Institutions – 51本色

G20 must end 鈥渙utsourcing鈥� of multilateralism

December 2, 2024December 2, 2024 51本色1 Comment

By Charles Abugre and C.P. Chandrasekhar

In multiple ways multilateralism, or the coming together of the international community to further global good, is under challenge today. 鈥楥onflicts鈥�, not least among them the genocide in Gaza, are an obvious challenge. But there is in the economic sphere a silent subversion of multilateralism underway that also needs to be stalled and reversed. This is the view that the 鈥渇inancing for development challenge鈥� is so huge and the share of the private sector in the holding and disposal of the world鈥檚 financial surpluses so large, that it is only private initiative that can successfully implement the programmes needed to realise the SDGs and address damaging climate change.

The corollary of that position is that the role of governments is no more to try and move surpluses from private to public hands (through new forms of international tax cooperation, for example) but to use the available public resources as means to unlock private investments and expenditures. The call is to go beyond the recognition that the tasks of realising the SDGs, ensuring the needed carbon transition, and building resilience the world over, are primarily governmental or 鈥榩ublic鈥� responsibilities, and that cooperation among governments (or multilateralism) is the best means to implement those tasks. Pragmatism demands, it is argued, that these tasks and therefore multilateralism, or the conjoint responsibilities of global governments, must be 鈥渙utsourced鈥�.

The nobel of influence in Economics or Why theories fail

October 21, 2024October 21, 2024 Yaku1 Comment

The only Nobel Prize that has nothing to do with the will of its creator, Alfred Nobel, was announced on Monday, October 14th. As usual, the announcement sparked a range of reactions, and as economist . This time, the prize did its job and recognized the contribution of neo-institutionalism to economics. Its influence is undeniable, as can be seen from the fact that these authors are widely cited in macroeconomics courses. For instance, Daron Acemoglu had long been mentioned in academic circles as a favorite to win the Nobel, much like Leonardo DiCaprio was repeatedly named a favorite for the Best Actor Oscar. While we are already familiar with the kind of economics that dominates classrooms and the hegemonic media, as well as the economics that influences politics and shapes economic policies, it鈥檚 worth discussing the theoretical and empirical contributions being recognized and their main critical observations.

Daron Acemoglu, Simon Johnson, and James A. Robinson (AJR) have been awarded for studies of how institutions are formed and affect prosperity. Their work addresses what is perhaps one of the most important questions in economics: How do we explain the economic disparity between countries? Why are some nations persistently wealthy while others remain consistently poor? We should understand prosperity as the plain and simple economic growth. If we rule out biological, cultural, or geographical reasons, what remains is dimension of the historical-political order. Development, then, is largely dependent on one key factor: In the early stages of nations, before they became modern states, what forms of government, civil codes, and laws were established? According to AJR, the root of development lies in the different types of political institutions that were established across the world. Thus, inclusive institutions are in sharp contrast with extractive institutions.

The state in Africa is a colonial state

August 27, 2024August 6, 2024 benyee1515ecd0a93Leave a comment

The default unit of analysis for many economists when dealing with national economics is the state. Yet, in economics textbooks 鈥榯he state鈥� is often assumed to be a neutral actor exogenous to economic processes. It is assumed to be the same 鈥� in essence – everywhere. This conception is based on a Eurocentric view of the state, which assumes all states are ahistorical Westphalian nation states based on Enlightenment principles. However, states are not neutral, but deeply shaped by historical processes. Analyses of 鈥榮tates鈥� in economics – country analyses, country data, evaluations of so-called 鈥榤acroeconomic fundamentals鈥� – must be rethought by taking the complexities of the state in Africa into account in their conceptualisations, analyses and policy proposals. In this piece, I unpack how the African state evolved as a colonial project and the implications of it being mischaracterized as neutral state.

A state like no other

The state in Africa has been mischaracterized as a neutral institution devoid of a problematic history which affects its present. In its simplest terms, the state is an institution of governing, i.e., a political organization whose main aim is to establish and maintain security, law and order within its geographic jurisdiction. In economics, the state is discussed and perceived as a one size-fit-all institution, one that is and must be similar in Europe, Asia, Africa, and the Americas. The African state, in particular, has been presented as if it is similar to other states, especially in Europe and the United States of America to which it must aspire.

Moreover, the African has been evaluated and judged on the basis of other perceived progressive states, especially those on the western hemisphere. That states are the same is both untrue, misleading, and ahistorical. African states are very different from other states as they are products of conquest, colonialism, genocides, epistemicides and slavery. It was created to support these processes and it still dispenses them mainly through violence. Those who colonised African countries did so not only to access markets and raw materials, but to displace epistemologies and decentre the colonized; and in the process they centered the colonising countries as the centre of knowledge production and essence of humanity. This is the origin of the superiority of liberal economics as the dominant way of understanding and doing economics in Africa.

What is the impact of international economic law on developing countries?

August 20, 2024August 6, 2024 celinetanf8d07c165bLeave a comment

Just as at the time of Bretton Woods, international economic law is essential to discourage destructive national policies. But it is also vital to understand how law, regulations and institutions are located within a longer historical trajectory of colonialism, inequality and exploitation.

The Covid-19 pandemic and the climate crisis demonstrate how the world today is more connected economically, socially, politically and ecologically than at any other point in history.

Actions in one country have impacts, sometimes very serious ones, on the societies, environment and economies of other countries. The globalisation of economic markets and technological change affect how countries, companies and individuals conduct economic exchange, including trade in goods and services, capital investment and financial transfers.

These developments also accelerate the social and environmental costs of transnational economic activity. For example, while products, such as mobile phones, can be used in one part of the world, their production can criss-cross multiple other geographical regions. Similarly, raw materials can be extracted from one country to be manufactured into consumer products in another.

This means that the social or environmental costs of production 鈥� such as low wages, poor health and safety standards and/or air or water pollution 鈥� are not necessarily borne by the countries or communities where the final product is sold and used by consumers.

These changes underscore the critical importance of global collective action and international economic law 鈥� the set of global rules and institutions that regulate transnational economic transactions.

As discussion turns to how international economic law deals with contemporary global problems 鈥� such as managing global supply chains, settling trade disputes, overcoming sovereign debt crises and financing transitions to low-carbon economies 鈥� it is important to consider how the historical legacies of the current system can affect its capacity to do so effectively.

This will enable us to move beyond the economics discipline鈥檚 approach to international law, which is often limited to narrowly measuring the 鈥榚ffect鈥� of different laws and legal institutions on various economic indicators, such as growth, investment and poverty. Taking this approach will enable us to explore how law is itself developed in a colonial and imperial context, which may serve to reproduce and perpetuate colonial harms and exploitation.

On recentring women鈥檚 grassroots struggles to decolonise FinTech narratives

August 7, 2024 serenanatileLeave a comment

Drawing realised by artist Pawel Kuczy艅ski for Serena Natile’s book

I came to the study of fintech as a feminist socio-legal scholar researching the gender dynamics of South-South migration. While doing fieldwork in Kenya for my PhD in 2012, I came across M-Pesa, a mobile money service used by locals as an instrument for transferring money from urban to rural areas. From the start of my research in 2011 to the completion of my PhD in 2016, ongoing studies on M-Pesa were mainly celebratory. It was acclaimed as an innovative instrument for poverty reduction, development, and gender equality and was enthusiastically supported by donors and international financial institutions such as the World Bank and the International Monetary Fund (IMF), as well as by tech entrepreneurs and corporate philanthropy. Its success story was so uncontested that I decided to change my research question to focus on the gender dynamics of digital financial inclusion, rather than on my initial interest, migration.

The key narrative of M-Pesa鈥檚 success in terms of gender equality was, and still is, that it facilitates women鈥檚 access to financial services, providing them with a variety of opportunities to improve their own livelihoods and those of their families, their communities, and ultimately their countries. In the specific case of M-Pesa, a basic-mobile-phone-enabled money transfer service is considered more accessible and available than transferring money via mainstream financial institutions such as banks, and more reliable and secure than informal finance channels such as moneylenders or the handling of cash via rotating credit and savings associations (ROSCAs). This claim is based on three assumptions: first, that women have less access to financial services than men have; second, that women would use their access to finance to support not only themselves but also their families and communities; and third, that digital financial services are better than informal financial channels because they overcome the limits of cash, ensuring traceability and security. These assumptions motivated advocacy and investment in digital financial inclusion projects and the creation of ad hoc programmes and institutions, all strongly focused on the question of how digital technology can be used to facilitate women鈥檚 access to financial services.

Is women鈥檚 access to land path dependent? Evidence from Punjab (Pakistan)

July 10, 2024July 10, 2024 hanazahirLeave a comment

Women have historically been excluded from formal land rights in the Indian subcontinent. For its rural population, land remains the most prevalent and significant asset, making bequests of land parcels the main channel through which women can acquire land (Gazdar, 2003; Nelson, 2011; Agarwal, 1994). Customary land rights prevented inheritance along gendered lines and in colonial times, these laws were codified to prevent the sale and purchase of land parcels (Nelson, 2011). To what extent and how have such gendered patterns of land ownership persisted in different areas of Punjab in Pakistan? To what extent is there path dependence in gendered land ownership? Those are the research questions I鈥檒l tackle in this blog post.

In 2015, the Government of Punjab introduced a series of reforms aimed at enforcing women鈥檚 existing legal land rights in the process of inheritance. One enforcement mechanism introduced was making it the responsibility of local revenue officials to ensure that after the death of a landed individual, each heir would be transferred their inherited share in the land parcel by revenue officials even if the family did not initiate an inheritance mutation process. In addition, paper-based land records originating from the era of British colonial rule were digitized and stored in a central database. The new system made it mandatory to conduct in-person biometric verification of all heirs (male and female) of the deceased for an inheritance mutation case to move forward with the official transfer of land parcels. The introduction of these enforcement mechanisms made an historically exclusive inheritance mutation process more inclusive towards women. But fieldwork suggests that previous patterns of land ownership continue to be repeated in Punjab putting women at a disadvantage. In this blog post I unpack some of these findings, which raise questions about land reform alone as the solution to gendered division of land ownership. Instead, I find that the manner in which old patronage structures interacted with the British colonial system has had lasting implications on the way in which land is distributed.

Combining dependency theory and the regulation school: Understanding economic rents in Burkina Faso

September 4, 2023August 25, 2023 Juliette AlendaLeave a comment

Dependency theory is experiencing some kind of comeback and has been discussed at length on the 51本色 blog. However, one criticism that often comes up when researchers work on the phenomenon of dependency is the fact that the separation between the spheres of periphery and centre may be too simple, insofar as the working class is also exploited in the countries of the centre, and the elite also benefits from such a system in the periphery. While some strands of dependency theory may provide important angles for analysis of trade between the Global North and South, such analysis also risks pitting development in the center against underdevelopment in the periphery. It is worth noting, however, that many dependency theorists did not think of the world in such binary terms, but rather centered class analysis in their frameworks.

In our recent work, we approach the problem of dependence slightly differently in an attempt to nuance our analysis. Dependence is linked to the country’s international insertion, , and is reflected in and unfavourable terms of trade. However, 鈥榙ependent鈥� countries have followed varied trajectories, which need to be analysed in their context, as dependency is not black and white. Let鈥檚 zoom in on West Africa. There, dependency is mainly based on . A rent is defined as obtaining income without contributing to the production of additional goods and services. In a , we have sought to understand a very specific historical case, representing an important rentier economy that was also well integrated into the global economy. We have sought to combine dependency and to understand the stability of such a rentier economy. Let鈥檚 explore the economic history of Burkina Faso.

The evolution of mainstream economics in five political-economic questions

February 26, 2023February 26, 2023 Aabid FirdausiLeave a comment

The trajectory of mainstream economics can be understood in terms of how the discipline historically responded to moments of crises by attempting to 鈥渢heoretically fix鈥� the understandings related to five core 鈥渜uestions鈥� of capitalist political economy 鈥� namely land, trade, labour, state, and legal-institutional framework. This involved legitimising improvements in land that led to the dispossession and the destruction of the commons, justifying free trade based on comparative advantage as opposed to mercantilist state intervention, reducing labour to a factor of production that was supposedly rewarded based on its marginal productivity and hence not being exploited, legitimising state intervention to stabilise capitalism and developing a legal-institutional framework to protect markets from popular democratic pressures. These 鈥渢heoretical fixes鈥� served to ideologically legitimise, preserve, and perpetuate the core content of capitalist social relations even as it corresponded with the modification of the surface-level appearances of capitalism.

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