DOCSLIB.ORG

Beyond the Curse: Policies to Harness the Power of Natural Resources

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Beyond the Curse: Policies to Harness the Power of Natural Resources Beyond the Curse Policies to Harness the Power of Natural Resources EDITORS Rabah Arezki, Thorvaldur Gylfason, and Amadou Sy INTERNATIONAL MONETARY FUND ©International Monetary Fund. Not for Redistribution © 2011 International Monetary Fund Cataloging-in-Publication Data Beyond the curse : policies to harness the power of natural resources / editors, Rabah Arezki, Thorvaldur Gylfason, and Amadou Sy. – Washington, DC : International Monetary Fund, 2011. p. ; cm. This book is based on a high level seminar on natural resource, finance and development, IMF Institute and Central Bank of Algeria, Algiers, November, 4-5, 2010. Includes bibliographical references. ISBN 978-1-61635-145-8 1. Natural resources. 2. Resource curse. 3. Fiscal policy. 4. Monetary policy. 5. Foreign exchange rates. 6. Diversification in industry. 7. Economic development. 8. Primary commodities. 9. Prices. 10. Exports. 11. Finance. 12. Financial institutions. 13. Sovereign wealth funds. I. Arezki, Rabah. II. Gylfason, Thorvaldur, 1951-. III. Sy, Amadou N. R. IV. International Monetary Fund. HC85.B49 2011 Disclaimer: The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries. Please send orders to: International Monetary Fund, Publication Services P.O. Box 92780, Washington, DC 20090, U.S.A. Tel: (202) 623-7430 Fax: (202) 623-7201 Email: [email protected] Internet: www.imfbookstore.org Cover design: Lai Oy Louie, IMF Multimedia Services Division ©International Monetary Fund. Not for Redistribution Contents Foreword vii Acknowledgments ix Abbreviations and Acronyms xi 1 Overview ............................................................................................................................1 Leslie Lipschitz Part I COMMODITY MARKETS AND THE MACROECONOMY .......................................................5 2 Natural Resource Endowment: A Mixed Blessing? .............................................7 Thorvaldur Gylfason Introduction ...........................................................................................................................................................................................................7 Policy Issues in Natural-Resource-Rich Countries .......................................................................................................................11 Norway and Other Success Stories ......................................................................................................................................................20 From Anecdotes to Empirical Testing .................................................................................................................................................26 Conclusion ...........................................................................................................................................................................................................31 References ............................................................................................................................................................................................................33 3 Primary Commodities: Historical Perspectives and Prospects ...................35 Marian Radetzki Primary Commodities in the Economic Development Process .........................................................................................35 Falling Transport Costs and Globalizing Markets .........................................................................................................................39 The Entry and Exit of the State in the Commodity Sector in the 20th Century ......................................................42 Real Prices: Falling Long-Run Trends and Short-Run Instability .........................................................................................45 Policy Implications for Commodity-Exporting Nations ...........................................................................................................48 References ............................................................................................................................................................................................................50 Part II ECONOMIC DIVERSIFICATION AND THE ROLE OF FINANCE ....................................................53 4 Economic Diversification in Resource-Rich Countries ...................................55 Alan Gelb Introduction ........................................................................................................................................................................................................55 Why Diversify? ....................................................................................................................................................................................................59 The Resource Curse: A Diversification Perspective .....................................................................................................................62 The Examples of Malaysia, Indonesia, Chile, and Dubai ..........................................................................................................69 Some Common Factors in Success ......................................................................................................................................................74 Conclusions .........................................................................................................................................................................................................76 References ............................................................................................................................................................................................................78 iii ©International Monetary Fund. Not for Redistribution iv Contents 5 Finance and Oil: Is There a Resource Curse? ......................................................81 Thorsten Beck Introduction ........................................................................................................................................................................................................81 Finance and Growth: Is There a Natural Resource Discount? ..............................................................................................85 Finance and Natural Resources—Is There a Resource Curse?.............................................................................................90 Banks in Resource-Based Economies ..................................................................................................................................................95 Access to Finance in Resource-Based Economies ......................................................................................................................98 Summary and Policy Implications......................................................................................................................................................103 References .........................................................................................................................................................................................................104 6 The Economics of Sovereign Wealth Funds: Lessons from Norway ...............................................................................................107 Thomas Ekeli and Amadou N.R. Sy Introduction .....................................................................................................................................................................................................107 The Economics of Sovereign Wealth Funds.................................................................................................................................108 The (Long) Road to a Sovereign Wealth Fund............................................................................................................................109 Sovereign Wealth Management..........................................................................................................................................................111 Conclusions and Policy Implications ................................................................................................................................................114 References .........................................................................................................................................................................................................115 Part III FISCAL POLICY .............................................................................117 7 Primary Commodity Price Series: Lessons for Policymakers in Resource-Rich Countries ....................................................................................119 Kaddour Hadri Introduction .....................................................................................................................................................................................................119 Empirical Evidence .......................................................................................................................................................................................122 What Can Policymakers Do to Counter These Three Challenges? ................................................................................127
Load more

Recommended publications
  • Twenty-Four Conservative-Liberal Thinkers Part I Hannes H
    Hannes H. Gissurarson Twenty-Four Conservative-Liberal Thinkers Part I Hannes H. Gissurarson Twenty-Four Conservative-Liberal Thinkers Part I New Direction MMXX CONTENTS Hannes H. Gissurarson is Professor of Politics at the University of Iceland and Director of Research at RNH, the Icelandic Research Centre for Innovation and Economic Growth. The author of several books in Icelandic, English and Swedish, he has been on the governing boards of the Central Bank of Iceland and the Mont Pelerin Society and a Visiting Scholar at Stanford, UCLA, LUISS, George Mason and other universities. He holds a D.Phil. in Politics from Oxford University and a B.A. and an M.A. in History and Philosophy from the University of Iceland. Introduction 7 Snorri Sturluson (1179–1241) 13 St. Thomas Aquinas (1225–1274) 35 John Locke (1632–1704) 57 David Hume (1711–1776) 83 Adam Smith (1723–1790) 103 Edmund Burke (1729–1797) 129 Founded by Margaret Thatcher in 2009 as the intellectual Anders Chydenius (1729–1803) 163 hub of European Conservatism, New Direction has established academic networks across Europe and research Benjamin Constant (1767–1830) 185 partnerships throughout the world. Frédéric Bastiat (1801–1850) 215 Alexis de Tocqueville (1805–1859) 243 Herbert Spencer (1820–1903) 281 New Direction is registered in Belgium as a not-for-profit organisation and is partly funded by the European Parliament. Registered Office: Rue du Trône, 4, 1000 Brussels, Belgium President: Tomasz Poręba MEP Executive Director: Witold de Chevilly Lord Acton (1834–1902) 313 The European Parliament and New Direction assume no responsibility for the opinions expressed in this publication.
    [Show full text]
  • Econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Gylfason, Thorvaldur Working Paper Monetary and Fiscal Management, Finance, and Growth CESifo Working Paper, No. 1118 Provided in Cooperation with: Ifo Institute – Leibniz Institute for Economic Research at the University of Munich Suggested Citation: Gylfason, Thorvaldur (2004) : Monetary and Fiscal Management, Finance, and Growth, CESifo Working Paper, No. 1118, Center for Economic Studies and ifo Institute (CESifo), Munich This Version is available at: http://hdl.handle.net/10419/76552 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu MONETARY AND FISCAL MANAGEMENT, FINANCE, AND GROWTH THORVALDUR GYLFASON CESIFO WORKING PAPER NO. 1118 CATEGORY 5: FISCAL POLICY, MACROECONOMICS AND GROWTH JANUARY 2004 An electronic version of the paper may be downloaded • from the SSRN website: www.SSRN.com • from the CESifo website: www.CESifo.de CESifo Working Paper No.
    [Show full text]
  • Competitiveness & Diversification
    Internati onal Policy Conference Proceedings Competi ti veness and Diversifi cati on: Strategic Challenges in a Petroleum-Rich Economy 14-15th March 2011, Accra, Ghana Disclaimer: This document has been produced without formal United Nations editing. The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as “developed”, “industrialized” and “developing” are intended for statistical conveni- ence and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. Mention of firm names or commercial products does not constitute an endorsement by UNIDO. The opinions, statistical data and estimates contained in signed articles are the responsibility of the author(s) and should not necessarily be considered as reflecting the views or bearing the endorsement of UNIDO. Although great care has been taken to maintain the accuracy of information herein, neither UNIDO nor its Member States assume any responsibility for consequences which may arise from the use of the material. International Policy Conference Proceedings Competitiveness and Diversification: Strategic Challenges in a Petroleum-Rich Economy
    [Show full text]
  • The 2008 Icelandic Bank Collapse: Foreign Factors
    The 2008 Icelandic Bank Collapse: Foreign Factors A Report for the Ministry of Finance and Economic Affairs Centre for Political and Economic Research at the Social Science Research Institute University of Iceland Reykjavik 19 September 2018 1 Summary 1. An international financial crisis started in August 2007, greatly intensifying in 2008. 2. In early 2008, European central banks apparently reached a quiet consensus that the Icelandic banking sector was too big, that it threatened financial stability with its aggressive deposit collection and that it should not be rescued. An additional reason the Bank of England rejected a currency swap deal with the CBI was that it did not want a financial centre in Iceland. 3. While the US had protected and assisted Iceland in the Cold War, now she was no longer considered strategically important. In September, the US Fed refused a dollar swap deal to the CBI similar to what it had made with the three Scandinavian central banks. 4. Despite repeated warnings from the CBI, little was done to prepare for the possible failure of the banks, both because many hoped for the best and because public opinion in Iceland was strongly in favour of the banks and of businessmen controlling them. 5. Hedge funds were active in betting against the krona and the banks and probably also in spreading rumours about Iceland’s vulnerability. In late September 2008, when Glitnir Bank was in trouble, the government decided to inject capital into it. But Glitnir’s major shareholder, a media magnate, started a campaign against this trust-building measure, and a bank run started.
    [Show full text]
  • Macroeconomic Dynamics Vol
    Macroeconomic Dynamics Vol. 17, No. 7, October 2013 Pages 1367–1542 17, No. 7, October 2013 Pages Dynamics Vol. Macroeconomic VOLUME 17, NUMBER 7, OCTOBER 2013 MACROECONOMIC DYNAMICS Volume 17, Number 7, October 2013 Contents ARTICLES Public Intrastructure and Externalities in U. S. Manufacturing: Evidence from the Price-Augmenting AIM Cost Function Guohua Feng and Apostolos Serletis 1367 Binding Minimum Wage as an Equilibrium Selection Device Julie Beugnot 1411 Growth and Firm Dynamics with Horizontal and Vertical R&D MACROECONOMIC Pedro Mazeda Gil, Paulo Brito, and Oscar Afonso 1438 Credit Frictions and Firm Dynamics Zheng Zeng 1467 DYNAMICS Alternative Government Spending Rules: Effects on Income Inequality and Welfare G. C. Lim and Paul D. McNelis 1496 NOTES Note on Ergodic Chaos in the RSS Model Paulo S. A. Sousa 1519 A Note on Credit Market Development and Human Capital Accumulation Wai-Hong Ho 1525 EDITOR: WILLIAM A. BARNETT Downloaded from https://www.cambridge.org/core. IP address: 170.106.202.58, on 30 Sep 2021 at 12:05:01, subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/S1365100513000539 113651005_17-7.indd3651005_17-7.indd 1 99/3/13/3/13 55:00:00 PPMM MACROECONOMIC DYNAMICS MACROECONOMIC DYNAMICS Editor: William A. Barnett, University of Kansas, Department of Economics, 356 Snow Hall, 1460 Jayhawk Notes for Contributors Boulevard, Lawrence, KS 66045–7523, USA, and The Center for Financial Stability, 1120 Avenue of the Americas, 4th Floor, New York, NY 10036, USA. Book Review Editors: Michele Boldrin, Department of Economics, Washington University, One Brookings Contributions.
    [Show full text]
  • Ten Years After: Iceland's Unfinished Business
    18 October 2018 Ten Years After: Iceland´s Unfinished Business Thorvaldur Gylfason* 1. Introduction This study discusses the economic, political, and judicial aftermath of Iceland´s financial collapse in 2008. It considers lessons learned, or not learned, with emphasis on unsettled issues concerning the distribution of incomes and wealth, banking, and politics. The study makes three main points. First, the measurement of income flows and living standards needs to be adjusted in two respects. Just as assets must be assessed in two dimensions, in terms of their returns and risk, national incomes and wealth need to be gauged in terms of their level as well as their dispersion across the population. This is hard to do. Commonly used measures of the distribution of incomes and wealth are incomplete for two reasons. They customarily include only income from labor but not from capital and private wealth in tax havens and such is significantly underreported. Zucman (2013) reported that nearly $6 trillion of global household financial wealth goes unreported, at the time equivalent roughly to ten percent of world GDP (see also Zucman 2015). Further, macroeconomic flows and stocks, incomes and wealth, need to be assessed side by side because high incomes can be misleading if they are sustained by the depletion of stocks (natural resources, net foreign assets, social capital, etc.). This means that observers need beware of extolling the beauty of volcanoes that are about to erupt – as the IMF learned the hard way when its staff wrote as follows in 2007 (Wagner 2010, 11): Iceland’s medium-term prospects remain enviable.
    [Show full text]
  • Institute of Economic Studies
    ISSN 1011-8888 INSTITUTE OF ECONOMIC STUDIES WORKING PAPER SERIES W07:13 December 2007 Growing apart? A tale of two republics: Estonia and Georgia. Thorvaldur Gylfason and Eduard Hochreiter Address: Thorvaldur Gylfason Faculty of Economics and Business Administration University of Iceland Oddi, at Sturlugata, 101 Reykjavik Iceland Email: [email protected] Address: Eduard Hochreiter Joint Vienna Institute Mariahilferstrasse 97 A-1060 Vienna Email: [email protected] Growing Apart? A Tale of Two Republics: Estonia and Georgia Thorvaldur Gylfason University of Iceland, CEPR, and CESifo and Eduard Hochreiter Joint Vienna Institute November 2007 Abstract 1 We compare and contrast the economic growth performance of Estonia and Georgia since the collapse of the Soviet Union in 1991 in an attempt to understand better the extent to which the growth differential between the two countries can be traced to increased efficiency in the use of capital and other resources (intensive growth) as opposed to brute accumulation of capital (extensive growth). We infer that advances in education at all levels, good governance, and institutional reforms have played a more significant role in raising economic output and efficiency in Estonia than in Georgia which remains marred by various problems related to weak governance in the public and private spheres. Keywords: Economic growth, governance, transition economies JEL numbers: O16 1 We would like to thank Nikoloz Gigineishvili, Ekke Nõmm, Martti Randveer, and Märten Ross for their detailed comments on an earlier version of the paper. The views expressed in the paper should not be attributed to the institutions with which we are affiliated. 1. Introduction Looking at the fate of the fifteen states that emerged from the Soviet Union, we find it striking how different their economic evolution has been since the collapse of the Soviet Union in 1991.
    [Show full text]
  • The International Economics of Natural Resources and Growth by THORVALDUR GYLFASON*
    2007; 1–2:7–17 The International Economics of Natural Resources and Growth by THORVALDUR GYLFASON* Faculty of Economics and Business Administration, University of Iceland Abstract This article is in three parts. First, it curse. Secondly, an attempt is made to To date, Norway has appeared to be briefly describes the contribution of provide a glimpse of recent empirical mostly free of the worrisome symp- natural resources to economic growth evidence that can be brought to bear toms, such as the Dutch disease, that around the world, pondering the on this question. Thirdly, the article have afflicted many other countries question whether an abundance of discusses the experience of Norway, with abundant natural resources. natural resources is a blessing or a the world’s third largest oil exporter. INTRODUCTION resources, whether fertile land …, or valuable minerals, or oil and gas. It was only after I There was a time when economic geography was a had been in office for some years that I popular subject that was widely taught at uni- recognized … that the decisive factors were versities in Europe and elsewhere. Importantly, the the people, their natural abilities, education old economic geography was the study of raw and training.’’1 materials and their distribution around the world and it assigned a key role to natural resource So how do countries grow rapidly? What does it wealth and raw materials and their ownership and take? Recent economic growth theory suggests trade routes. There was a tendency among several key factors: economic geographers as well as in public consciousness to equate the ownership of those 1) Saving and investment to build up real capital – important resources with economic strength.
    [Show full text]
  • Icelandic Economists: Have They Made a Difference? a Personal View
    For Nationaløkonomisk tidsskrift. Final version, 4 May 1999. Icelandic Economists: Have They Made a Difference? A Personal View by Thorvaldur Gylfason* Abstract This paper offers a personal view of Icelandic economists and the influence they have had on economic policy making in Iceland since the 19th century. The independence hero Jón Sigurðsson (1811-1879) is identified as Iceland’s first economist in a modern sense, even if he was not an economist by training. A brief description of economic developments since home rule was attained from Denmark in 1904 is followed by an attempt to explain, by appealing to considerations of mentality, social psychology, and unbalanced education among other things, why Icelandic economists may perhaps have had less influence than they would have liked. * Research Professor of Economics, University of Iceland; Research Associate, SNS— Center for Business and Policy Studies, Stockholm; and Research Fellow, Center for Economic Policy Research (CEPR), London. Author’s address: Faculty of Economics and Business Administration, University of Iceland, 101 Reykjavík, Iceland. Tel: 354- 525-4500. Fax: 354-552-6806. E-mail: [email protected]. An earlier version of this paper was presented at a conference arranged by the Nordic Economic Research Council in Lillehammer, Norway, June 14-16, 1996. The author is indebted to Thráinn Eggertsson, Gylfi Th. Gíslason, Rögnvaldur Hannesson, Guðmundur Hálfdanarson, Arne Jon Isachsen, Lars Jonung, Guðmundur Ólafsson, and Agnar Sandmo for their detailed comments on earlier versions of the paper, but, to an even larger extent than usual, they bear no responsibility for the views expressed. 1 Icelandic Economists: Have They Made a Difference? A Personal View According to the registry of the Icelandic Economic Association, there are now about 2,400 economists in Iceland.
    [Show full text]
  • Biographies of Participants
    Biographies of Participants Annual Colloquium on Fundamental Rights Media Pluralism and Democracy 26-27 November 2018 Justice and Consumers The biographies were sent by the participants. The European Commission is not responsible for the content. ACHEN Christopher H. Chris Achen holds the Roger Williams Straus Chair of Social Sciences at Princeton University. His primary research interests are public opinion, elections, and the realities of democratic politics. He is the author or co-author of six books, including Democracy for Realists (with Larry Bartels) in 2016, which has received widespread discussion and several awards. He has also published many articles. He is a member of the American Academy of Arts and Sciences, and has received fellowships from the Center for Advanced Study in the Behavioral Sciences, the National Science Foundation, and Princeton's Center for the Study of Democratic Politics. He was the founding president of the Political Methodology Society, and he received the first career achievement award from The Political Methodology Section of The American Political Science Association in 2007. He has served on the top social science board at the American National Science Foundation, and he was the chair of the national Council for the Inter-University Consortium for Political and Social Research (ICPSR) from 2013-2015. He is also the recipient of awards from the University of Michigan for lifetime achievement in training graduate students and from Princeton University for graduate student mentoring. AFANASJEVA Sonja Sonja Afanasjeva is policy officer in the Secretariat of the Young European Federalists (JEF Europe). Working closely with the Executive Board, she carries out advocacy work towards the European institutions and civil society, in Brussels and beyond, in order to further promote the idea of a free, united and democratic Europe.
    [Show full text]
  • Thorvaldur Gylfason, Iceland
    www.li.com www.prosperity.com PROSPERITY IN DEPTH: ICELAND Iceland, Rising from the Ashes By Thorvaldur Gylfason THE 2012 LEGATUM PROSPERITY INDEX™ RANKING: ICELAND 15/142 GLOBAL TRANSITIONS PROSPERITY STUDIES THE LEGATUM INSTITUTE Based in London, the Legatum Institute (LI) is an independent non- partisan public policy organisation whose research, publications, and programmes advance ideas and policies in support of free and prosperous societies around the world. LI’s signature annual publication is the Legatum Prosperity Index™, a unique global assessment of national prosperity based on both wealth and wellbeing. LI is the co-publisher of Democracy Lab, a journalistic joint-venture with Foreign Policy Magazine dedicated to covering political and economic transitions around the world. PROSPERITY IN DEPTH To complement the Prosperity Index, we commissioned 12 specialists — economists, political scientists, journalists—to provide additional analysis of selected countries. Their studies vary from essays putting contemporary challenges into historical context (Iran, China, Mongolia) to up-to-the-minute surveys of the barriers to economic growth (Egypt, Japan, India) to controversial alternatives to the conventional policy interpretations (Iceland, Colombia, Vietnam). In each case they represent highly original work by distinguished experts that adds depth and insight to the statistical analysis of the Prosperity Index. THE LEGATUM INSTITUTE FOREWORD Iceland is a land of extremes—of glaciers, volcanoes and lunar landscapes, not to mention of level of civility and social cohesion matched in very few places on earth. It is near the top of the charts on the PI sub-indexes for everything from safety and security (1st) to entrepreneurship and opportunity (9th) to personal freedom (10th).
    [Show full text]
  • In Defence of Small States
    ACCOUNTABILITY, TRANSPARENCY AND EFFICIENCY IN DEFENCE OF SMALL STATES HANNES H. GISSURARSON www.europeanreform.org @europeanreform A Brussels-based free market, euro-realist think-tank and publisher, established in 2010 under the patronage of Baroness Thatcher. We have satellite offices in London, Rome and Warsaw. New Direction - The Foundation for European Reform is registered in Belgium as a non-for-profit organisation (ASBL) and is partly funded by the European Parliament. REGISTERED OFFICE: Rue du Trône, 4, 1000 Bruxelles, Belgium. EXECUTIVE DIRECTOR: Naweed Khan. www.europeanreform.org @europeanreform The European Parliament and New Direction assume no responsibility for the opinions expressed in this publication. Sole liability rests with the author. In Defence of Small States Prof Hannes H. Gissurarson AUTHOR TABLE OF CONTENTS 1 INTRODUCTION 7 2 AGAINST SMALL NATIONS: MARX AND ENGELS 8 3 THE PROLIFERATION OF SMALL STATES 11 4 IS ICELAND TOO SMALL? 14 5 ECONOMIC GROWTH AND VOLATILITY 20 6 THE COSTS AND BENEFITS OF SMALL SIZE 22 7 SIZE AND NATURAL DISASTERS 27 8 SIBERT’S ATTACK ON DAVID ODDSSON 28 9 WAS THE CBI LEADERSHIP ACQUIESCENT IN THE FACE OF DISASTER? 30 10 ICELAND RING-FENCED 35 11 NEPOTISM AND CORRUPTION IN SMALL STATES 38 12 POLITICAL PATRONAGE IN ICELAND 40 Prof Hannes H. Gissurarson 13 APPOINTMENTS OF SUPREME COURT JUDGES 44 14 CAUSES OF CORRUPTION 47 Dr Hannes H. Gissurarson, Professor of Politics in the School 15 POLITICAL PATRONAGE IN THE NORDIC COUNTRIES 48 of Social Sciences at the University of Iceland. 16 FAVOURITISM IN THE NORDIC COUNTRIES 51 17 LACK OF EXPERTISE IN SMALL STATES 53 18 THE “SHELTER” THEORY 56 19 IMPLAUSIBLE ACCOUNT OF THE COMMONWEALTH’S DOWNFALL 60 20 WHEN A SHELTER BECOMES A TRAP - THE CASE OF ICELAND 64 21 ENTRAPPED BY ALLIES 66 22 ENTRAPPED BY MULTI-NATIONAL ORGANISATIONS 69 23 STATES AND NATIONS 73 24 RECOMMENDATIONS 79 4 New Direction - The Foundation for European Reform www.europeanreform.org @europeanreform 5 In Defence of Small States Prof Hannes H.
    [Show full text]