Blending Finance Not SDG Financing Silver Bullet Jomo Kwame Sundaram and Anis Chowdhury

After largely failing to provide 0.7 per cent of their Gross National Income (GNI) in aid to developing countries for almost half a century since making the commitment, donor countries have recently promoted blended finance (BF) as a solution to the financing for development challenge. Blending refers to combining public development funds (in the form of grants, technical assistance or interest indemnification) with loans from private lenders. Following adoption of Agenda 2030 for the Sustainable Development Goals (SDGs), the OECD and the World Economic Forum (WEF) claimed that "blended finance represents an opportunity to drive significant new capital flows into…

Capitalism, Poverty and Praxis Prabhat Patnaik

Capitalism is an economic system driven by its own immanent tendencies, which the State that presides over it normally supports, sustains and accelerates. One such tendency is its encroachment upon the surrounding petty production economy, resulting in an income squeeze upon, or the dispossession of, the petty producers. Dispossession here refers not just to an appropriation gratis of the assets of petty producers; it also includes cases of obtaining such assets at less than “market prices”, and also cases where only certain sections of those engaged in the petty production sector are paid, while others are not, in the process…

Power – The bête noire in much of modern economics Heinz D. Kurz

Despite being a pervasive phenomenon in the economy and society, power has been and still is the bête noire in much of modern economics. In the main parts of contemporary mainstream economics, no attempt is made to come to grips with what power means and what its effects are. Against this backdrop, this paper attempts to bring to the fore ideas of past economists and social and political philosophers, who basically saw socio-economic affairs and outcomes as driven by, and reflecting, power relationships. Starting with the writings of late mercantilist and early classical economists, the paper analyses how the attention…

Leapfrogging into services C. P. Chandrasekhar

By passing full-fledged industrialisation and depending on services for growth is not a bad idea says the International Monetary Fund. In the April 2018 edition of its World Economic Outlook, the IMF has endorsed a trajectory that India is known to have pursued in recent years. Characterised by an unusual process of structural transformation, that trajectory involves an early turn to services when the share of agriculture in aggregate output and employment declines with development. This contrasts with the traditional turn to manufacturing at relatively low levels of per capita income. In an India-type process, services rather than manufacturing would…

The collapse in developing country exports C. P. Chandrasekhar and Jayati Ghosh

If there has been one big change in the nature of the global economy in the second decade of this century, it is in global trade. In the first decade of this century, especially in the period 2002-08, cross-border trade grew much more rapidly than total world output, and the integration of countries through greater exchange of goods and services essentially became the primary engine of growth. It is true that the explosion of financial activity that has become such a prominent feature of contemporary capitalism also added substantially to income growth – and indeed generated the bubbles that were…

Trump’s Trade War C. P. Chandrasekhar

After a year of huffing and puffing, President Donald Trump has launched, since January this year, what some are terming a trade war—fought in scattered industrial and selected locations. It started with quotas and tariffs on solar panel and washing machine imports, but then moved menacingly to steel and aluminium. Tariffs on these two products have been imposed under a WTO clause relating to imports that threaten national security, even while Trump’s rhetoric refers to competition from "cheap metal that is subsidized by foreign countries", which amounts to a completely different ‘dumping’ charge. With the tariff hike on steel at…

A Tale of Two Discourses Prabhat Patnaik

The Hindutva bubble has clearly burst. Not that efforts will not be made to form another bubble before the 2019 elections, but the one that had formed in the run-up to the 2014 elections and had carried the BJP to power is over. In the last few days, there have been mass demonstrations by peasants, traders, doctors, teachers, students and even school children. What is striking about these demonstrations is not just that the fear that had gripped people in the recent years is over and that they are willing to take to the streets to express their anger, but…

Plurality in Teaching Macroeconomics Rohit Azad

For vibrant policy making, an open-minded academic engagement between contrasting viewpoints is needed in macroeconomic education. However, there does not even exist a textbook that contrasts these contesting ideas in a tractable manner. This pedagogical paper is an attempt to plug that gap by presenting a comparative study across different traditions in macroeconomics in a unified framework, which can be developed into a semester-long intermediate-level course. Plurality_Teaching_Macroeconomics  (Download the full text in PDF format) (This article was originally posted in the Economic & Political Weekly on March 30, 2018.)  

The True Face of the Global Recovery C. P. Chandrasekhar and Jayati Ghosh

Optimistic assessments of the synchronised recovery across the world economy ignore the factors driving the weak upturn that make it fragile. True_Face_Global_Recovery  (Download the full text in PDF format) (This article was originally posted in the Business Line on April 10, 2018.)

The Prospect of Food Shortage Prabhat Patnaik

Orthodox economics has for long been haunted by the prospect that the growth in foodgrains output in the world economy would not be sufficiently high to sustain the growing population of the world. Malthus was an early exponent of this fear. Keynes too subscribed to the view that unless the poor countries somehow ensured that their population growth was controlled, there would be a food shortage in the world economy, of which growing poverty would be a symptom. This view of course was the product of an intellectual ethos which saw poverty as a consequence of excessive breeding, rather than…