn from the US. This disaster led to a major debate among the country’s citizens. Many argued that the company should have stuck to its original business of making simple textile machinery. After all, the country’s biggest export item was silk. If the company could not make decent cars after 25 years of trying, there was no future for it. The government had given the car-maker every chance. It had ensured high profits for it through high tariffs and tough controls on foreign investment. Less than ten years earlier, it had even given public money to save the company from bankruptcy. So, the critics argued, foreign cars should now be let in freely and foreign car-makers, who had been kicked out 20 years before, allowed back again. Others disagreed. They argued that no country had ever got anywhere without developing “serious” industries like car production. They just needed more time.

The year was 1958 and the country was Japan…

Read the article here.

Ha-Joon Chang is the author of Kicking Away the Ladder: Policies and Institutions for Economic Development in Historical Perspective and the forthcoming Bad Samaritans—Rich Nations, Poor Policies and the Threat to the Developing World. 

Easterly on the ideology of Development

 William Easterly on The Ideology of Development,

A dark ideological specter is haunting the world. It is almost as deadly as the tired ideologies of the last century — communism, fascism, and socialism — that failed so miserably. It feeds some of the most dangerous trends of our time, including religious fundamentalism. It is the half-century-old ideology of Developmentalism. And it is thriving.[...]

Sachs, Columbia University’s celebrity economist, is one of its main proprietors. He is now recycling his theories of overnight shock therapy, which failed so miserably in Russia, into promises of overnight global poverty reduction. “Africa’s problems,” he has said, “are … solvable with practical and proven technologies.” His own plan features hundreds of expert interventions to solve every last problem of the poor—from green manure, breast-feeding education, and bicycles to solar-energy systems, school uniforms for aids orphans, and windmills. Not to mention such critical interventions as “counseling and information services for men to address their reproductive health needs.” All this will be done, Sachs says, by “a united and effective United Nations country team, which coordinates in one place the work of the U.N. specialized agencies, the IMF, and the World Bank.”[...]

It stresses collective social outcomes that must be remedied by collective, top-down action by the intelligentsia, the revolutionary vanguard, the development expert. As Sachs explains, “I have … gradually come to understand through my scientific research and on the ground advisory work the awesome power in our generation’s hands to end the massive suffering of the extreme poor … although introductory economics textbooks preach individualism and decentralized markets, our safety and prosperity depend at least as much on collective decisions.”[...]

The ideology of Development should be packed up in crates and sent off to the Museum of Dead Ideologies, just down the hall from Communism, Socialism, and Fascism. It’s time to recognize that the attempt to impose a rigid development ideology on the world’s poor has failed miserably. Fortunately, many poor societies are forging their own path toward greater freedom and prosperity anyway. That is how true revolutions happen.

We can no doubt expect a response from Jeffrey Sachs.

 

Grain’s agrofuel report

Grain, an NGO that supports poor farmers in poor countries, has published a large report that is getting a lot of publicity.

The press release is here, the report, a special issue of the magazine Seedling, is here, further reading here.

We begin with an introductory article that, among other things, looks at the mind-boggling numbers that are being bandied around: the Indian government is talking of planting 14 million hectares of land with jatropha; the Inter-American Development Bank says that Brazil has 120 million hectares that could be cultivated with agrofuel crops; and an agrofuel lobby is speaking of 379 million hectares being available in 15 African countries. We are talking about expropriation on an unprecedented scale…

The UN World Food Program in Somalia

The World Food Program dumps food on the market in Somalia, with predictable results. From The Independent,

“Food aid sent to Somalia to combat one of the world’s largest malnutrition crises has been criticised by Somali elders for causing violence - and for being delivered at the start of the harvest season.

More than 33,500 tonnes of food aid has been delivered to Somalia by the UN’s World Food Programme (WFP) since the start of the year. But in Marere district in the lower Juba valley, farmers and elders said the food distribution had brought chaos and driven down the price of maize by 60 per cent.

“WFP shouldn’t have brought it now,” said Mohammed Abdullahi Gure, chairman of the elders committee in Marere, who said distribution of the food had caused serious security problems.[...]

It is not the first time that Marere’s elders have criticised the WFP. After a chaotic food distribution last year, which also took place during the harvest season, the elders wrote to WFP asking the UN organisation not to deliver food again.[...]

Musa Yusuf Ahmed, 44, was a policeman before the Somali government collapsed in 1991. Now, he tries to make a living from farming, growing maize, beans and watermelons. He normally sells a 50kg bag of maize for 100,000 Somali shillings (about £3.10), but Mr Ahmed said it had dropped to 40,000 (£1.25). “For we farmers it is a big problem,” he said. “The food will benefit the people with no money but it will hurt the farmers.”

Some recipients of the food aid have also claimed that the quality is so bad they have had to feed it to their animals…”

Farm subsidies

This letter made me laugh…

Rt Hon David Miliband MP
Secretary of State,
Department for Environment, Food and Rural Affairs (DEFRA),
Nobel House
17 Smith Square
London SW1P 3JR

16 May 2007

Dear Secretary of State,

My friend, who is in farming at the moment, recently received a cheque for £3,000 from the Rural Payments Agency for not rearing pigs. I would now like to join the “not rearing pigs” business.

In your opinion, what is the best kind of farm not to rear pigs on, and which is the best breed of pigs not to rear? I want to be sure I approach this endeavour in keeping with all government policies, as dictated by the EU under the Common Agricultural Policy.

I would prefer not to rear bacon pigs, but if this is not the type you want not rearing, I will just as gladly not rear porkers. Are there any advantages in not rearing rare breeds such as Saddlebacks or Gloucester Old Spots, or are there too many people already not rearing these?

As I see it, the hardest part of this programme will be keeping an accurate record of how many pigs I haven’t reared. Are there any Government or Local Authority courses on this?

My friend is very satisfied with this business. He has been rearing pigs for forty years or so, and the best he ever made on them was £1,422 in 1968. That is - until this year, when he received a cheque for not rearing any.

If I get £3,000 for not rearing 50 pigs, will I get £6,000 for not rearing 100?

I plan to operate on a small scale at first, holding myself down to about 4,000 pigs not raised, which will mean about £240,000 for the first year. As I become more expert in not rearing pigs, I plan to be more ambitious, perhaps increasing to, say, 40,000 pigs not reared in my second year, for which I should expect about £2.4 million from your department. Incidentally, I wonder if I would be eligible to receive tradable carbon credits for all these pigs not producing harmful and polluting methane gases?

Another point: These pigs that I plan not to rear will not eat 2,000 tonnes of cereals. I understand that you also pay farmers for not growing crops. Will I qualify for payments for not growing cereals to not feed the pigs I don’t rear?

I am also considering the “not milking cows” business, so please send any information you have on that too. Please could you also include the current Defra advice on set aside fields? Can this be done on an e-commerce basis with virtual fields (of which I seem to have several thousand hectares)?

In view of the above you will realise that I will be totally unemployed, and will therefore qualify for unemployment benefits.

I shall of course be voting for your party at the next general election.

Yours faithfully,

Nigel Johnson-Hill

[via Guido Fawkes]

The Myth of Inevitable Progress

A review of Indur M. Goklany’s The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet by James Surowiecki.

The core message of Goklany’s book is that economic growth and technological change are the keys to improving people’s lives. But the success of China and India suggests that no one really knows how to bring these achievements about, which makes Goklany’s wide-eyed optimism about the future seem misplaced.[...]

The fact that every country’s experience is different does not mean that there are not deeper truths to be uncovered by looking at the experience of the world as a whole. But the truths thus far uncovered are relatively few in number and often limited in impact. So, yes, free trade is a good thing, subsidies to agriculture and official corruption are bad things, and so on. And policymakers should be aggressive in implementing those practices and policies that there is a good reason to think will work. But they also need to be cautious about taking theoretical pronouncements for reality, and they should be pragmatists rather than evangelists. After decades of misplaced certainty, it may be time to recognize the limits of our own knowledge — at least if we want the state of the world to continue improving.

Free Review of Environmental Economics and Policy

I have just received the first issue of the new Review of Environmental Economics and Policy in the mail. This issue can also be downloaded free of charge here.

The late, great Peter Bauer

An article (pdf) about Peter Bauer, the late, great development economist.

During most of Bauer’s career he remained a “voice in the wilderness”, “largely because he stood virtually alone in challenging the development orthodoxy that held central planning, forced savings, protectionism, and official international aid as main tenets.”

In the article William Easterly is quoted as stating that, “It is amazing how much of the research and thinking of my like-minded co-authors and me was anticipated decades ago by Bauer, without us realizing it.”

Peter Bauer’s contributions are often still neglected or marginalized in the economics profession.

Left Libertarian Reading List

Memo to self: Chris Dillow’s useful left libertarian reading list is here.

“For God’s Sake, Please Stop the Aid!”

A notable interview with Kenyan commentator James Shikwati in Der Spiegel.

Ugandan journalist Andrew Mwenda interviewed in The Times.

Vulture Funds

As I was driving to work this morning I heard a harangue on the radio about vulture funds. An unprincipled opportunist/astute businessman had bought $44 million worth of Zambian debt at a deep discount, for less that $4 million, had sued Zambia, and was awarded 15 million in court. The person on the radio was outraged.

It seems totally legitimate to me, except under the following conditions.

1. The debt is odious, e.g. because a country was ruled by a dictator who used the money for private benefits. In this case the debt should be considered personal. In an ideal world, if a poor country didn’t have the means to pursue members of a former dictatorial regime, it could sell the debt to a vulture fund, which would then perform a valuable social service in going after funds stashed away in various places.

2. The debt is illegitimate because the lender failed in its fiduciary responsibilities. There has been a lot of reckless and incompetent lending by the World Bank and other aid organizations. In these cases, debts should be canceled. That is not “debt forgiveness”. There is nothing to forgive.

The very existence of an aid organization implies that expertise is supposed to flow from the aid organization to the poor country. Aid organizations must therefore bear most of the responsibility for failed aid projects.

Maybe vulture funds could play a useful role here as well. A country could sell its claim on a bank or aid organization for cancellation of debt and reimbursement of payments  towards an illegitimate loan (with interest and damages), and the vulture fund would try to collect from the organization. Now here is a business opportunity. Go, Vultures!

Update: Here is a really useful post on felixsalmon.com.