Tuesday, March 4, 2008


If you want to ask me questions about the American presidential race, remember that I'll be doing a live chat with Le Monde on Wednesday, March 5, at 10 AM EST (16h00 Paris time).

One Good Turn ...

... deserves another. I am pleased to have been "tagged" by Petitsuix at the site Ecopublix and even more pleased to have been placed in the company of such august academic bloggers as Daniel Cohen, George Borjas, Greg Mankiw, and Dani Rodrik. So I am glad to return the favor by pointing readers to the Ecopublix site, which I have cited many times in the past.

CNRS Reform

Robert Thau, in a comment to a previous post, recommends this article for a "shrill" view of the CNRS reform strategy. The site of the association "Sauvons la Recherche" is another good source of (partisan) information. For example, this and this.

Askenazy on Economic Statistics

Philippe Askenazy has an excellent column in Le Monde today in which he notes two ways in which statistics concerning the state of the French economy can be misleading. Since I have committed both of the errors he castigates in this column, consider this post a mea culpa. First, it is often said that France has an unusually high number of people working for minimum wage (the SMIC). Askenazy points out that the figure of 17 percent given by Eurostat reports the proportion whose base wage is the SMIC, even if they receive additional incentive pay such as commissions. Second, he notes that French public expenditure as a proportion of GDP cannot be directly compared to public expenditure in other countries where, for instance, health care or retirement pensions are funded by mandatory private insurance rather than by social contributions.

Mediterranean Union, RIP

Whatever the Mediterranean Union is to be, it will not be what Sarkozy imagined when he proposed it. It was to have been, I think, two things: an alternative to be offered to Turkey as compensation for France's adamant opposition to Turkish EU membership, and an alternative to be offered to France as a theater for foreign-policy maneuvering independent of the EU. France saw the Mediterranean as an arena for deals involving energy: oil and gas and uranium in exchange for nuclear power plants. It was also a place in which the French could seek to develop an independent set of alliances that might make it a more powerful player in the politics of the Middle East, a partner rather than a pawn in U.S. initiatives in the region.

But the vision was never very clearly defined, and this made it easier to let go of the project after strenuous if muted German opposition developed early on. The MU has now been brought safely back beneath the umbrella of the EU, which is where Germany wanted it all along, and Sarkozy has managed the tactical retreat without losing too much face. Indeed, the French newspapers seem strangely uninterested in the latest developments. Le Figaro devotes minimal space to it. Libé and Le Monde have found even less to talk about. The British have taken greater notice. The Turks are of course pleased:

"They (the French) have given us a guarantee that the Mediterranean Union is not an alternative to Turkey's EU project, they say that idea has now been abandoned. They are sincere in this," the diplomat told Reuters.

One wonders, of course, what drama took place inside the Élysée. My guess is that three officials were primarily involved: Jean-David Levitte, Sarko's chief foreign policy advisor; Claude Guéant, secretary general of the Élysée, who has a special interest in Mediterranean affairs; and speechwriter Henri Guaino, whose "national republican" coolness to the EU is well known and who may have seen the MU as a sort of "civilizational" alternative to the EU. Actually, he would have seen it as a "cultural" alternative to the "civilizational" project of the EU, to use Thomas Mann's famous distinction (see his "Reflections of an Unpolitical Man," in which "civilization" acquires a somewhat pejorative connotation stemming from the substitution of outward and material for inward and spiritual well-being). For Guaino, the countries of southern Europe share a distinctively Mediterranean culture, which he perhaps hoped would serve as an antidote to the "economistic civilization" of the EU, to its alleged emphasis on material measures of well-being, for which he has proposed a number of alternatives, from the "politics of civilization" borrowed from Edgar Morin to the call to Joseph Stiglitz and Amartya Sen to devise new measures of welfare to the rhetorical inflation of the Mediterranean Union in Sarko's early foreign policy speeches, for which I suspect Guaino was chiefly responsible. In the end, one might speculate, Levitte's cooler counsel prevailed, aided of course by the realization that the Franco-German relationship is ultimately the crucial one; the Mediterranean, toujours recommencée, as the poet says, will always be there.

How Can This Be?

After so many fine words extolling the importance of research to renewing the vitality of the French economy and the attractiveness of France as a country in which to invest, chercheurs of the CNRS are claiming that crédits de base, which cover basic laboratory operating expenses, have been decreased by 5 to 6 percent and in some labs even more. Can the government really be this short-sighted? Or are the claims a case of poor-mouthing by lab directors looking to increase their budgets? What is the government's strategy for coordinated reform of the universities, R&D, and liaison between research and industry? Is it merely hiding its cards well, or does it not know what it's doing? From this distance, it's hard to tell, but, as in other policy areas, a troubling impression of confusion and disarray hovers in the air.

Words to Live By

Willem Buiter, a professor political economy at LSE, offers this pungent observation on transnational regulatory regimes. Although it is aimed specifically at British banking regulation and the deficiencies revealed by the Northern Rock crisis, it has wider applicability. French officials in particular should keep this advice in mind, since there has been talk of trying to make Paris a financial center to rival London by relaxing various controls.

Coordination between multiple institutions, especially in a crisis, is always problematic: panic moves at the speed of light and even well-intentioned, cooperatively minded parties will find it hard to engage in synchronised swimming while piranhas and sharks lurch at their tender extremities.

The UK’s ‘light -touch’ regulatory approach has been found wanting and exposed as little more than soft-touch regulation. No doubt it has been successful in attracting financial sector activity to London – that is, it has been an effective competitor in the socially negative-sum global deregulation game. It has made a material contribution to the regulatory race to the bottom, which has left much of the shadow banking sector outside the regulatory net altogether, and has reduced both the information available to the regulator and the power of the regulator to prescribe or proscribe behaviour in those market segments that remain regulated