Half a century of development economics : a review based on the"Handbook of Development Economics"

Development economics has made remarkable progress in 50 years, says the author, summarizing changes in the field since Nehru's first proposals for an independent India. Synthesizing insights about changes in the field from the many contributors to the"Handbook of Development Economics,"the author observes (among other things): 1) Different schools of thought may dominate, but the range of research has broadened. Economics has"hardened"as its practitioners have learned to use data more carefully and to reason more rigorously. 2) The policy message has been turned upside down. Gone is the idea that development is industrialization and that the main policy problem is to manage the interface between country and city. Today urbanization and industrialization are viewed as mere components of an integrated transformation, in which the expansion of foreign trade is central. Traditional institutions are viewed with far more understanding, because overhasty modernization has often proved counterproductive. 3) More than ever, development is seen as a"whole replacement"process, the key to which is mastery of Northern technology--now understood to be both simpler and more complex than previously thought. Simpler, because much technology is uncomplicated, and complex because even simple technology requires ingenuity and a costly investment in adaptations. 4) There has been a radical change in economists'view of market agents and policymakers. Gone are the days when economists thought their advice should be aimed mainly at planners. Policymakers are utility maximizers, too. Employees of state enterprises coalesce into powerful interest groups that block efforts to raise productivity. The new thinking is sometimes modified by evoking the vague concept of"governance,"under which the economist's view is to help design a system of interacting state and private institutions that, led by the state, cooperate in achieving social goals. Whether something useful will come from this line of thinking remains to be seen. The author detects major gaps in economists'undrstanding of development, suggesting a particular need for further study of collective action (a far more pervasive component of human action than is realized) and the selection of roles by individuals and the costly investment this entails (a concept that may shed light on Schumpeter's well-known but little-studied entrepreneur).Labor Policies,Economic Theory&Research,Health Economics&Finance,Environmental Economics&Policies,Decentralization,Health Economics&Finance,Poverty Assessment,Achieving Shared Growth,Economic Theory&Research,Environmental Economics&Policies

File-Sharing, Sampling, and Music Distribution

The use of file-sharing technologies, so-called Peer-to-Peer (P2P) networks, to copy music files has become common since the arrival of Napster. P2P networks may actually improve the matching between products and buyers - we call this the matching effect. For a label the downside of P2P networks is that consumers receive a copy which, although it is an imperfect substitute to the original, may reduce their willingness-to-pay for the original - we call this the competition effect. We show that the matching effect may dominate so that a label’s profits are higher with P2P networks than without. Furthermore, we show that the existence of P2P networks may alter the standard business model: sampling may replace costly marketing and promotion. This may allow labels to increase profits in spite of lower revenues

Meeting Competition: Why it is not an Abuse under Article 82. Research Papers in Law, 3/2004.

Introduction. Meeting competition occurs when an undertaking lowers its prices in response to the entry of a competitor. Despite accepting that meeting competition can be compatible with Article 82, the Commission2 and the Court of justice3 have repeatedly condemned the practice due to the modalities of implementation or “particular circumstances”.4 However, existing precedent on the subject remains obscurely reasoned and contradictory, such that it is at the present time impossible to give clear advice to undertakings on the circumstances in which meeting competition is compatible with Article 82. Not only is such legal uncertainty in itself damaging but, in so far as it discourages meeting competition, it appears to us to be harmful to competition. As concerns the latter point, it will be seen that some of the most powerful arguments against prohibiting meeting competition are based on the counterproductive nature of the remedies. The present article does not, however, aim to propose a simple solution to distinguish abusive and non-abusive meeting competition.5 Nor does the article aim to give a comprehensive overview of the existing case law in this area.6 Instead, it takes a more economic approach and aims to lay out in a (brief but) systematic fashion the competitive concerns that might potentially be raised by the practice of meeting competition and in doing so to try to identify the main flaws in the Court and Commission’s approach

2+12+1 Covariant Lattice Theory and t'Hooft's Formulation

We show that 't Hooft's representation of (2+1)-dimensional gravity in terms of flat polygonal tiles is closely related to a gauge-fixed version of the covariant Hamiltonian lattice theory. 't Hooft's gauge is remarkable in that it leads to a Hamiltonian which is a linear sum of vertex Hamiltonians, each of which is defined modulo $2 \pi$. A cyclic Hamiltonian implies that ``time'' is quantized. However, it turns out that this Hamiltonian is {\it constrained}. If one chooses an internal time and solves this constraint for the ``physical Hamiltonian'', the result is not a cyclic function. Even if one quantizes {\it a la Dirac}, the ``internal time'' observable does not acquire a discrete spectrum. We also show that in Euclidean 3-d lattice gravity, ``space'' can be either discrete or continuous depending on the choice of quantization. Finally, we propose a generalization of 't Hooft's gauge for Hamiltonian lattice formulations of topological gravity dimension 4.Comment: 10 pages of text. One figure available from J.A. Zapata upon reques

An Economist's Guide to Digital Music

In this guide, we discuss the impact of digitalization on the music industry. We rely on market and survey data at the international level as well as expert statements from the industry. The guide investigates recent developments in legal and technological protection of digital music and describes new business models as well as consumers' attitude towards music downloads. We conclude the guide by a discussion of the evolution of the music industry