More than a decade since the vicious battle between Gucci and Bernard Arnault’s Louis Vuitton Moët Hennessy, this case remains an important case study in the failure of smart men to make measured choices. What led such wise men to fall prey to multiple mistakes and ultimately to the disintegration of negotiations? The work of the Harvard Negotiation Project and Robert Axelrod help elucidate the areas in which the characters involved could have acted differently. The consequences of the case highlighted the new interconnectedness of global financial and corporate markets. Today, luxury goods conglomerates cite this case as one of the most important in the history of fashion.
This paper examines why productivity, as measured by output per work hour, has not increased significantly during the current Digital Revolution, despite rapid and intense technological progress and the influx of new inventions. The failure of technological progress to bring immediate increases in productivity and standards of living is paradoxical from an economic view. This paper presents statistical data on productivity and gross domestic product (GDP) growth across a number of economies for the past 40 years. Following that, it reviews several economic and history of science and technology theories about the current lower than expected productivity, including its possible relations to the initial delay in productivity growth during the Industrial Revolution of the late eighteenth century and the Technological Revolution of the early twentieth century. It then presents several explanations for the delay in productivity growth that are specific to the Digital Revolution.
Ecuador thought they would shock the world into action with their call for international funding to prevent the exploitation of oil reserves under their Yasuní-ITT National Park. The response was silence and inaction. Why? This paper examines Ecuador’s Yasuní-ITT Initiative that sought to share the costs of preserving the Amazon Rainforest and its apparent failure through the lenses of collective action theory and cost-value analyses. While the initiative was unsuccessful this time around, with some adjustments it could prove a useful model for future conservation efforts.
This research sheds light on the U.S. government’s efforts to petition media professionals not to report on U.S. data surveillance and military engagements. After 09-11, warrant court based U.S. surveillance practices morphed into warrantless U.S. surveillance activities, and poor journalistic working standards led to a chilling effect in government-media relations during during the Obama administration. This analysis illustrates the influence of media reports on the U.S. government in times of unclear U.S. policies. The findings of this paper underline the fact that journalistic non-compliance with governmental secrecy requests prevents our societies from becoming distopic democracies.
There is no definitive answer as to the impact on a country’s macroeconomic indicators of joining the Eurozone. There is little impact on a country’s trade dependence. Peripheral countries suffered in terms of unemployment, but weakly gained in terms of incomes. However, no doomsday image emerges. While this appears to limit the short-term economic upside of the currency union project, it brings into the forefront the Eurozone’s aforementioned political considerations: eliminating competitive devaluations, having a common European monetary voice and tightening economic and political bonds within Europe. If this appeals to a prospective Eurozone member, they should not hold back for economic fears.
According to the UNHCR, 75,000 people attempted to cross the Mediterranean in the first six months of 2014 with 800 dying before reaching land. Yet people still insist on making the journey. On the other side of the Mediterranean is the European Union, which persecutes some who have survived the journey while providing sanctuary to others. It is high time for European Union member states to work together to find a durable and sustainable solution to the situation in the Mediterranean. This paper briefly discusses the main reasons migrants embark on such a perilous journey and suggests elements of a strategy to address this issue.
A consideration of NASA's asteroid observation mission highlights the possibility that for rare events observation is not unambiguously positive. Although measurement is beneficial in the long run, and is required for eventual risk management or mitigation, it may at first actually increase the expected value of the risk. In the case of the asteroid mission, observation created a substantial risk of false positives that greatly outweighed the initial potential risk reduction from early warning or asteroid diversion, such that the total risk increased. These dynamics are explored with a simple model that can be extrapolated to improve the risk calculation for any rare threat.
This paper portrays the Spanish transition to democracy in the context of selected systems and negotiation theoretical arguments. Transition leaders’ ability to think in systems and to conceive a framework for negotiations centered on shared interests and common goals was crucial for the success and durability of the process. However, the common view of the Spanish transition as a sheer “success story” falls short of recognizing the sacrifices that were made to achieve peaceful transformation of the political system. In fact, the transition compromise engendered severe problems that strain the Spanish State and the political process until the present day.
Ventures selling distributed electricity directly to impoverished consumers achieve affordability by minimizing up-front prices and collecting post-sale revenue. Through interviews with 30 practicing entrepreneurs operating at the base of the pyramid (BoP), we evaluate two pricing methods, micro-finance and pay-as-you-go, that accomplish this task. Each of these methods has implications for other aspects of the venture’s business model. With further research, these models might be adapted to other undeveloped sectors around the world that also lack infrastructure and competition.
Katy Frank was employed as a lead instructor for the Refugee Affairs Division at the U.S. Department of Homeland Security (DHS). She is a subject matter expert in U.S. refugee law, policy, and processing having designed and delivered curricula on topics such as refugee law, U.S. immigration law, interviewing skills and cross-cultural communication. The following is the text of a written interview with her conducted by the SAIS Europe Journal Staff.
This article explores the rationale behind the 315 billion euro spending program of the European Union called the ‘Juncker Plan,’ and expands upon the analytical framework of McNamara in her 1998 book, "The currency of ideas." Policy elites believed that, at the member state level, Keynesian counter-cyclical fiscal expansion was an ineffective policy tool. This led directly to the creation of new budget rules for European Union member states under the European Semester and the Macroeconomic Imbalance Procedure (MIP). The Juncker plan is the product of the constraining institutions created before the shift towards Keynesian demand management -- which makes an expansionary fiscal policy at the Union level the logical path out of the crisis.
In the fall of 2014, the United States Secret Service was the subject of much scrutiny in the wake of an embarrassing string of compromises to President Obama’s safety. This article seeks to determine if such criticism was warranted through an analysis of the flawed risk model that lead to the 1995 assassination of Israeli Prime Minister Yitzhak Rabin. Even though there was ample evidence portending this risk model’s impotence, it was not put to good use because of the Shin Bet’s (Israel’s equivalent of the Secret Service) focus on a priori experience with little consideration for a posteriori knowledge, most likely caused by Daniel Kahneman and Amos Tversky’s so called “conjunction fallacy.” Ultimately, I conclude that Rabin’s assassination was the result of a seriously flawed understanding of risk, one thankfully not shared with the contemporary Secret Service.
We are proud to introduce our readers to SAIS Europe’s new director with this interview. Michael Plummer, himself a 1982 SAIS graduate, has been the Eni Chair of International Economics at SAIS since 2008 and has taken on the role of SAIS Europe director as the Bologna campus marks its 60th anniversary this year. He is a distinguished economist, who has served as the head of the development division of the Organization for Economic Cooperation and Development (OECD) and editor-in-chief of the Journal of Asian Economics. Prior to SAIS, Plummer was an associate professor at Brandeis University, also serving as the Director of M.A. programs at the university’s Graduate School of International Economics and Finance, now known as the International Business School. (Interview transcript has been condensed and edited for publication)
In the wake of a World War and under the control of an occupying army, the Japanese people accepted a constitution in 1947 that was unique in composition. The world’s first “Peace Constitution,” Article 9 of Japan’s founding document explicitly prohibits war and the maintenance of a standing army. Despite its imposed nature and numerous attempts by Japan’s conservative elite to alter this stricture, Article 9 has remained untouched due primarily to the efforts of the Japanese peace movement. However, with China’s rise and the popularity of Japan’s nationalist Prime Minister Shinzo Abe, calls for a return to military normalcy now seem to dominate those for restraint. This paper traces the rise and fall of the Japanese peace movement, as well as the incremental process of remilitarization, which has accelerated sharply over the last decade. Finally, it investigates the nature of Japanese remilitarization under Shinzo Abe and analyzes its effect on East Asian security and US foreign policy.
More than twenty years of climate change negotiations have left many observers pessimistic about the prospects of reaching a meaningful global agreement. Despite the urgency of making deep reductions in greenhouse gas emissions, disagreements between parties seem to have led to stalemate. This paper takes a more optimistic view, examining two of the unexpected successes of the negotiations. The analysis suggests that while onlookers—in a realist mindset—predicted failure for both the Clean Development Mechanism (CDM) and Reducing Emissions from Deforestation and forest Degradation (REDD), negotiators used problem-solving to achieve consensus and concrete results. Based on the analysis of the integrative bargaining that led to these results, if negotiators and observers adopt the liberal "problem-solving mindset," a comprehensive agreement that creates value for all parties is more likely in the 2015 Paris negotiations.
The academic debate on whether world income inequality is rising or falling has reached a stalemate: parties are unable to agree on the analysis of these economic world trends. This commentary examines recent research that supports the opposing “convergence” and “divergence” camps to examine the origins of the debate, and to determine why consensus is so difficult to reach. While this analysis concludes that the main driver of disagreement is calculation methods and data, that conclusion poses a key question: Is studying world income inequality useful?
The World Trade Organization is hindering the ability of member countries to pursue green growth policies. As the nature of international trade evolves, the creation of global supply chains has forced us to measure trade in value added rather than goods produced. These same trends demand a more nuanced and accurate assessment of costs, both economic and environmental. By modernizing its rules governing fossil-fuel subsidies and unincorporated production processes, the WTO can usher in a new era of freer, "greener" trade.
The conflict between the Turkish government and the Partiya Karkeren Kuridstan or PKK has persisted to varying degrees of intensity since the latter’s founding in 1978. Over this time, tens of thousands have been killed on both sides. This devastating death toll combined with the litany of failed peace processes along the way have culminated to cement a stalemate with deep mistrust on both sides. Though the most recent peace overtures from the Erdogan government and subsequent withdrawal of PKK fighters from eastern Turkey brought hope of a breakthrough, that progress has now stalled as both sides look set to retrench against the perceived insincerity of the other. While the conflict is complex and dynamic, one aspect is often written off to the margins: the nature of the PKK itself. Many governments and analysts simply write the group off as a mere militant group, terrorist organization, or band of freedom fighters. In this paper, I argue that the stalemate currently being experienced is precisely because policymakers have failed to realize the true nature of what the PKK has become. Indeed, rather than conforming neatly to any one label, the PKK has transformed into a symbol of Kurdish ethno-nationalism. Only when the peace process takes this into account will the stalemate truly have a chance to be broken.