Jacob Christensen

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Archive for February 21st, 2008

Exit Castro. Enter the Comparativists

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I’m late to the party here, but I just wanted to draw attention to this post by Brad deLong:

You take a look at the standard Human Development Indicator variables–GDP per capita, infant mortality, education–and you try to throw together an HDI for Cuba in the late 1950s, and you come out in the range of Japan, Ireland, Italy, Spain, Israel. Today? Today [2003/JC] the UN puts Cuba’s HDI in the range of Lithuania, Trinidad, and Mexico. (And Carmelo Mesa-Lago thinks the UN’s calculations are seriously flawed: that Cuba’s right HDI peers today are places like China, Tunisia, Iran, and South Africa.)

The point here is of cause that in evaluating Castro’s performance as the leader of Cuba for half a century, we should ask ourselves:

  1. Which countries are the relevant comparative cases when we look at Cuba’s performance in 1959?
  2. How have Cuba and the comparative cases developed economically, socially and politically since 1959?
  3. How can the US embargo explain deviations between the development in Cuba and the comparable countries of 1959?
  4. How can Castro’s policies explain deviations between the development in Cuba and the comparable countries of 1959?

Anybody…? Anybody…? Svante Ersson?

This, of cause, does not in any way constitute an endorsement of the US embargo. That the US held on to the embargo since 1991 can be explained relatively easily by looking at US domestic politics, but here the question is if both the US and Cuba could have reached a more optimal outcome with a more flexible US foreign policy towards Cuba.

Written by Jacob Christensen

February 21st, 2008 at 11:56 pm

Posted in Political science etc.,Politics

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Who’s Your Leader?

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According to a Gallup poll, 40% of US Americans now see China as the World’s leading economic power, against 33% who see the US as the leading economic power, 13% Japan and a mere 7% the European Union.

The bizarre aspect of this is that the GDP of the US in 2006 was 13.200 billion USD against a Chinese GDP of a little under … wait for it … 2.700 billion USD. That is about 20% of the US GDP – and there are more than four times as many Chinese as US Americans. Just in the European Union, the German economy is larger than the Chinese.*

Topic for discussion: Why do people (actually, I suspect that many Europeans would make equally wrong guesses about the Chinese economy) grossly overestimate the size of the Chinese economy and underestimate the size of the European economy? Is it the media talking up China, the result of business confederations using “the Chinese card” or what?

*If you want the IMF’s data, they are here.

Note #1: I recall reading a blog post or an article about the relative economic sizes of the world’s biggest economies earlier this week but apparently forgot to bookmark it.

Note #2: Yes, I am aware of the purchasing power problem and that the Chinese economy appears to be growing at a high rate, but the discrepancy between China’s perceived and real economic size is still mind-boggling.

Written by Jacob Christensen

February 21st, 2008 at 9:36 pm

links for 2008-02-21

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Written by Jacob Christensen

February 21st, 2008 at 1:25 pm

Posted in delicious.com

Flat Tax and Evasion

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I’ve del.icio.us’ed this as well, but the conclusions of the study of the Russian flat tax are worth highlighting

Our Russian results have several important policy implications. The adoption of a flat rate income tax is not generally expected to lead to significant increases in tax revenues because labour supplies are believed to be fairly inelastic. However, if an economy is plagued by ubiquitous tax evasion, as was the case in Russia, then a flat rate income tax reform may lead to substantial revenue gains via increased voluntary compliance. At the same time, a strong evasion response suggests that the efficiency gains from the Russian tax reform perhaps are smaller than previously thought. Using observable responses of consumption and income to tax changes, we find that the tax-evasion-adjusted deadweight loss from the personal income tax is at least 30% smaller than the loss implied by the standard method based on the response of reported income to tax changes. While a flat tax offers tangible efficiency gains, its reduction of tax evasion may be most important.

We would of cause expect the Danish and Swedish tax systems to be less plagued by tax evasion. Or?

Update: As soon as I had published this, I noted that the Danish Tax Ministry just released a report about flat tax covering some of the same issues about tax systems and tax evasion. Suffice it to say that the ministry is less than enthusiastic about the effects of introducing a flat income tax in Denmark because of the regressive redistribution effects compared with the present system.

Written by Jacob Christensen

February 21st, 2008 at 11:31 am

The Danish Nazi

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Søren Kam is, if not a household name, then an infamous person in Denmark. A volunteer in the German army during WW2, he co-founded the Schallburg Corps (Article in the Danish Wikipedia) which carried out a number of attacks against members of the Danish resistance and more general attacks, including an attack against Tivoli gardens in Copenhagen, as revenge against attacks against factories, railways and the like by Danish resistance fighters.

Kam’s real claim to infamy has been the murder of newspaper editor Carl Henrik Clemmesen in 1943, which some years ago became the subject of a documentary by Clemmesen’s grandson Søren Fauli who managed to track down Kam.

After the end of WW2, Kam managed to escape from Denmark, settled in Germany (or the be more precise: Bavaria) and gained German citizenship in 1956. The failure by German authorities to prosecute Kam for Clemmesen’s murder has been an occasional annoyance in Danish-German relations ever since. As Kam was a German citizen, Germany has not wanted to extradite him, and while the common EU arrest order should have opened the possibility of an extradition of Kam to Denmark, a Bavarian court – apparently basing its decision only on Kam’s own version of the murder – decided that he could only be charged with manslaughter and as such not be extradited to Denmark.

One particular twist to the tale is that the Danish People’s Party (which is otherwise very EU-sceptic) has made several initiatives in the Clemmesen/Kam case, criticising successive Danish Justice Ministers for not taking sufficient action against German authorities and forcing the extradition of Kam.

In any event, BBC Word Service has a documentary about Kam – available here (as streaming radio) or here (as a podcast for download). A couple of months ago, Daily Telegraph published an article about Kam and other nazis hiding in Germany.

Written by Jacob Christensen

February 21st, 2008 at 11:25 am

Posted in Politics

Tagged with , ,

Oh, the IKEAgony

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One of the weirder aspects of my life in Sweden is that the nearest IKEA store is placed in Sundsvall, some 250 kilometres away, while I had two big stores to choose between in Copenhagen and the one in Vangede was very easy to reach by local bus.

Umeå has been hoping forever for IKEA to open a store a bit further to the north (as in – well, you know where), and a couple of years ago, Mr. Kamprad heeded the call: IKEA opened a store in Haparanda.

Now one of the local newspapers tells us that IKEA is considering opening a store in Vaasa (aka Vasa in Swedish).

We shall see how long it takes before someone starts proposing building a bridge to Finland.

Written by Jacob Christensen

February 21st, 2008 at 12:30 am

Posted in Politics

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