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Political Economy

Without question, the much-debated, mammoth Belt and Road Initiative (BRI), is a brainchild of China’s President Xi Jinping. Without question, Xi Jinping has further centralised his powers and, in the process, China has turned more authoritarian. Yet, understanding this gigantic infrastructure investment initiative simply as a top-down project, directed by an almighty leadership in Beijing, is more than questionable. The BRI is open, plural and ever-changing, and, to a large degree what interpreters, Chinese or otherwise, public or private, make of it. Following the pragmatic attitude which has characterised China’s leadership since Deng Xiaoping’s reforms in the 1980s (‘crossing the river by feeling the stones’), Xi Jinping inaugurated the BRI when a great deal of Chinese overseas investments was already …

Crossrail, still trumpeted as the largest construction project in Europe, and once held up as a paragon of a well-run, on-time and on-budget development, is now late and seriously over budget. Praise has been replaced by political infighting as the blame game gets into full swing and warnings that this will further imperil Transport for London’s (TFL) already shaky looking finances. However, hidden beneath the debris of mismanagement is something much worse: the willingness of the British government to plough vast sums into transport in London, whilst simultaneously underfunding transport in the rest of the country. Across the UK public transport has been de-regulated and privatised under policies originating in the 1980s, yet, London is a treated as a special …

Blockchain is an emerging technology that has drawn considerable interest from start-ups, technology developers, financial institutions, governments, and think-tanks. They all identify blockchains as having tremendous potential to bring significant benefits. This technology acts as an electronic ledger and allow transaction to be carried out between parties without interference by third parties like banks. Energy supply firms are also increasingly looking the potential of blockchain technology. Blockchain has emerged at just the right time. Other revolutions within the energy sector – the decentralization of the electrical systems, the development of autonomous electric vehicles and the gradual deregulation of the energy industry – are opening the door to blockchain. By combining blockchain with new paradigms, new consumption models will emerge and …

As Joseph Schumpeter already pointed out in 1942’s Capitalism, Socialism, and Democracy “dealing with capitalism, we are dealing with an evolutionary process.” The question is in what direction is this process heading? Is the rising power and capital accumulation of FAMGA (Facebook, Apple, Microsoft, Google, Amazon) together with advances in block chains and artificial intelligence leading to the concentration of wealth in ever fewer hands, obsolescence of manual labour and even the destruction of capitalism, as Karl Marx believed in the 19th century? Or, do technological progress and innovation lead to reduced inequality and higher prosperity? Before talking about the future, its key to review the past of capitalism. Technological progress during the Industrial Revolution of the late 18th and early …

In a new article for Foreign Affairs, I discuss the perils of Angola’s reliance on declining oil revenues. Here are the first few paragraphs.  In early 2014, Angola, sub-Saharan Africa’s second-largest oil producer and third-largest economy, was flush with cash and confidence. The economy had expanded tenfold over the previous decade, and the government, which in 2002 won a resounding victory in the country’s long civil war, was unchallenged at home, a towering presence in regional politics, and a major investor abroad, including in Portugal, the former colonial power. Its national reconstruction agenda funneled tens of billions of dollars into infrastructure and transformed Luanda into a would-be African Dubai that attracted thousands of expatriates. The rule of Angolan President José Eduardo …
Photo credit: R/DV/RS (Creative Commons)

Complex situations often require us to take a step back for what consultants call the 10,000 feet view. The problems facing the EU these days—from Grexit to Brexit—surely seem impenetrable. A convoluted potpourri of economic, financial, and political crises leaves most observers either completely disengaged or increasingly reliant on their gut feelings. To wrap one’s head around the forces that threaten the European project, it helps to think in very simple categories: exit, voice, and loyalty. Few theories still prompt real-life insights almost half a century after their publication. Albert O. Hirschman’s “Exit, Voice, and Loyalty” surely falls into this category. Put simply, Hirschman postulated that members who are unsatisfied with an organisation they are part of, can either exit …

In this Q&A, I discuss the prospects for ‘unfreezing’ the draft new constitution with Hordur Torfason, the award-winning human rights activist credited with starting Iceland’s ‘pots and pans revolution’. You’re credited as the person who started the “pots and pans revolution” in Iceland. How did the protests start? I’m 70 years old this year. I started becoming an activist around 20 years old. Not that I wanted to become an activist, not at all. But I’m gay and it tells you a story that I’m the first gay man in the history of Iceland who steps forward. When I was 30 years old I was very famous. Everybody knew my song. I was on television, radio, doing concerts, LPs. I was …

Ending what has been a tumultuous six-month long negotiation process, last week the Greek Parliament approved the first package of austerity measures required by Greece’s creditors as part of the “Greekment” reached in the early morning hours of 13 July 2015 in order to initiate talks on a Third Fiscal Adjustment Programme (or “Memorandum”) and avoid Greece’s expulsion from the Eurozone. According to early reports, this Memorandum cover the Greece’s financing needs for the next three years, but will require the harshest set of austerity measures of the three fiscal adjustment programmes to date. In this first package alone, the Greek government is obliged to implement tax increases and pension cuts totalling approximately 2% of GDP, while future austerity measures …