Base Realignment and Closure: Guiding Principles for Peru

In this paper, we examine the prospects for base realignment and closure in Peru and develop an initial strategy for the realignment and closure process. While previous research has focused primarily on the realignment and closure process in developed countries, we instead focus on the need for the realignment and closure process to complement the government’s objectives of democratic governance and economic growth. Given concerns about the reemergence of internal threats, most notably the Shining Path, and significant constraints on public finances, realignment and closure may have to proceed at a significant pace in the near term. We argue that transparency, accountability, and improved civil-military relations should not be sacrificed for the sake of expediency.Base Realignment and Closure, Peru, Defense Spending

Are Errors in Official U.S. Budget Receipts Forecasts Just Noise?

Existing evidence suggests that U.S. Government budget receipts forecasts are unbiased and efficient. Our study is an attempt to examine the veracity of these findings. The time series framework employed in this study is distinguished from previous work in three ways. First, we build a model that explicitly admits serial correlation in the residuals by allowing for autoregressive, moving-average, serial correlation. Second, we employ the nonparametric Monte-Carlo bootstrap to free ourselves from reliance on asymptotic distribution theory which is suspect given the short data series available for this study. Third, we control for errors in the macroeconomic and financial assumptions used to produce the U.S. Government's budget forecasts. We find that the U.S. Government's annual, one-year ahead, budget receipts forecasts for fiscal years 1963 through 2003 are biased and inefficient. In addition, we find that these forecasts exhibit serial correlation in their errors and thus do not efficiently exploit all available information. Finally, we find evidence that is consistent with strategic bias that may reflect the political goals of the Administration in power. Working Paper 07-2

Fiscal decentralization, macrostability and growth

This paper examines how fiscal decentralization may influence economic growth. Previous research on this question has primarily focused on the potential direct relationship between decentralization and growth. In this paper, we also examine the potential indirect influence of decentralization on growth through its impact on macroeconomic stability. We find that decentralization may positively influence price stability in developed countries, though this impact is much less clear in developing and transitional countries. We also find some evidence suggesting that decentralization may directly and negatively affect economic growth in higher-income countries but that this effect is reduced through the indirect positive impact of decentralization on growth through macroeconomic stability.Fiscal Decentralization, Economic Growth, and Macroeconomic Stability.

THE HIDDEN INEQUALITY IN SOCIALISM

In the same time period over which the former socialist countries of Eastern Europe and Central Asia became freer, measured inequality of income for those countries increased. Researchers linked the increase to the egalitarian values of socialism and to the process of economic and political liberalization. We question that link, because we question whether socialism was egalitarian. The inequalities in socialism were hidden but, nevertheless, were real.Transition, Inequality, Socialism, Measurement

Reconstruction, the long tail and decentralization: an application to Iraq and Afghanistan

The article of record as published may be found at http://dx.doi.org/10.1080/09592310701674234In this paper, we examine the current state of knowledge in the economics literature on the conduct of reconstruction activities in Iraq and Afghanistan. As stabilisation and reconstruction missions grow in importance for units deployed to these regions, it becomes more important to understand what activities can promote economic growth at the local level. While military operations focus on interdicting the insurgency, successful counter-insurgency campaigns have typically addressed the conditions conducive to the insurgency. Mitigating the incentives for individuals to participate in an insurgency is imperative. Well-crafted and timed reconstruction activities can, we argue, attenuate these incentives

Human Capital, Natural Resource Scarcity and the Rwandan Genocide

DRMI Working Paper SeriesThe series is intended to convey the preliminary results of [DRMI] ongoing research. The research described in these papers is preliminary and has not completed the usual review process for Institute publications. We welcome feedback from readers and encourage you to convey your comments and criticisms directly to the authors

Democratization and Civil War

Draft 6/4/2013This paper examines the impact of civil war on democracy. Drawing from the literature on war and democracy, we investigate the impact of prolonged violence, war termination, rebel victory, and international intervention on democratization. Using an unbalanced panel data set of 96 countries covering a 34-year period, our analysis suggests that civil war lowers democratization in the succeeding period. Our findings suggest that United Nations intervention increases democratization, as do wars ending in stalemates. However, wars ending in rebel victories seem to reduce democracy. These findings appear robust to conditioning, different instrument sets, and the measurement of democracy

Latin America and the Debate Over Environmental Protection and National Security

DRMI Working Paper SeriesThe series is intended to convey the preliminary results of [DRMI] ongoing research. The research described in these papers is preliminary and has not completed the usual review process for Institute publications. We welcome feedback from readers and encourage you to convey your comments and criticisms directly to the authors

Fiscal Decentralization, Macrostability, and Growth

This paper examines how fiscal decentralization may influence economic growth. Previous research on this question has primarily focused on the potential direct relationship between decentralization and growth. In this paper, we also examine the potential indirect influence of decentralization on growth through its impact on macroeconomic stability. We find that decentralization may positively influence price stability in developed countries, though this impact is much less clear in developing and transitional countries. We also find some evidence suggesting that decentralization may directly and negatively affect economic growth in higher-income countries but that this effect is reduced through the indirect positive impact of decentralization on growth through macroeconomic stability