Capital Destruction, Optimal Defense and Economic Growth

The effects of capital destruction are endogenized in a neoclassical growth model where the economy can optimally allocate part of its labor force to defend capital from being destroyed. The purpose is to explain the optimal allocation of the labor force between productive and deterrence activities along the optimal growth path in response to exogenous terrorist attacks against the material wealth of the economy. The article makes special case to the recent Colombian case and sheds some light on the dramatic increase in the defense activities in Colombia as a result of the increase of terrorist attacks by rebeld groups.Capital accumulation, deterrence, capital destruction and economic growth.

End of a Faustian pact: Workfare and riots

During the past three decades, politicians struck a Faustian pact. In return for ‘labour market flexibility’, government would top up declining wages through subsidies and tax credits and redirect social protection from an emphasis on social solidarity and social insurance to means-tested social assistance. In the aftermath of rioting, they must now face the following fact: it is the economic policies they have supported that are a major cause of the underlying malaise. If they do not, they will find themselves acceding to an increasingly coercive and punitive social policy, epitomised by workfare and the vogue term of ‘conditional welfare’. Politicians must step back from the utilitarian direction in which they have taken us during the past thirty years and consider an alternative road

Building new frontiers: An ecosystemic approach to development, culture, education, environment and quality of life

Quality of life, natural and man-made environments, physical, social and mental well-being are currently undermined by all sorts of hazards and injuries; political, economical, social and cultural disarray normalise atrocious behaviours and violence throughout the world. Considering the multiple problems of difficult settlement or solution in our times, current environmental, social, cultural, educational, political and economic policies and practices are examined in view of new paradigms of growth, power, wealth, work and freedom. A multidimensional ecosystemic approach and planning model for the diagnosis and prognosis of quality of life integrate into a dynamic configuration four dimensions of being-in-the- world (intimate, interactive, social and biophysical), as they induce the events (deficits and assets), cope with consequences (desired or undesired) and reorganise for change, enhancing connexions and sealing ruptures. Development and evaluation of teaching programmes, research projects and public policies benefit from a deep understanding of the events, providing a critical comprehensive four-dimensional framework and planning model for effective and responsible action.education; culture; public policies; environment; ecosystems

Taming the Floods: Using an Intellectual History of Chinese Hydraulic Thought to Address Contemporary Issues in China’s Water Governance

China’s current hydraulic systems are in a state of atrophy, caused by sustained damage over centuries to infrastructure that has changed very little. Added to an already weak infrastructure is a relatively new crisis of water scarcity, which is forcing the Chinese government to allocate water resources between industry, agriculture, and people. As a state accustomed to water control without the context of scarcity, the state’s current governance structures are ill-equipped to solve the current crisis in sustainable fashion. The state is reluctant to approach non-traditional methods of water governance, and this resistance can be attributed to over two-thousand years of state authority over water control. This paper seeks to pose a challenge to the existing perception of modernism in Chinese hydraulic thought

The urban component of the energy crisis

The spiral of higher oil prices that is occurring currently is mostly caused not by the lack of reserves, but by increasing demand on the existing supply. However, increase of supply would only temporarily attenuate the issue, as demand is expected to continue to soar and eventually outstrip the reserves of fossil fuels, which combined account of almost all our present energy sources. It is not that fossil fuels will disappear, but rather the certainty that they will become progressively scarcer and definitely more expensive as time goes by, has become an irreversible and well established trend. The cost increase of a critical resource - energy - will force unforeseen changes in production and in distribution of goods, affecting the whole productive matrix - including employment. Not only new products and distribution systems based on higher energy costs will need to be conceived and implemented but especially the current reliance on fossil fuels - oil, gas and coal - will need to be replaced almost entirely by sustainable sources - an extraordinarily complex enterprise that should consume our efforts in the next 40 years. Energy consumption will be further aggravated by the expected 2.3 billion population increase from now to 2050, which is expected to be almost entirely concentrated in the urban centres of Asia, Latin America and Africa. Since these additional urban spaces are still to be developed, urban development strategies that consider higher energy costs could effectively alleviate the transition period from fossil fuels to sustainable sources. Rather than providing a recipe for urban planning, this paper stresses the need for further research to incorporate the energy cost component with the urban development context and the dissemination of information on this matter.energy; environment; urban; development; planning;

Operationalising Senian capability approach by modelling human development

Abstract: In this paper we model sustainable human development as intended in Sen’s capability approach in a system dynamic framework. Our purpose is to verify the variations over time of some achieved functionings, due to structural dynamics and to variations of the institutional setting and instrumental freedoms (IF Vortex). The model is composed of two sections. The ‘Left Side’ one points out the ‘demand’ for functionings in an ideal world situation. The real world one, on the ‘Right Side’ indicates the ‘supply’ of functionings that the socio-economic system is able to provide individuals with. The general model, specifically tailored for Italy, can be simulated over desired time horizons: for each time period, we carry out a comparison between ideal world and real world functionings. On the basis of their distances, the model simulates some responses of decision makers. These responses, in turn influenced by institutions and instrumental freedoms, ultimately affect the dynamics of real world functionings, i.e. of sustainable human development.Capabilities; Instrumental Freedoms; Sustainable Human Development

No. 70: International Migrants and Refugees in Cape Town’s Informal Economy

This report is the most comprehensive study yet of the contribution of migrant and refugee entrepreneurs to Cape Town’s local economy. The survey of over 500 entrepreneurs engaged in trade, services and manufacturing in different areas of the city dispels some of the more prevalent myths that often attach to the activities of migrants. The vast majority are not “illegal foreigners”, but have a legal right to be in South Africa and to run a business. Most are highly motivated individuals who enter the informal economy to earn revenue to support themselves, their families, and because they have a strong entrepreneurial motivation. Contrary to the claims of South African competitors, the vast majority are not successful because they are engaged in shadowy business practices. What emerges from the survey is that while migrant entrepreneurs undoubtedly have strong social networks, their businesses are highly individualistic in terms of organization, ownership and activity in a competitive business environment. This report demonstrates their positive economic contributions to Cape Town and examines the challenges they face in running a successful business operation in the city. It goes beyond the rhetoric of inclusion to demonstrate with hard evidence exactly why migrant and refugee entrepreneurs should be accepted as an integral and valuable part of the local economy

Spending to save: Is conflict prevention cost-effective.

YesThe objective of this study is to provide an evidence base concerning the costs and benefits of conflict prevention (CP) activities (defined as those activities undertaken primarily to reduce the risk of conflict), compared with those of engaging after large-scale conflict has begun