Last week, Foreign Policy and the Fund for Peace released their annual ranking of the world’s failed states. The list is based on indicators of 12 different measures of state failure, ranging across social, economic, political, and military factors. This year 34 countries fall into the “Alert” category, denoting those in the worst shape. Somalia and DRC lead the way; the bottom five countries are all in sub-Saharan Africa. What I think is most interesting about this year’s list is the fact that 12 of the “Alert” states – over a third – are middle-income countries. This is a new high, and indeed the emergence of failed middle income states is a relatively new phenomenon; back in 2006 there were only …

Much to Angela Merkel’s chagrin, international political momentum seems to have swung rather decidedly from ‘austerity’ to ‘growth’. The transformation had been underway for some time – playing out in debates across the economics blogosphere – but the elections in France and Greece clearly accelerated this evolution. The recent G8 summit communiqué – which leads with the phrase “Our imperative is to promote growth and jobs” – epitomizes the shift. In terms of our collective understanding of economics and how to fight recessions, I think there’s actually a lot less here than meets the eye, and indeed a lot of rather meaningless talk. To begin with, as Tyler Cowen has pointed out, ‘austerity’ means many different things to different people, and …

I’ve been neglecting my blogging duties of late as I’ve been preoccupied studying for an exam on International Relations theory and history. With the exam safely behind me I’m back to blogging, but still have academic IR debates on the mind, so today I want to write about what the history of early 20th century European relations can tell us about the continent’s current political economy. To grossly oversimplify, back in the pre-WWI days Europe was controlled by a number of Great Powers of roughly equal strength, who were in continual competition with one another to run the world. They typically pursued their goals by forming loose and shifting alliances; whenever any one state seemed to be getting too strong, …

Last week the World Bank released a massive 400-page report, China 2030, outlining a vision for reforming the country’s economy over the next two decades to ensure continued success. As is typical in these kinds of reports, the main findings are completely reasonable if not exactly ground-breaking: China needs to increase the share of consumption in its economy, lessen the grip of state-owned enterprises, move toward letting the market more accurately price energy and capital, deal more seriously with environmental degradation, and just generally become a more market-oriented economy.  All of which makes perfect sense, and indeed very sensible people have been suggesting more or less this same package of reforms for several years now. But this is all easier …

I didn’t think it was possible, but the situation between the Greeks and the Germans just grew considerably more ridiculous. German finance minister Wolfgang Schäuble said in a radio interview that the Greeks should postpone national elections planned for April and instead adopt a technocratic government that leaves out the country’s major political parties (h/t Tyler Cowen, who correctly files this under ‘Department of Yikes’, and it’s worth noting that the Finns and the Netherlands are also apparently on board with the German plan). Wow. Due to the Eurozone crisis a lot of things which would have seemed unthinkable a few years ago are now plausible, but even by our new 2012 standards this is just insane. Suffice it to …

Taking a step back from the immediate uncertainty over Greece (see here for the latest updates), I’m struck by how similar the situation is to those created by the old 1980s/1990s IMF and World Bank Structural Adjustment Programmes (SAPs). Reading accounts of the negotiations (especially a story in today’s New York Times about how the Germans, IMF, and ECB don’t trust the Greeks), you could rather easily replace “Greece” with “Nigeria” or “Senegal” and be transported 20 years back in time. We can go down the similarity-list. An urgent need for new official lending to roll over past debts? Tick. Tough loan conditionality attached? Tick. Domestic pushback and questionable democratic legitimacy? Tick. Of course, it’s all playing out more publicly/more quickly …