I 203

Markets and Governance

Group Research Project, Class No. 26363

Fall 2004

Due Date for First Draft: September 23, 2004

Due Date for Second Draft: October 14, 2004

Due Date for Third Draft: November 9, 2004

Due Date for Final Draft: December 11, 2004

No. of pages: about 15 typed and double-spaced, 12 point font

This is a team project. Teams will consist of three team members in most cases, but there might be some teams of two. Working as a team on these projects allows you to go deeper in your analysis. This is a true team project. Your teammates will depend upon your efforts. Do not let them down. If your team decides that you need to go to the library to dig up some data or some government documents, do it and do it on time. It is the right thing to do. If you approach this project with the attitude of a prima donna you will not benefit the team and you yourself most likely will suffer and receive a lower grade. If you approach this project with the attitude that you will choose actions that allow your teammates to shine, chances are your team will do well and you yourself will benefit from the higher grade you receive for this project.

In each project the work will be broken down into clearly distinguished components. Each team member is responsible for one component. The assignments of components to team members will be done in consultation with your instructor. The team project together is worth 40 points. Thirty of these points will be assigned to the overall team output and ten points will be assigned to each individual component.

The purpose of any research project is to find out something that you did not know before. If you truly want to learn something, don’t be satisfied with claims made by famous people. We do not want you to do research on what a dozen or so famous people have said. We want you to find that information yourself. This is hard, just like running the half-mile in two minutes. But if you put in the effort, you can do it, and in the process you might learn something that many other people, even so-called well-educated folk, don’t know.

Topics:

1. Collect data on unemployment rates and employment rates for the period 1970-2002 for France, Denmark and the US. Which specific labor market policies in these three countries could be responsible for generating the pattern in the data? What can be learned from the communal experience of these three countries? To answer this question use theories of labor markets developed in class.

2. In the debate on globalization some people are arguing that globalization leads to a victory of the market over the state. Concretely this might mean that governments (the state) will be less able to fund social safety nets and transfer programs that many in the rich economies of the western world have become accustomed to. Sometimes this decline in public spending on social safety nets and transfers is referred to as a “race to the bottom.” Is there any empirical support for the claim that globalization generates such a race to the bottom? Pick three countries in the OECD group of countries and crunch the numbers. Look specifically for time-series data on domestic welfare spending (health, education, social security) as a percentage of the total budget over several decades. Is there any other evidence that supports the claim of a race to the bottom?

3. Determine the three most successful economies over the last 30 years in Latin America. Be explicit about the yardstick(s) you are using to determine economic success. Can you identify three or four specific policies chosen by the three governments in these countries that are responsible, at least in part, for generating this economic success? If these policies are so beneficial, why are they not adopted in other countries?

4. When free trade agreements like NAFTA are negotiated some argue that environmental standards need to be tied to such agreements. Is it really a good idea to tie environmental standards to free trade agreements? What goals could be served by such a tie? Use three specific examples perhaps from the following list of disputes brought before the World Trade Organization and utilize economic and political theory to answer this question: the U.S.-Mexican dolphin-tuna dispute, the Shrimp-Turtle dispute between the U.S. and India, the French-Canada dispute on Canadian exports of asbestos to France. and the U.S. dispute with Brazil and Venezuela over environmental standards for gasoline imports.