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Economists generally accept the proposition that high and volatile inflation rates generate inefficiencies that reduce society’s welfare. Furthermore studies have shown that inflation is harmful to economic growth. However determining the causes of the worldwide diversity of inflationary experiences is an important challenge not yet satisfactorily confronted by the profession. Based on a broad dataset covering over 100 countries for the period 1975-1997 and using dynamic and static panel data econometric techniques, this paper shows that a higher degree of political instability is associated with both higher inflation levels and volatility. Not only does this paper advance the political economy literature establishing a relationship between inflation moments and political instability, but it also has important policy implications regarding the optimal design of inflation stabilization programs and of the institutions favorable to price stability.

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The main point of this paper is that foreign aid fails because the structure of its incentives resembles that of central planning. Aid is not only ineffective, it is arguably counterproductive. Contrary to business firms that are paid by those they are supposed to serve (customers), aid agencies are paid by tax payers of developed countries and not by those they serve. This inverse structure of incentives breaks the stream of pressure that exists on the commercial market. It also creates larger loopholes in the principle-agent relationship on each point along the chain of aid delivery. Both factors enhance corruption, moral hazard and negative selection. Instead of promoting development, aid extends the life of bad institutions and those in power. Proposals to reform foreign aid – like aid privatization and aid conditionality – do not change the existing structure of the incentives in aid delivery, and their implementation may just slightly improve aid efficacy. Larger improvement is not possible. For that reason, foreign aid will continue to be a waste of resources, probably serving some objectives different to those that are usually mentioned, like recipient’s development poverty reduction and pain relief.

Article Abrstract:

Nous présentons la thèse de Feldstein-Horioka (F-H) sur la mobilité du capital et les développements qu’elle a suscités. Il s’agit d’une thèse qui est très ouverte à la possibilité de réfutation et dont l’histoire illustre bien la pensée méthodologique nonnaïve de Karl Popper: les discussions sur sa réfutation, en parallèle avec les tentatives de consolidation ("d’immunisation"), au sens de K. Popper, ont conduit à de nouvelles lectures sur la mobilité du capital. Ces efforts de consolidation (d’ "immunization") ont conduit cette thèse à intégrer des nouvelles méthodologies économétriques et à changer partiellement son objet, en mesurant aussi la soutenabilité externe. La thèse de F-H constitue un cas exemplaire d’intégration de l’analyse théorique et d’analyse empirique.

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Le but de cet article est de tester l’hypothèse de convergence réelle au sein de l’Europe-24 à la lumière de l’économétrie des données de panel hétérogènes nonstationnaires. Nous employons pour cela une approche en termes de persistance des écarts des revenus par tête au sein de l’Europe élargie vers l’Est. Les tests de racine unitaire en panel permettent de conclure à l’absence de la persistance des écarts de richesse dans le temps. A l’aide de l’approche par la cointégration en panel, nous cherchons alors à identifier les variables de "contrôle" de la convergence réelle entre les Etats membres de l’UE.

Article Abrstract:

Comparison of levels of development among countries is usually done by reducing values in national currencies with a common denominator, using the official exchange rate. Because of its unreality, the values calculated in this way do not illustrate real relations between compared countries. That brings about the launching of the UN International Comparison Project (latter Programme) with two fold aims: developing a method for international comparison of real domestic product which could be applied to a number of very heterogeneous countries, and the comparison of growing number of very different countries. Until now six phases of comparisons are finished. Taking into consideration problems that appeared in the realization of the VI ICP phase as well as quality improvement proposals, a decision has been made to launch a new, global round for 2003-2006. Comparison will cover 150 countries (the widest coverage ever). This will give global character to the comparison, which was the end cause of the ICP.

Article Abrstract:

In reality privatization has never occurred according to the handbook rules of ordinary market transactions. Not even in advanced market economies can privatization transactions be described by the Walrasian or Arrowian, or Leontiefian equilibrium models, or by the equilibrium models of the game theory. In these economies transactions of privatization take place in a fairly organic way – which means that those are driven by the dominance of private property rights and in a market economy. But despite this fact Western privatization also some peculiar features as compared to ordinary company takeovers, since the state as the seller may pursue non – economic goals. Changes in the dominant form of property change positions and status of many individuals and groups in the society. That’s why privatization can even less be explained by ordinary market mechanisms in transition countries where privatizing state-owned property have happened in a mass scale and where markets and private property rights weren't established at the time process of privatization began. In this paper I’ll discuss and analyze the phenomenon of privatization in context of different economic theories arguing that empirical results go in favor of the public choice theory (Buchanan, 1978), theory of "economic constitution" (Brennan and Buchanan 1985), (Buchanan and Tullock, 1989), and theory of "collective action" (Olson, 1982). These theories argues that transition from one economic system into another, for example transition from collectivistic, socialistic system into capitalism and free market economy with dominant private property, will not happen through isolated changes of only few economic institutions, no matter how deep that changes would be. In other words privatization can not give results if it's not followed by comprehensive change of economic system because privatized companied wouldn't be able to operate in old environment.

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