Development Blogs.com

The Cato Institute held an interesting event today, “How Nations Prosper: Economic Freedom and Doing Business around the World,” featuring James Gwartney and Robert Lawson, co-authors of the Economic Freedom of the World Annual Report (co-published by Fraser Institute and Cato Institute) and Simeon Djankov, creator of the World Bank’s Doing Business report. The first two speakers focused on analyzing the implications of the 2008 edition of the Economic Freedom report and its historical trends. The findings clearly demonstrate the connection between economic freedom and greater prosperity. Private investment as a share of GDP is higher in countries with more economic freedom. In turn, investment increases long-term economic growth rates, and sustained growth over time leads to...

With inflation and political backtracking competing with trends of economic growth in the Middle East and North Africa, the link between economic and political reform has increasingly come under scrutiny in the region.  It was a prevailing theme in the recent roundtable that CIPE held for key partners from Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, Tunisia, Turkey, and Yemen in Hammamet, Tunisia. Leading private sector organizations from around the region shared successful reform approaches, focusing on entrepreneurship, advocacy, public-private dialogue, and corporate governance.  Many of these programs underscore the need for institutions that promote better economic policies and expand growth dividends across a broader segment of society.  It was interesting to see partners not...

With the world’s eye squarely focused on Iraq, much less attention is being paid to the challenges – and opportunities – for democratic and market reform elsewhere in the Middle East. Yemen, for instance, has recently come into the media focus because of an attempted Al-Qaida attack against the U.S. embassy that injured 13 students leaving a nearby school. But the domestic context of this attack remains poorly understood. Yemen has an important choice to make. If the entrenched disfunctionalities in its political and economic systems persist, it will be headed toward anarchy or even a failed state. But if reforms continue, it may well become a regional example of progress in building democratic and market institutions. Yemen is facing significant internal security problems...

Every country in the need of economic reform faces the same conundrum: if there is a broad consensus among experts on the direction such reforms should take and if we know what reforms have proven successful elsewhere, why don’t they just spread from country to country? Johnny Munkhammar, Senior Fellow at the European Enterprise Institute, talks about this issue and explores the reasons for political resistance to market reforms in his book The Guide to Reform. The concern all reformist governments have was well captured by Jan-Claude Juncker, the prime minister of Luxembourg, whom Munkhammar quotes: “We all know what to do, but we don’t know how to get re-elected once we have done it.” Although Munkhammar’s analysis is focused on the OECD countries, it is applicable...

As I was reading the news pouring out of Burma this morning, a BBC article caught my eye… should we be referring to Burma or Myanmar when we speak of the loud calls for democratic reform coming out of the protests in Southeast Asia? While Myanmar is the country’s official name, says the BBC, Burma is its traditional name and that used by the democratic opposition and other states (like the United States and the UK) that do not support the incumbent military regime. While both names are accepted internationally, a speaker’s choice of Burma or Myanmar can sometimes indicate a political position. This got me thinking. Here at CIPE, we try to be very careful with words – even seemingly small subtleties of meaning can imply hugely different things. Oversight and overlook can make for...

In this interesting piece, UPI energy correspondent Derek Sands suggests that the high price of oil over the past decade has prevented the oil rich governments of the Middle East from making any substantial economic reforms.  Further, Mr. Sands contends that huge state subsidies on products from gasoline to bread can not continue to be supported, even with the current high price of oil.  Iran, for example, continues to heavily subsidize gasoline, but due to a lack of refining capacity, the country is forced to import gasoline refined elsewhere, which costs the government $2.5 billion a year. However, a recent report from the World Bank finds that oil-rich Middle Eastern states are, “…increasingly turning finite oil wealth into longer-term revenue...