The Class Content of Preferences Towards Anti-Inflation and Anti Unemployment Policies

This paper assesses class based preferences towards anti-inflationary and anti-unemployment policy. Using a consistent cross-country social survey, I find that the working class broadly defined, and those with lower occupational skill and status are more likely to prioritize combating unemployment rather than inflation. The result is robust to the inclusion of several plausible controls. The idea that the working class is less ‘relatively inflation averse’ is consistent with earlier predictions coming from large body of political economy research in the 1970s. The finding that inflation and unemployment aversion have a distinct class character has implications for current debates on the implications of macroeconomic policies such as inflation targeting..Inflation; Unemployment; Social surveys, Radical Political Economy

Global Governance and Human Development: Promoting Democratic Accountability and Institutional Experimentation

This paper seeks to critically examine recent debates on global governance, albeit from a human development perspective. In doing so it identifies and describes two important principles for building institutions for the advancing of human development: what may be termed the imperative of democratic accountability (most closely associated with the work of Amartya Sen) and the imperative of institutional experimentation (which has been theorized most extensively by Roberto Unger). The paper discusses these two principles in light of some of the major challenges that can and do affect the international community as a whole. It reviews some of the decentralized forms of governance which are evolving as developing countries assert themselves in debates on institutional organization. It then focuses more extensively on the global financial crisis as a case study in the inadequacies of current global governance. Finally, it uses the two imperatives mentioned to review the lessons that the crisis has provided, before describing specific proposals to redesign systems of global economic governance. Chief among these are the reforms advocated by the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System.Human Development, Economic Development, Inequality, Human Rights, Capabilities, Health, Governance

Estimating Guard Labor

As a background paper to Jayadev and Bowles (2006), this paper provides details on our measure of guard labor as we measure these in labor units. Data from the United States indicate a significant increase in its extent in the U.S. over the period 1890 to the present. Cross-national comparisons show a significant statistical association between income inequality and the fraction of the labor force that is constituted by guard labor, as well as with measures of political legitimacy (inversely) and political conflict.Incomplete contracts; Property rights; Comparative institutions; Inequality; Guard labor

The Correlates of Rentier Returns in OECD Countries

This paper examines the correlates of rentier returns – returns to the ownership of financial assets – in a sample of OECD countries between 1960 and 2000.�The authors�develop a simple bargaining model among three classes – industrial capitalists, rentiers and workers – and show that rentier income returns increase when domestic and foreign real interest rates rise, costs of capital mobility fall, and the power of labor declines. Using an unbalanced panel dataset, the paper also econometrically investigates the impacts of proxies for these variables on rentier incomes. The authors find that interest rate liberalization, reductions in the unionization rate of labor, and increased returns from foreign financial investments increase rentier returns. These results provide support both for the simple model and for common Post-Keynesian and Marxian stories of the impact of financialization and neo-liberal policy changes on income shares.Rentier, Functional Distribution, Neoliberalism, Financialization

Guard Labor: An Essay in Honor of Pranab Bardhan

For Pranab Bardhan, whose contributions to science and to society are honored in this report, power is an essential analytical tool. Its exercise (for better or worse) redirects the course of development and affects the livelihoods of those whose voices and interests are never absent in Bardhan's work: the world's least well off. This paper explores the economic importance of the exercise of power and the resources devoted to this end.

The Class Content of Preferences Towards Anti-Inflation and Anti Unemployment Policies

This paper assesses class based preferences towards anti-inflationary and anti-unemployment policy. Using a consistent cross-country social survey, I find that the working class broadly defined, and those with lower occupational skill and status are more likely to prioritize combating unemployment rather than inflation. The result is robust to the inclusion of several plausible controls. The idea that the working class is less ‘relatively inflation averse’ is consistent with earlier predictions coming from large body of political economy research in the 1970s. The finding that inflation and unemployment aversion have a distinct class character has implications for current debates on the implications of macroeconomic policies such as inflation targeting

Guard Labor: An Essay in Honor of Pranab Bardhan

We explore the exercise of power in perpetuating status quo institutions. We give empirical examples of the economic importance of power and offer a definition of this elusive term. We then investigate the role of power in a modern capitalist economy, borrowing ideas from the classical economists (unproductive labor, profit-driven investment), Marx (the labor-disciplining effect of unemployment) and the contemporary theory of incomplete contracts(the role of monitoring and enforcement rents). Our model suggests that a significant portion of an economy's productive potential may be devoted to the exercise of power and to the perpetuation of social relationships of domination and subordination. We then measure these resources in labor units using the concept of guard labor, finding it to be a significant and growing fraction of the U.S. labor force. We also document substantial cross national differences in the extent of guard labor and the strong statistical association between the extent of income inequality and the fraction of the labor force that is constituted by guard labor. We close with some speculations concerning the role of guard labor in the process of economic development and how economies might function better with more carrot and less stick.enforcement rents, institutions, guard labor, supervision, social conflict, labor-management

Innovation, Intellectual Property, and Development: A Better Set of Approaches for the 21st Century

This paper aims to provide an intellectual basis to think about the relationship between development, intellectual property and innovation; where we currently are and what alternatives are available. For the most part, we are concerned less with the implications of current IP laws for the advanced countries as we are with their impact on developing countries. We focus here not only on the current pathologies of the system and on potential alternative ways to tackle its most egregious excesses; but on a more positive note, on what kind of "system" would best promote development and well-being in the developing world. We are looking for a world with new and better rules for intellectual property. Just as some have begun to think about re-writing the rules of the American economy to ensure a more just and efficient system, the time is ripe for doing the same for the global economy, especially with regard to the IP system

The Boom Not The Slump: The Right Time For Austerity

Should the United States cut its deficit in the short term? This has been the subject of intense debate among politicians, policy analysts and thinkers over the past year. What are the consequences of cutting the deficit with interest rates low, unemployment high and growth uncertain

Two Ideas to Increase Innovation and Reduce Pharmaceutical Costs and Prices

The pharmaceutical industry is undergoing a period of uncertainty. Profits are being squeezed by increasing costs and competitive pressures, and new drug production is slowing down. This Perspective reviews two policies that could assist in realigning incentives toward genuine innovation while also keeping drug spending growth under check. Value-based pricing can incentivize genuinely new discoveries and align research and development with social welfare. Public funding of clinical trials likewise can reduce both pharmaceutical costs and prices and direct research effort in a manner that is more socially productive than the current state of affairs