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INTERNATIONAL ECONOMIC ASSOCIATION
APRIL 2006 - NEWSLETTER 33
ASSOCIATION INTERNATIONALE DES SCIENCES ECONOMIQUES
ASOCIACION INTERNACIONAL DE ECONOMIA
Letter from Janos Kornai, past IEA president
Looking back to the three-year-long period during which I had the privilege to serve the economic
profession and economic science as president of the International Economic Association, I have mixed
feelings: satisfaction on the one hand, and dissatisfaction on the other. Three years represent an
extremely short period in the endless process of scientific development. I acknowledge with pleasure that
we made progress even in this short period. This progress is manifested in the remarkable scientific
results published in professional reviews and books, and lectures delivered at various conferences, and in
the improvement of training of young economists. I am, however, one of those people who tend to focus
attention to deficiencies. I perceive how many problems we face that we cannot resolve at this point and
how many difficulties economic research and education are faced with. We can, declare that – with its
modest tools – IEA has contributed to the progress. Art the same time, I should also express regret that it
has failed to contribute even more to the repair of deficiencies.
Let me demonstrate with a few examples the general evaluation phrased in the introduction to my letter. I
would like to place those issues in the focus of attention about which I myself had ideas, intentions and
ambitions when taking over the honourable position of president.
In my view, one weak point of our profession is its isolation from the other social and behavioural
science disciplines. Economists, political scientists, sociologists, psychologists – and I could continue the
list of “adjacent” disciplines – do not know enough about one another’s conceptual frameworks,
language, methodology and, most importantly, one another’s research results. Neither do they know them
sufficiently, nor do they use them enough. One of my objectives as president was to promote
interdisciplinary approach. There was, in fact, some progress, among other things, at events organised by
IEA. The IEA roundtable conference, for example, that we held in Hong Kong on issues of market and
socialism in the light of experiences of China and Vietnam, was also attended by professionals other than
economists, such as political scientists, historians and cultural anthropologists. Similarly, illuminating
lectures were also held by professionals of adjacent disciplines at the world congress held in Morocco.
Regardless, I am not satisfied. While the comprehension of economic phenomena is primarily promoted
by development within the profession of economists, we could make far better use of interdisciplinary
cooperation both in research and education, as well as in disseminating our results. IEA could also do far
more for this. It would be, for example, beneficial, if – for the discussion of comprehensive topics – we
initiated a few events in the future in cooperation with the world-wide organisations of other disciplines.
The focus of my intellectual interest is transition in those countries that were subordinated to a Stalinisttype communist system in the not too distant past. The current order prevailing in these countries shifted
away very far from the earlier one, as it has undergone fundamental changes with regard to the political
structure, economy and other spheres of life. We, economists, play a very important role in
understanding, analysing these changes and working out proposals for further changes.
Secretariat: 23, rue Campagne Première, 75014 Paris, France Phone: (33-1) 43 27 91 44 – Fax: (33-1) 42 79 92 16
Email: [email protected]
http: //www.iea-world.org
IEA contributed to scientific research into this topic. At the world congress distinguished lectures were
delivered on the great transformation in Central-Eastern Europe and on changes in China. Problems of
post-socialist economies were addressed also by an invited session.
Our other ambitions are related to organisational matters. In the era of the Cold War, one important
mission of the International Economic Association was to bring closer to one another economists living
east of the Iron Curtain and those living west of it. History has torn apart the Iron Curtain. Political and
bureaucratic obstacles to relations have ceased to exist. This, however, does not assure automatically the
world-wide organisational integration of the economic profession.
IEA is the international association of national economic associations. During my presidency we made
progress in establishing and strengthening contacts with Chinese economists. Today there exists a
Chinese association of economists that is a formal member of IEA in the capacity of associate member.
Even if we failed to achieve the same with Vietnam, we have managed to win a few influential persons
for promoting contacts with IEA.
There are many things to be done in this respect, too. We still have not got a member organisation in
quite a few new, independent states emerging on the territory of the former Soviet Union and Yugoslavia.
Therefore, further recruiting efforts will need to be made in the future.
Let me emphasise precisely now, upon the end of my term serving as IEA president, that the problems of
“transformation” may not be narrowed to changes in the post-communist region. There are many other
major transformation processes taking place in other parts of the world that deserve economists’
attention. Just to mention a prominent example: there is a certain degree of analogy between postcommunist transition and changes taking place in the Moslem world. All spheres face simultaneous
changes in both regions: political structure, economy, legal order, culture, ideology, customs, typical
behaviour patterns, incentives and moral standards. It might not be hopeless to remind politicians and
academic researchers that it could be worth learning from earlier positive and negative experiences.
Let me express gratitude to my colleagues for the great help they gave me during the three years of my
presidency. I could always rely on good advice from my predecessor, Robert Solow, and the tireless
efforts, initiatives and excellent organisational skills of our secretary general, Jean-Paul Fitoussi. I am
grateful to Vice-President Bina Agarwal for her inexhaustible energy and good ideas.
All we have accomplished are also the result of efforts by our assistants, Marie David and Veronique de
Labarre (Paris), as well as by Katalin Szabó (Budapest). It was reassuring to be able to rely all the time
on their constant attention and devoted work.
I had excellent co-operation with László Mátyás and Gerard Roland, the two chairmen of the world
congress in Morocco, and the other colleagues devoting efforts for the preparation of the congress. We
are all grateful to the people who helped the organisation of the world congress on the spot: Fathallah
Oualalou, Minister of Finance and Privatisation, chairman of the Organising Committee, Mohamed
Chafiki, Omar Faraj.
Let me wish great success to my successor, Guillermo Calvo, new president of International Economic
Association.
Letter from Guillermo Calvo, 2005 -2008 IEA President
Washington, DC, March 8, 2006
It is a great honor for me to inherit the mantle from an economist of the stature of Janos Kornai and the
long series of outstanding economists that preceded him. I wish to thank the IEA for the nomination.
As pointed out by Professor Solow in his letter to the IEA membership, the Association has gone
through several transformations over its sixty-odd years of existence, but it has never lost its
distinguishing characteristic, namely, being a global association of economists. This is especially
relevant in a world that has been groping towards globalization. Globalization is not a new phenomenon,
but it is fair to say that its relevance to modern economies has never been felt with such intensity since
the Second World War. It is also fair to say that globalization is encountering serious economic and
political difficulties in some parts of the world, some of which appear insurmountable. As the
phenomenon started to take root in the early 1990s, expectations were very high that the globalization
tide would lift all ships to a higher plateau. However, this was not to happen and, as a result, several
developing countries look at globalization with distrust if not outright animosity. Interestingly, not all is
gloom. Globalization seems to work spectacularly well for economies that seemed to be destined to
lackluster performance, e.g., China, India and Vietnam. Growth rates in that part of the world are record
high, and both policymakers and the public in general seem to be content with it. But even in these
success episodes the question remains whether growth might eventually bring along serious social and
political tensions that poverty and other factors presently conceal.
The IEA, through its various workshops and World Congresses, provides forums where issues
affecting a variety of economies can be discussed in an intellectually, politically and culturally balanced
atmosphere. It is hard to find other venues where this is the case. Thus, it seems to me that the time is
ripe for the IEA more sharply to focus on key globalization issues, especially those that appear as major
roadblocks. This entails a deep understanding of, for instance, the nature of recent financial crises, the
forces that prevent a more equitable distribution of income and substantially lower poverty levels, and
the factors that have kept large swaths of the world from attaining high and sustainable growth rates.
The main task of the IEA President is to choose a major topic around which the next World
Congress is organized. My previous remarks are the motivation behind the banner that I wish to display
for the 2008 conference, namely, The Globalization Debate. It is still too early to present a clear-cut and
detailed program, but in my opinion the following chapters could not be lacking:
1. Globalization in historical perspective. This is a subject that has been developing very rapidly in the
context of comparing the present episode with that at the turn of the 19th century.
2. Has financial globalization worked for Emerging Economies? The literature on recent financial crisis
episodes, both from a macro and micro perspectives is mushrooming and, hopefully, by 2008 it will reach
some reasonable level of maturity.
3. Governance of globalization. The role and governance structure of IFIs and other global government
institutions such as WTO, and the design of a new international financial architecture are the subject of a
raging debate. It is unlikely that wide agreement is reached by 2008. For this reason, the Congress could
provide an important global service by opening a space where the different points of view are aired and
further debated.
4. Political economy of globalization. This is a nascent topic that is receiving special attention in Latin
America.
5. Case studies in trade/fdi/financial globalization, e.g., China, India, Argentina, Chile, Mexico,
Indonesia, Central America. This chapter will probably occupy a large portion of the program and will
help to ensure participation from all over the world.
More detail and refinements will come with time. However, let me take this opportunity to invite all
members to comment on the proposal.
I am well aware that the task ahead is of very large proportions. Just securing a venue for the next
World Congress is a major undertaking. However, I am confident that we will succeed because, as all of
my predecessors have noted, the IEA is blessed with a small but highly efficient secretariat headed by
Professor Jean-Paul Fitoussi and seconded by Ms. Marie David and Ms. Véronique de Labarre.
Projects in preparation
“Corporate Social Responsibility (CSR) and Corporate Governance, the Contribution of
Economic Theory and Related Disciplines”
Trento, Italy, 11-12 -13 July, 2006
This conference is organised by Professors Masaiko Aoki, Margaret Blair, Ed Freeman, Lorenzo Sacconi,
Alessandro Vercelli.
Corporate
social
responsibility
is
a
bourgeoning topic all over the world not only
(and not mainly) in the academia by in the
economy itself (multinational firms, business
associations, international institutions - ONU,
OECD; ILO, UE - , international organisations
like the independent bodies of standardisation e.g. ISO, NGOs, trade unions, national and
local public authorities, etc.
At the same time CSR issues are a natural field
of interdisciplinary research for economists
and scholars in related disciplines, an area
where economic theory may prove its
relevance in the design of organisations,
institutions, governance forms that meet social
and collective demands. Even though
economists have been mainly sceptical about
alternative forms of corporate governance
proposed on the basis of the joint consideration
of efficiency and social justice, nowadays the
search for new forms of governance appear to
be driven not only by intellectual minorities,
but by a relevant part of market agents
(socially responsible consumers and investors).
Hence, it is time for deeper economic
reflections over the relationships amongst CSR
and alternative forms of corporate governance.
In fact, some have suggested that the concept
of CSR should be understood as an extended
model of corporate governance, according to
which fiduciary duties must be extended from
the mono-stakeholder perspective to a multistakeholder perspective.
Nevertheless, it is also widely shared the
beliefs that, whatever the role of company laws
or contract laws in implementing these new
forms governance, CSR essentially is a matter
of voluntarism, that is a matter of social norms
and self-regulation, emerging form some
convention or implicit social contact and
satisfying
the
requirement
of
selfenforceability and equilibrium.
This workshop aims to explore the explicative
and normative implications for the general
subject of ‘CSR and corporate governance’ of
recent lines of research in economics like new
institutional theories of the firm, contract
theory, information economics, reputation
games and evolutionary game theory, social
norms theory, non egoistic preference,
reciprocity and conformist preference models
in behavioural economics, ethics & economic
etc., and their possible synergy with the
contributions coming from related disciplines
like law & economics, strategic management,
business ethics.
“Seventy Years of the Keynesian Revolution: Past, Present, and Future”
Siena, Italy, 3-6 July, 2006
The International Economic Association has recently approved the conference project on “Seventy Years
of the Keynesian Revolution: Past, Present, and Future” proposed by (in alphabetical order) Professors
Robert W. Dimand (Brock University), Robert A. Mundell (Colombia University) and Alessandro
Vercelli (University of Siena).
This conference, to be held July 3 to 6, 2006, marks a triple anniversary: the 70 th anniversary of the
publication of John Maynard Keynes’s General Theory of Employment, Interest, and Money, the 60th
anniversary of Keynes’s death, and the centenary of Keynes’s visit to Siena. The conference, gathering
together leading macroeconomists and international economists together with Keynes scholars, will
examine Keynes’s legacy in modern economics, the applicability of Keynesian theory in a global
economy after the breakdown of the Bretton Woods system (of which Keynes was an architect), and the
institutional framework needed to ensure international equilibrium in the post-Bretton Woods world. The
conference will begin with an opening dinner at Guido’s in Siena on July 3, with the sessions at Robert
Mundell’s villa in Santa Colomba from July 4 to 6.
Nineteenth Meeting of the IEA Council
The International Economic Association’s Council held its general assembly on August 28, 2005, in
Marrakech. Attended by representatives of its members, the President Janos Kornai and the Secretary
General Jean Paul Fitoussi reported on the major activities of the Association since 2002.
The election of members of the IEA Executive Committee for the period 2005 – 2008 took place during
the meeting. Members elected are:
President:
Guillermo Calvo (Argentina)
Vice-President :
Alessandro Vercelli (Italy)
President-elect:
Masahiko Aoki (Japan)
Treasurer:
Lucas Papademos (Greece)
Members:
Kaushik Basu (India)
Eduardo Engel (Chile)
Joan Esteban (Spain)
Heba Handoussa (Egypt)
Michael Hoel (Norway)
Janos Kornai (Hungary)
Alan Krueger (USA)
Victor Polterovich (Russia)
Eytan Sheshinski (Israel)
Horst Siebert (Germany)
Robert Solow (USA)
Jinglian Wu (China)
Secretary General: Jean-Paul Fitoussi (France)
General Editor: Michael Kaser (UK)
Past/Recent IEA activities
Details on the following activities are available on the IEA web site:
http: //www.iea-world.org
Fourteenth World Congress
Marrakech, Morocco, August 29 – September 2, 2005
The Fourteenth Word Congress of the International Economic Association (IEA) took place in
Marrakech. The Local Organising Committee, headed by Mr. Fathallah Oualalou, Minister of Finance
and Privatization, President of the Moroccan Economic Association, and managed by Professor
Mohamed Chafiki and Mr. Omar Faraj, did a great deal of hard work to make the congress a successful
event.
The scientific preparation of the congress was placed under the responsibility of the IEA President,
Professor Janos Kornai, who was assisted by two co chairmen, Professor Gérard Roland (University of
California, Berkeley) and Professor Laszlo Matyas (Central European University, Budapest), and an
international Programme Committee. It may be noted that the Programme Committee members were
drawn from 22 different countries.
The International Economic Association is most grateful to all those who made this congress possible.
Intergenerational Equity
Hakone, Japan, March 10-12, 2005
This round table conference was set to discuss on Normative Evaluation and Social Choice of
Contemporary Economic Systems, and on Intergenerational Equity, both of which are being pursued at
Hitotsubashi University under the leadership of Professor Kotaro Suzumura.
The Program Committee was chaired by Professor Kotaro Suzumura, and consisted of Professors Walter
Bossert, John Roemer, Joaquim Silvestre, and Koichi Tadenuma. 25 well-qualified experts from
economics and philosophy were invited to discuss 18 papers over three days.
Market and Socialism In the Light of the Experiences of China and Vietnam
Hong Kong University of Science and Technology, Hong Kong, January 14-15, 2005
This conference was organised under the chairmanship of Professor Yingyi Qian (University of
California, Berkeley). The Programme Committee was composed by Professor Le Dang Doanh
(Vietnam), Professor Carsten Herrmann-Pillath (Witten/Herdecke University, Germany), Professor
Jinglian Wu (Development Research Center, China) and Professor David D. Li (Hong Kong University)
(Local organiser).
It has been possible to organise this conference in Hong Kong thanks to Professors Yingyi Qian and
David Li, who took the responsibility for both the organisation and financing of the meeting. The costs
involved in terms of participants’ travel and stay expenses as well as local conference costs were borne
mainly by the Hong Kong University of Science and Technology.
IEA Publications
The following volumes, published since 2002, are currently available:
Congresses volumes:
“Psychology, Rationality and Economic
Behaviour:
Challenging
Standard
Assumptions”, edited by Bina Agarwal and
Alessandro Vercelli (Lisbon congress, 2002)
“The Past, Present and Future of the
European Union” (containing Romano Prodi’s
Opening Address), edited by Alan V. Deardorff
(Lisbon congress, 2002)
“Multinationals and Foreign Investment in
Economic Development”, edited by Edward M.
Graham (Lisbon congress, 2002)
“Structural Reform and Economic Policy”,
edited by Robert M. Solow (Lisbon congress,
2002)
The delayed final volume of the Buenos Aires
Congress (1999), “Latin American Economic
Crises: Trade and Labour”, edited by Enrique
Bour, Daniel Heymann and Fernando Navajas,
was published on 9 December 2003.
Together with publication of the three hardback
editions, two Congress volumes were published
in paperback, viz., Jacques Drèze (ed.),
“Advances in Macroeconomic Theory”, on 27
November 2003, and Richard B. Freeman (ed.),
“Inequality around the World”, on 6 June
2002.
Conferences Proceedings
“Post-Conflict Economies in Africa”, edited by Augustin Kwasi Fosu and Paul Collier (Kampala, 2002)
A volume of six papers with a ‘Foreword’ by Robert M. Solow, sponsored by the Global Development
Network and the IEA, was published simultaneously in hardback and paperback in August 2003: Gary
McMahon and Lyn Squire (eds), “Explaining Growth: A Global Development Project”.
Proceedings of the following meetings are in preparation:
“Intergenerational Equity and Sustainability”, John Roemer and Kotaro Suzumura (eds) (Hakone, 2005)
“Market and Socialism in the Light of the Experience of China and Vietnam”, Janos Kornai and Yingyi
Qian (eds) (Hong Kong, 2005)
Four volumes from the Marrakech congress of August / September 2005.
News from Member Associations
The Executive Committee, during its meeting in Marrakech, on August 27, 2005, welcomed the
applications of the Omani Economic Association and the China Association Comparative Economic
Studies (CACES) respectively as member and associate member of the International Economic
Association.
Obituary
The death at an early age of Professor Jean Jacques Laffont, Member of the 2002-2005 Executive
Committee of the International Economic Association, has greatly saddened all those who knew him. He
was an outstanding economist and a delightful person.