Applications for MA Economic and Governmental Reform at the University of Westminster

Here's another reminder about applying and getting funded for the MA Economic and Governmental Reform at the University of Westminster, starting in September.

I teach economics on a Master's course at the University of Westminster in London. The course title is MA Economic and Governmental Reform, and runs from September to September. We are presently recruiting for next year's course.

The course requirements are listed on its website (linked here), although there is some flexibility. Unavoidable ones are:

1. Reasonable English (or things won't make sense)
2. A first degree with some relevance to the topic, or a degree and relevant work experience
3. A job, or potential job, in government (people from NGOs have historically also performed well)
4. Willingness to work hard (or things will not be enjoyable)

African applicants are most welcome and have good performance records. Information on the course and obtaining funding is on the website. The course, like most in the UK, is expensive (£10,000), so students usually have applied for scholarships first. Early application is recommended.

G20 agree large increases to Africa's funding available through IFIs

The G20 group of the world's largest economies have agreed to increase available funding for African states. The increase comes as part of a wider capital expansion for the international financial institutions. The details are in their pdf document here.

The funding will be available through various IMF and African Development Bank routes. The document also says that the review of IMF quotas (and hence voting rights) will be accelerated.

A new reason to be careful when the IMF and WB turn up

Here is the first line of an article from Science Daily:

"A study using functional magnetic resonance imaging (fMRI) shows that expert advice may shut down areas of the brain responsible for decision-making processes, particularly when individuals are trying to evaluate a situation where risk is involved."

The article is here.

World Bank growth estimates have large downwards revision

The World Bank has published its revised estimates of world growth here (then the forecast link for the country tables). Its 2009 estimates have dropped 2.6 percent in five months to a global contraction of 1.7 percent. Sub-Saharan Africa is projected to grow 2.4 percent. The richer countries are predicted to really decline: the US down 2.4 percent, the Euro area down 2.7 percent, and Japan down 5.3 percent.

Increased Chinese influence at the IMF

The IMF is looking for increased funding; its managing director has said here that funds should be at least doubled, with potentially more required. China is probably going to be a major source of finance. How the resulting influence will affect IMF lending practices is unclear. On one hand, the IMF may start lending more to countries with whom China has close foreign policy relations; on the other, there may be the UN security council outcome, where IMF lending to either Western or Chinese clients is subject to veto by the other parties. A third possibility is that much of the lending and conditionalities will not change, as the IMF is influenced in large part by current academic understanding and fashions of development policies. The 1980s Washington Consensus policies did not happen solely because they were perceived by donors to be in their own interests, but also because they had been academic standard in the previous decade (as always, by the time they were implemented, intellectuals had proposed better models).

G20: adjusting propensities to save

The French and German leaders at the G20 summit have called for more financial regulation coordinated globally here; the US president in a news conference with the UK leader was more concerned with the importance of other countries increasing their purchasing power and not relying on his country as the major buyer of goods.

The proposals are different, but one of the major aims is the same for all the leaders. They are concerned with resolving the world's current financial and economic problems. In fact, if we can anticipate the main arguments a little, even the analysis is similar. What underlies the problems is the distribution of purchasing power within and across countries. More financial regulation, if applied uniformly across countries, would presumably lead to more restrained borrowing and higher investment in the US, UK, and other high spenders, while increasing the expenditure in high investment countries such as East Asia. Countries already taking a balanced course on expenditure - that is, countries like France and Germany - would not have to adjust much. By contrast, increased expenditure in countries outside the US and other high spenders would increase demand worldwide while decreasing the availability of funds to US consumers, so increasing their own saving by the market mechanism. The work here would be done by countries outside of the high spenders, primarily.

A third mechanism of adjustment, one which is not proposed by these three countries as far as I know but which has influential academic support, has some elements of both approaches and some entirely distinct ones. It may be considered regulation through the market, allowing banks to go bankrupt so that they adjust their lending practices through fear of the market consequences. Then available funds will reduce in the high spending countries, and their consumers will increase their propensities to save. The approach is attractive in that it does not punish consumers excessively in any country relative to risky, profitable banks, and combines some of the advantages of the other two adjustment procedures, as well as being implementable at a domestic level without international agreements. One problem is that the periodic, genuine bankruptcy of banks is likely to lead to disruption in the real economy.

What I think leaders would really like to do is directly persuade the public in their own and other countries to adjust their spending habits towards capital goods or consumer goods, depending on whether their economies are low or high saving ones. Leaders do not generally criticise the general public, though. Imagine the headlines: "UK Prime Minister turns on 'irresponsible small business people in Vietnam'."

So the arguments are about who should do the work to adjust the economy and incur the adjustment costs. It looks like the sort of solution that could be advanced by intelligent problem solving and willingness to reach a mutually beneficial arrangement. The leaders seem to understand the problems, as in the US President's response to a pertinent question at the press conference yesterday of "whether US consumers should spend more to get out of the recession". The answer was slow, roughly being "spend without fear, but your caution is understandable. Spending in education is one thing you should not be afraid of." The answer, by what it doesn't say, expresses a major problem in the world economy today: boosting consumer spending when one country can no longer achieve the goal on its own.

The G20 arrives in London

Leaders of the G20 group of countries have rolled into London for a major summit, with the economic downturn foremost in the discussions. The leaders arrived and met for the first time yesterday. Last night, they converged in the UK Prime Minister’s house at 10 Downing Street, creating a twenty minute procession of the world’s most powerful figures. Sub-Saharan African leaders were South Africa’s Kgalema Motlanthe and Ethiopia’s Meles Zenawi. Away from the politicians, there were large public protests on multiple environmental and social causes in The City (London’s business district). All in all, an entertaining day. Today, Thursday, the leaders are having their formal summit.

It is actually quiet in London at the moment away from the G20 action.