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Hi,
This page is mainly devoted to the presentation of my thoughts and writings about Economics, mostly policy relevant economics affecting Economic Development and Poverty. There are two types of entries on this page. One, actual HTML text, allows you to directly read the text, either on this page or via a link. The other is a link to a word processing (MS Word) or Acrobat file (PDF file) which must be downloaded before it is read. In any cases involving links, I provide a short description of the contents of the link. Pictures of my family |
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Links for Literature Searches
Click on the links for very good research engines. USAID Development Clearinghouse Search engine for loads of USAID development documents. World Bank IMF Library To get to the search engine keep clicking on the blue icon of the world with "jolis" written in it. Resources for Economists on the Internet(RFE) This is an incredibly muscular research resource. Research Resources for Social Sciences Craig McKie and McGraw Hill have teamed up to construct this site, also very muscular. Links to other Policy Sites
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Slide Show of Burke Pictures Link to PDF (easily readable & printable) Copy of my CV Robert Myers' Book Review of A Free Nation Deep in Debt: The Financial Roots of Democracy by James Macdonald WALK LIKE AN EGYPTIAN Walking in Cairo, Egypt is an exhilarating adventure which usually ends satisfactorily. It's not to be taken lightly, however. What sets me apart is that I walk alone. Egyptians move in groups or gaggles and primarily use the touch system rather than their eyes and ears to perambulate. Except for collections of sub-teens, who are scurrilous, these groups of walkers are unfailing polite and give way graciously after the requisite number of gentle bumps and touches. Click Here for the Rest |
LINKS TO MY WRITINGS
Revisiting Grinnell for My 40th Reunion Society for International Development Talk on Competition
Myers Missiles LATEST MISSILE
Links to Some of My Notes on Think Tanks (MS Word Files) Link to Adobe
PDF paper, Improving Logical Reasoning in the World Bank.
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A Letter
to Finance & Development About Poverty Reform Strategy Papers (PRSPs)
To the Editor- Finance and Development
August 6, 2002
IMF Room IS7-1100
700 19th St. NW
Washington, DC 20431
Dear Sir/Madam,
Your article ("Taking Stock of Poverty Reduction Efforts," F&D, June 2002) stimulated four of us to gather for lunch to discuss the PRSP experience. Together, we have at least 120 years of experience in Development Economics. We discussed several issues, but the most pressing are the following conceptual ones.
First, PRSPs in their present design put more emphasis on the role of the Government and less on the role of the private sector as the engine to drive the poverty reduction machine through employment creation. Lack of formal sector employment is at the root of poverty in these countries. Only enhanced private sector activity can efficiently alleviate this huge unemployment problem. In addition, enhanced private sector activity will enlarge tax bases, thus providing domestic financing for public sector health, education and social programs aimed at the poor. Without robust formal private sector employment, the true dimensions of the poverty problem can't be tackled.
Second the interrelationships amongst economic, political and social factors, and poverty are too loosely specified. At present it appears that any and all "good" economic, political and social programs/proposals are considered to be poverty alleviating. This leads to an excessively broad agenda and a "flavor of the month" approach to poverty reduction. We feel that the poverty problem must first be defined in the context of full, formal sector employment. Following that, the PRSPs should apply Ockham's Razor and focus on only those few social, political and economic programs/proposals that are of proven significance to poverty alleviation.
Finally, we are concerned
that the assumed involvement of civil society in the preparation of the
PRSP, remains just that—an assumption. Too little attention is focused
on the needed capacity to enable private individuals and groups from civil
society to contribute meaningfully to the PRSP process. Most Africans have
never been asked for their opinion on any subject let alone how to draft
an effective PRSP. Entitling people to confidently speak their minds and
engage in constructive dialogue gets far too little attention from the
Bank, IMF and the respective national governments.
Sincerely,
Mohamed Cassam, Vita C. Nwaneri,
Robert Myers,
Donald R. Sherk
cassamm@aol.com vcnwaneri@yahoo.com
rmyers1@erols.com
donsherk@aol.com
BUSH
GENOA DEVELOPMENT GESTURE: WELL MEANING BUT FLAWED
This is a link
to a Myers Missile about WB grants instead of soft loans. If you click
on it you can read the Missile and the newspaper article on which is is
based.
STRUCTURAL
CONDITIONALITY: THE WRONG FOCUS FOR THE IMF
This is an 11 page MS Word
paper submitted to the IMF Board. They are seeking comments on structural
conditionality (see their web page: http://www.imf.org/external/np/pdr/cond/2001/eng/struct/index.htm).
My position in this paper is that the IMF should not combine lending and
structural conditions. Instead it should lend, possibly large amounts of
money to prevent contagion in those relatively large, internationally integrated
economies that have fairly good policies but experience temporary negative
economic shocks. The IMF should drop its "promote growth" goal and extract
itself from most of the countries it currently has arrangements with. In
addition, until and unless the economically debilitating sovereign debt
overhang problems are overcome through some sort of concerted sovereign
debt bankruptcy exercises, the IMF will be of limited effectiveness.
The Memo About Jeff Sachs & Co. and Sequencing
This is an MS Word document
about the sequencing of structural conditions.
Lending to a Fault (Letter to the Washington Post. Published on p. B6 on January 7,2001)
The Washington Post
Dr. Robert Myers
1150 15th St. NW
3605 Morrison St. NW
Washington, DC 20071
Washington, DC 20015
202-966-6458
rmyers1@erols.com
December 22, 2000
Dear Sir:
James Wolfensohn's
letter Dec. 22 op-ed column was full of disingenuous sentiment and bad
economics. The Bank has been the lead culprit in pushing poor countries
to borrow excessively.
I was the economist at the
World Bank for Nigeria and then Zambia when these countries began their
ruinous borrowing binges. For each, the Bank established enormously high
lending targets and then, through a concept called "burden sharing", convinced
other lenders to pony up three times as much lending so that the Bank's
exposure ratio, or its share of the total debt, would not rise above 25%.
In truth, we were engaged in predatory lending.
Everyone knew that excessive
lending was financing consumption rather than investment, but other lenders
were assured that huge profits per dollar lent, if not loan repayments,
could be financed through additional Bank/IMF lending.
As economists, we did not
then appreciate how socially costly and destructive of development incentives
this process of lending-and-forgiveness is. It essentially subjugates borrowers
and keeps them forever in penury.
Writing off the present
debt simply will enable the Bank to initiate a new lending/forgiving cycle.
Unless the Bank is changed into a much smaller, grant-giving institution,
debt forgiveness, although essential, will fail.
The present World Bank is
desperate to continue excessive lending and will seize on anything, even
Christmas, to be able to continue.
Sincerely, Robert Myers, Washington
Improving
the Development Atmosphere (redrafted on 7/7/2000)
This is an MS Word downloadable 11 page note on
forefront or best practice approaches to improving the development atmosphere.
It contains a section on what I see as future trends in the growth process
and then ten subsections on particular development issues.
Revised Note:
Differences between IDA (Altruistic) and IBRD (Commercial) Lending.
This is an MS Word downloadable 5 pp. note that
sets out some altruistic (very different from the Bank's current practices)
principles for IDA lending.
Comments on the Meltzer Report: Can
Public-Sector Foreign Debt Alleviate Poverty?
Link to
the Meltzer Commission Report
Full 8 Page Text of My Comments in Downloadable MS Word File
Full 8 Page Text of My Comments in Acrobat Reader File
Here is the concluding paragraph of my comments on this important report:
20. IX. CONCLUSIONS. The Meltzer commission makes generally good recommendations,
but vacillates regarding the Bank and does not convincingly support its
recommendations. As a result, the report is likely to have little impact,
even though the IMF and World Bank are in desperate need of refocusing,
reform and, in the case of the Bank, downsizing. Here are the other conclusions.
a. The report should clearly state the importance, to development,
poverty alleviation and stabilization, of growth in private investment,
employment and productivity in a competitive setting. This would enable
it to define steady growth, in these three variables, as the responsibility
of the World Bank. Significant negative departures from the growth trend
of these variables would be the responsibility of the IMF, which would
intervene to mitigate contagion.
b. The commission does not sufficiently stress the fact that
the failures of the IMF and World Bank result from incorrect or inappropriate
volumes, timing or targeting of money flows rather than from poor or inappropriate
policy advice.
c. The report's excellent recommendations that the IMF only
lend for -- and the World Bank not lend for -- crises is nullified by the
absence of any delineation of what is and what is not a crisis.
d. The commission doesn't recommend, as it should, the cessation
of all adjustment or policy-based lending. Adjustment lending is defined
by two characteristics. One is that money flows are not targeted and are
completely fungible. The other is that disbursements are supposedly contingent
upon the adoption of an approved menu of policy reforms. Adjustment lending
should be discontinued because disbursements can't be made contingent on
policy reforms, because the money flows can't be sized and targeted and
because an appropriate policy menu can't be agreed upon.
e. Corruption flourishes when large amounts of money fall into
the hands of people/institutions that are not creditworthy. By not making
this connection and not discussing the relationship between creditworthiness
and World Bank and IMF lending, the commission mishandles the corruption
issue.
f. The commission has, perhaps grudgingly, endorsed more World
Bank lending to alleviate poverty, although with the important proviso
that Bank lending be drastically cut in favor of (much smaller amounts
of) grants. Unfortunately, greater external public sector debt exacerbates
poverty. The commission avoids a discussion of what constitutes poverty
and the role that growth in private sector employment and productivity
in a competitive setting can play in poverty alleviation. As a result,
it fails to direct the Bank on how to correctly size and target grants
to increase employment and productivity, so as to alleviate poverty.
g. Finally there is an issue of how the World Bank might finance
grants. The Meltzer Report is essentially silent on this. A possibility
that is consistent with current practices would be for the World Bank to
reduce costs, increase its investment income and institute differential
interest rate charges so as to accumulate greater earnings or "profits".
If these are complemented with stringent administrative cost controlling
measures, the Bank could well accumulate sufficient annual funds to finance
an appropriate volume of development grants, or directly targeted subsidies.
The World Bank &
Joe Stiglitz VS. Relevance
This is a short note that
compares a paper by Joe Stiglitz with a paper on altruism. The purpose
is to demonstrate the importance of assessing the market and development
impact of World Bank loan transfers rather than just of the policies recommended
along with the loans.
The Importance
of Domestic Debt Rather than Foreign Borrowing
This is a downloadable MS
Word document which argues that developing countries need to have their
own domestic debt (bond) markets. Having such markets will provide good
opportunities for domestic savers and investor and will enormously strengthen
domestic financial markets, thus reducing tendencies for financial instability
and dependence on the world Bank and IMF.
MY E-Mail Entitled,
"Development, Labor Unions & Donor Lending" About James People's Article,
Including the Table.
This is an EM, in readable HTML format, about how
making labor markets more competitive can increase employment and reduce
poverty as long as excessive Donor lending doesn't frustrate attempts to
make factor markets more competitive. It includes a table of empirical
results.
My Letter to the Washington Post,
Published on p. A10 on 1/5/99
To the Editor of the Washington Post
Via E-Mail
December 30, 1998
Dear Sir:
THE IMF DOESN'T REPLY
Vito Tanzi's letter to the
Post, (12/30/98, p. A-18) responding to Carol Welch's very informed letter
condemning the IMF and World Bank (the Post, Letters, 12/8/98) is disingenuous
and in no sense a reply. Carol's points are that ruling cliques, e.g. in
Indonesia and Russia, get billions of dollars of grant-like loans by promising
to undertake hundreds of policy reforms, most of which they repeatedly
ignore. Meanwhile these ruling cliques, who control their economies as
well as their government budgets, spend these billions in ways which worsen
distribution of income (poverty) and environmental problems. Most remarkable,
given economic theory, is that these billions of lending are accompanied
by increases in unemployment. Vito's main defense is that client governments
of the IMF and World Bank sign letters of intent saying they will do whatever
these august institutions want them to do. The fact that poverty, unemployment
and environmental destruction persist, if not increase, leaves Vito to
contend that either the governments repeatedly don't abide by IMF/World
Bank policy prescriptions or that the policy recommendations are wrong.
Vito says, "the allegation [that IMF policies have been an environmental
disaster] is patently untrue." In this he is correct. It is the billions
of dollars of IMF/World Bank lending which is exacerbating environmental,
unemployment and poverty problems in Indonesia and Russia.
Sincerely,
Robert Myers
(Long-time World Bank Employee)
John Cassidy, Keynes, Asia and the IMF
Hi Friends and Colleagues,
October 26, 1998
John Cassidy has a delightful and weighty piece entitled, "The New Economic Disorder" in the Oct. 26 & Nov. 2, 1998 New Yorker. The article is about John Maynard Keynes (JMK), a fascinating person and brilliant economist who was skeptical and disparaging of officialdom, and about the present need for Keynesian endorsed controls on international capital flows to mitigate Asian Contagion. Cassidy concentrates on JMK's financial pronouncements, thereby de-emphasizing Keynes' most important economic policy maxim, to wit: IF IT CAUSES NON-FRICTIONAL UNEMPLOYMENT, IT ISN'T WORKING. Cassidy's article led me to wonder what JMK would propose if he were around today. I think events, particularly relating to World Bank (WB) and IMF behavior, would have strengthened his disrespect of officialdom. I also believe that JMK would have incorporated into his theoretical analysis several advances in the profession, particularly from the field of Industrial Organization, relating to moral hazard, cartel and monopoly behavior and bankruptcy. He also would have observed and pronounced upon an egregious anomaly relating to his General Theory: That low investment and employment problems can be mitigated by government deficits financed domestically, but these problems are worsened at least in the longer- term if the deficits are financed from abroad. JMK would most probably view this failing of the WB/IMF (that the more governments rely on the WB/IMF (Donor) lending, the lower is their formal sector, private employment) as paramount. He would probably have cared relatively less about controls on private capital flows. Instead he would have examined more closely why and how huge amounts of official, concessional (Donor) lending exacerbate moral hazard problems, support destructive cartel or monopoly behavior and bail out large, inefficient enterprises which otherwise should be fragmented via bankruptcy. All of these ultimately reduce formal, private sector employment. I feel that JMK would still recommend government deficits and enhanced liquidity to stimulate investment and employment, when needed. However, he would argue that the deficits be financed via local currency denominated debt issues sold in competitive, mainly domestic markets, rather than via international borrowing, including from the World Bank and IMF.
Near the end of his article, Cassidy says in part, "If the IMF is to become a credible institution, it needs a limited mission (to provide liquidity in international crises, not to act as a nation-builder)...". JMK would agree with both parts of the parenthetical statement, although he would have had to be an extreme insider to understand what it means for Donors to act as nation- builders. However, once understood, I am sure Keynes would have been appalled that nation-building rather than employment is the World Bank's and IMF's (the Donors') goal. He would have been vociferously and effectively against it.
Warm regards, Bob Myers
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