For William Easterly's recommendation to be realistic this would require
a degree of equality in the power relationship between governments able to
raise taxes and the polluting multinational who can choose to invest
elsewhere when so taxed.
This equality of relationship seems very far from reality (to the limited
extent
of my understanding of this) in the developing world.
This understanding suggests that when a person is desperate they
will do almost anything for cash. The same consideration has to apply to the
economic relationship which generally exists between poor countries and
powerful multinationals.
Richard Kay
[log in to unmask]
> -----Original Message-----
> From: [log in to unmask] [SMTP:[log in to unmask]]
> Sent: Thursday, January 18, 2001 11:32 PM
> To: [log in to unmask]
> Subject: Re: Moral Economics - 16
>
> Contrary to Dr. McKeever's statement, economists have extensively studied
> external costs (or in economist jargon "externalities"). The standard
> recommendation is for the producer to be taxed to bear the negative social
> costs
> he or she creates, which will then induce the producer to reduce those
> "unintended consequences" (like pollution).
>
> As far as the negative effect of growth on the poor, there is no evidence
> that
> the poor are left behind systematically by economic growth (see references
> on
> web site below). However, the poor do not share as much in overall growth
> when
> there is a high level of inequality. Oddly enough, they have also appeared
> in
> the past to share less in growth when there is a World Bank or IMF program
> in
> place.
>
> William Easterly
> MC3-337
> World Bank
> 1818 H Street
> Washington DC 20433
> Phone 202 473 8965
> Fax 202 522 3518
> Web-site: http://www.worldbank.org/research/growth
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