Category: Political Science

Bolivia’s new president is planning major reforms to unleash a mining and oil exploration boom, burying nearly 20 years of socialism in the Andean nation with a new policy — “capitalism for all”.

Rodrigo Paz, a pragmatic centrist former senator, said his team was working on a package of laws to boost foreign investment in natural resources that would be presented to congress for approval “in the coming days or months”.

“We need a new oil and gas law,” Paz told the Financial Times in an interview while attending an economic forum in Panama.

“Bolivia should go for 50-50 [risk-sharing with foreign investors]. I give you the space. You come in with technology and investment . . . I think it’s the basis for business in future.”

Bolivia has a fifth of the world’s reserves of lithium, according to the US Geological Survey, but with its state-owned company YLB lacking technical expertise and investment, it has struggled for years to produce commercial quantities of the battery metal and exports are currently dominated by neighbouring Chile.

Bolivia also has big reserves of silver, tin and antimony. Paz said the Bolivian people, who have a history of protesting against mining, would support fresh investment if they were shown they would benefit financially. He compared his country to its neighbours: “Peru last year had mining revenues of around $50bn. Chile had revenues with state and private companies of $65bn. And we . . . had just $6bn,” he said.

Here is more from Michael Stott at the FT.  We will see, as they say.  I am cautiously hopeful.

Shikha Dalmia moderates, here is the link.  Excerpt from the summary:

One reason for the populist revolt in America is the notion of the “deep state”—that an unaccountable bureaucracy is secretly ruling the country. Frank and Tyler come from very different intellectual traditions. Frank, a centrist, is a student of Max Weber and Tyler is a limited government libertarian. Yet they have both argued that liberal states in complex modern societies need a functional bureaucracy—a.k.a. state capacity—to deliver public goods and solve collective action problems. But they also have a ton of disagreements, especially on just how broken American governance is—and they duke it out in a spirited discussion.

And an excerpt from me:

Cowen: I don’t think American state capacity historically is that weak. We built this incredible empire, often unjustly. We put a man on the moon. We developed the atom bomb. We’re leaders in aviation and computers in part because of government. A lot of our state governments work really quite well. It’s a mixed bag, but I think we’d be in the world’s top 10 easily. Noah Smith had a great blog post on this.

Self-recommending!  And yes with tons of disagreement, the dialogue is a good overview of where my views are at in this moment, stated super clearly as usual.  There is a transcript at the link, it is easy to read through the slight typos.

That is the topic of my latest Free Press column, here is one excerpt:

Though Donald Trump seems to be calling off his latest trade war, the United States has indeed retreated from free trade with a new era of tariffs. It’s a development I rue. But Canada just opened its market to Chinese cars. So Trump did in fact find the recipe to nudge an oft-protectionist Canada toward freer trade, though it is the opposite of what he might have been wishing for. Soon, Canada will have access to better and cheaper electric cars than what we can get in the United States. And even if you think that spyware could make those cars a security risk in Washington, D.C., due to spying possibilities, I am less worried about their proliferation in Quebec and Nova Scotia. Keep them out of Ottawa if need be.

The European Union just worked out a free trade agreement, pending final approval, with Mercosur, a trade bloc encompassing hundreds of millions of people in South America, a region that is likely to be more economically important in the future. The EU also announced it is likely to strike a free trade agreement with India, the most populous nation in the world and one of its fastest-growing economies. However imperfect these agreements may turn out to be, has there been any recent short period with so much progress in free trade?

And this on Mark Carney:

Canadian prime minister Mark Carney’s speech on Tuesday garnered a lot of attention, but I think for the wrong reasons. He proclaimed the ability of “middle powers”—that is, Europe and countries like his own—to stand their ground against America and China, but he mentioned AI only in passing. He had no solution to an immediately pending world where Canada is quite dependent on advanced AI systems from American companies (often, incidentally, developed by Canadian researchers in the U.S.). That is likely to be the next major development in this North American relationship, and it will not increase the relative autonomy of Canada or of any other middle powers.

Carney has garnered praise for staking out such bold ground and standing up to Trump. The deeper reality is that Carney can “talk back” in the North American partnership because he knows America will defend Canada, including against Russia, no matter what. Most European countries cannot relax in the same manner, and thus they are often more deferential. What the reactions from Carney and the Europeans show is not any kind of growing independence for the middle powers, but rather a reality where you are either quite tethered to a major power—as Canada is to America—or you live in fear of being abandoned, which is the current status of much of Europe.

Recommended.

Following up on my recent post, which suggested less skilled immigration into the UK has not been a disaster, the question has been raised about long-term negative political externalities.  Will not migrants enter the country and make electoral outcomes worse?  I would offer a few points in response:

1. If this is the argument, one needs to admit that immigration has gone well enough in the UK to date.  This argument is about the future, not the past.

2. The UK has indeed had a variety of poor leaders as of late.  It is very difficult to hold immigrants responsible for them, mostly it is the native white Brits who have been at fault.  You might not like how UK Muslims have shaped some of the Middle Eastern statements of Labour, but that is hardly a relevant factor behind the slowdown of the British economy, or of British gridlock.

3. There is a very real risk that Reform will win the next election and then implement bad economics policies, above and beyond whatever you think of their approach to immigration.  But if that is the real fear, it would be good to limit their popularity by talking up the positive side of immigration.  I am not suggesting that any of us should tell anything less than the full truth, but obviously there are many positive aspects of migration that even professional economists can get wrong.  Does immigration mean “higher home prices” or “capital gains for domestic homeowners”?  Well, both, but you hear much more about the former than the latter (even Gemini got that one wrong).  Let’s redress the balance, and lower the risk of future bad economic policy while we are at it.

4. Sometimes immigration weakens the demand for welfare state transfers, since the immigrants are viewed as outsiders.  In Britain, that would currently be a positive at current margins.  I recognize that is by no means the only political effect, but in any case do not assume that all of the political externalities are negative.

Above all else, it is difficult to paint immigrants as major villains for Britain’s troubles so far.  Just read through the original analysis again.  It has not been seriously countermanded, and do most of their problems are indeed the fault of the white people.

That all said, I would readily admit, and indeed stress, that a better set of migration policies could have put Britain in a much better position than it is today.