Saturday, January 16, 2016

Saturday Morning Links

Assorted content for your weekend reading.

- Errol Mendes points out that any commitment to securing human rights in our foreign policy is currently limited by the lack of any systematic attempt to see how those rights are being treated. And Rick Mercer rants about the Libs' gall in misleading Canadians about the sales of arms to tyrants (though his recollection of the election campaign is somewhat off):

- Meanwhile, David Boyd points out that climate change is just another area where an obsession with corporate interests above all else is leading to fundamental values being compromised.

- Daniel Dale documents the callous disregard Michigan's Republican administration has shown toward the people it's poisoned in Flint. And Kristi Tanner takes a look at the devastating long-term public health impacts of a single austerian decision.

- Doug Cuthand points out how Brad Wall is playing politics at the expense of First Nations - though it's worth keeping in mind that voters get the final say in whether that calculation works or not.

- Finally, Dani Rodrik writes about the need to bring public investment back into our discussion about how to build an economy that works for everybody:
The idea that public investment in infrastructure – roads, dams, power plants, and so forth – is an indispensable driver of economic growth has always held powerful sway over the minds of policymakers in poor countries. It also lay behind early development assistance programs following World War II, when the World Bank and bilateral donors funneled resources to newly independent countries to finance large-scale projects. And it motivates the new China-led Asian Infrastructure Investment Bank (AIIB), which aims to fill the region’s supposed $8 trillion infrastructure gap.

But this kind of public-investment-driven growth model – often derisively called “capital fundamentalism” – has long been out of fashion among development experts. Since the 1970s, economists have been advising policymakers to de-emphasize the public sector, physical capital, and infrastructure, and to prioritize private markets, human capital (skills and training), and reforms in governance and institutions. From all appearances, development strategies have been transformed wholesale as a result.

It may be time to reconsider that change. If one looks at the countries that, despite strengthening global economic headwinds, are still growing very rapidly, one will find public investment is doing a lot of the work.
Public investment can enhance an economy’s productivity for a substantial period of time, even a decade or more, as it clearly has done in Ethiopia. It can also catalyze private investment, and there is some evidence that this has happened in India in recent years.

The potential benefits of public investment are not limited to developing countries. In fact, today it may be the advanced economies of North America and Western Europe that stand to gain the most from ramping up domestic public investment. In the aftermath of the great recession, there are many ways in which these economies could put additional public spending to good use: to increase demand and employment, restore crumbling infrastructure, and boost research and development, particularly in green technologies.

Such arguments are typically countered in policy debates by objections related to fiscal balance and macroeconomic stability. But public investment is different from other types of official outlays, such as expenditures on public-sector wages or social transfers. Public investment serves to accumulate assets, rather than consume them. So long as the return on those assets exceeds the cost of funds, public investment in fact strengthens the government’s balance sheet.

No comments:

Post a Comment