Charles Wolf

A series of essays on the global economy, U.S. economy and foreign policy, and Asian economics and politics, which appeared in prominent newspapers and journals from 1996 to 2002. The essays in this book were written between the end of 1996 and the middle of 2001, and published in prominent newspapers and journals. The book is divided into three sections: The Global Economy, The U.S. Economy and Foreign Policy, and Asian Economics and Politics. The author is a strong, but not uncritical, adherent of free and competitive markets, and of market mechanisms rather than government intervention to address economic problems. He is skeptical and critical of U.S. efforts, however well intentioned, to intervene in politically charged, ethnically complex, and murky conflict environment. He is inclined toward restarting cross-Strait discussions between Mainland China and Taiwan. Finally, he tries to envisage the economic and military directions in which particular countries or regions are moving, and what the movements portend for the future.

The end of the Cold War has shifted attention from military threats to other things that might negatively affect the people of the United States. High on the list of concerns is national economic security--the ability to protect or to advance economic interests in the face of circumstances that may threaten or block these interests. The United States is not economically isolated but an integral part of the world economy, doing business in world markets and influencing--and being influenced by--the international financial environment, economic policies, and commercial and financial infrastructure. Thus, enhancing international economic security enhances U.S. economic security--and its physical security, because some situations can escalate to the point that they require a military response. A strong military to respond to such a threat requires strong economic underpinnings--and economic instruments can serve as a nonmilitary form of defense, even as defense considerations can affect the economy.

Provides a formal theory of nonmarket failure, analyzing such problems as redundant costs, monopoly, frequency of unanticipated externalities, and bureaucracy in such nonmarket institutions as foundations, universities, and government.A theory of market failures is well established in economics, but the same has not been true for the study of nonmarket failures. Markets or Governments remedies this situation by providing a formal theory of nonmarket failure, analyzing such problems as redundant costs, monopoly, frequency of unanticipated externalities, and bureaucracy in such nonmarket institutions as foundations, universities, and government. This new edition updates the data and results contained in the first edition and includes references and applications of the theory to the ongoing process of system transformation in Russia, Ukraine, and Eastern Europe. The discussion of earlier literature that is relevant to the theory of nonmarket failure has been expanded.