Ruling Uzbekistan like in a James Bond movie

Acemoglu and Robinson just started a blog to accompany the launch of their new book, Why Nations Fail (reviewed by The Economist here). A recent post focuses on extractive institutions in Uzbekistan and stars none other than the repressive president's daughter, Gulnara (pictured below and more pics here) (Karimov has been President since 1991). Here's an anecdote:

Part of Uzbekistan is also ideal for growing tea. Interspan, a US company, invested heavily. But by 2006, Karimov’s daughter, Harvard graduate and international jet setter, Gulnara Karimova, had taken an interest in this market. Gulnara is a woman of many talents as you can see from her web page. For example she hangs out with rock stars like Sting and even duets with Julio Iglesias. Gulnara’s interest meant taking over Interspan’s assets and business. And this was not going to be by making an attractive offer. The company reports that men with machine guns, allegedly working for the Uzbek intelligence services, entered its offices and warehouses, and seized its assets and inventory. Its personnel were arrested and tortured. By August 2006, the company pulled out of Uzbekistan, and tea was now a Karimov family monopoly. The tea market is not the only one which Gulnara Karimova is said to have used coercion and expropriation to have taken control of. She has allegedly acquired shares in the Coca-Cola bottling franchise and in the oil sector through similar means, and controls the largest mobile phone operator, and has major interests in several other sectors, including cement and nightclubs. (Ironically, one of Karimov’s other daughters, Lola, is a “campaigner for the rights of children”!).

Two questions. Do people actually still wonder why Uzbekistan is poor? And second, who would've thought the line between perfection and insanity was so thin indeed?

Latex vs. powerpoint: Distribution across quality levels (wonkish)

In other words, all very bad presentations are powerpoint, and all very good ones are powerpoint. If you wanna signal you are not a 'very bad' candidate, using latex is a good idea.

A new boss for the World Bank

Given his usual lack of bold moves, it is highly unlikely that Obama will end the shameful practice of the US designating the World Bank boss in June when Zoellick steps down. So who is the US gonna pick? Here are some contenders: Larry Summers, Bill or Hilary Clinton, Susan Rice blah blah blah... Jeffrey Sachs writes in the Washington Post that he wants the job. Is this an important decision? Yes.

Clive Crook, from The Atlantic, puts it best:

If you need convincing about what's at stake, read Nancy Birdsall of the Center for Global Development. The World Bank's chief has enormous power within the institution, and the Bank needs to follow a substantially new course in future. The returns to choosing the right person to lead it would therefore be huge. Should it be an another American? Not in my view. The indefensible pact which gives this job to the US and the IMF job to Europe should be abrogated, and should be seen to be abrogated. If not now, when? If not by Obama, by whom? This requires a non-American to get the post. In a separate post, Birdsall disagrees. She thinks what matters is that the open, merit-based competitive process that's already supposed to be in place should be allowed to work. Then, if an American is chosen, fine. "Should an American end up as president, he or she would benefit tremendously from the legitimacy that only an open selection process can bestow." No doubt. But in that case how do you convince people that the process is what it claims to be? I'm willing to bet that neither of us will get our way.

Tracking flows of people in Geneva

Suggested reading

Why DSGE models have a conservative bias

Why political reforms are so hard in the wake of crises

Your right arm for a publication in the AER? (ht: Antonio Mele)

Book review: Treasure Islands by Nicholas Shaxson

Treasure Islands is a book about tax havens by a journalist who’s written for the FT and The Economist. It claims that tax havens and the whole offshore finance system is the reason behind all of the world’s ills including rising inequalities (the rich don’t pay taxes), the financial crisis, and poverty in Africa (oil, mineral and foreign aid money is welcomed with open arms in Geneva and the City of London which can hide it using its web of offshore satellites (Jersey, Cayman Islands, Bahamas etc…)). While the book can sometimes be vague and repetitive, it is full of interesting anecdotes, historical facts, and is a fresh reminder that something is rotten with the world economy. We no longer live in democracies but rather in plutocracies where money determines policies. This explains why offshore finance is “legal” and rich people pay no taxes while governments try to suck as much as possible out of the average joe. Tackling tax havens should be a priority, and it’s a much better idea than cutting pensions to reduce the debt burden of Greece. According to the book, 99% of deposits from Greece in Switzerland are undeclared to tax authorities.

Stand Up Economist

Many of our beloved colleagues are currently going through the hideous job market process......if all else fails (which I'm sure it won't!!!!!!!!!!!!), they could follow in the footsteps of this guy and become a stand up comedian.

I'm working my way through the vids, but my favourite so far is his take on the age old phenomenon of 's***t happens'.

How to express your love

Fourteen ways to express your love.

Spending Cuts In Greece

In all the drama about the Greece debt mess, here is something that I'm really surprised hasn't been well publicised. According to this article, apparently austerity cuts don't apply to the Greek defence sector. That is is, in the current talks, Germany and France are forcing Greece to continue to shell out billions of Euros on fighter jets, tanks and other defence related materiel as a condition of receiving further bailout funds.

A couple of questions come to mind:

1. Why does Greece even need to buy so much weaponry in the first place? It doesn't really face any potential aggressors in the region, and even if it did, NATO's collective action clauses mean they are shielded by the security umbrella of the rest of Europe and the USA in any case.

2. Why force the Greek people to bear the full costs of cuts, while meanwhile fully shielding the defence sector? If you have to make cuts as Greece does, everyone should be affected. Moreover, you should try and trim the fat in places you can while doing the least harm that you possibly can to people. Seems to me that the defence sector should be a prime candidate to cut in this fashion, since buying guns and tanks is not even productive investment, while cutting social expenditures is certainly harmful for welfare.

Whilst the motive for French and German authorities is obvious - it is to protect the bottom line of companies in the German and French defence industries and by extension the jobs of people in these companies - for me there is something sickening about forcing Greece to buy these (totally unecessary) machines of death and therefore forcing ordinary Greeks to bear the full brunt (and an unfair portion) of austerity cuts.