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Marc F. Bellemare Posts

Published September 9, 2011

How the Wars of the 21st Century Will Be Fought

Princeton’s Anne-Marie Slaughter, in an essay on warfare past, present, and future:

“The great power wars of the twenty-first century will be fought by special forces: specialised in combat against pirates, terrorists and global criminal networks; in focused search and rescue and search and destroy missions; and in civilian protection units capable of disabling but not destroying an enemy. They will be fought by cyber-warriors, skilled in manipulating unmanned weapons and in deterring and responding to system-wide cyber-attacks. And they will be fought in multilateral coalitions aimed at stopping the wars that criminal governments wage against their own people and bringing individual leaders and their coterie of high-level supporters to justice.”

Published September 8, 2011

Pretending to Be Poor

This is the title of a new paper in Economic Development and Cultural Change by Jean-Marie Baland, Catherine Guirkinger, and Charlotte Mali. Because EDCC does not publish abstracts, here is the abstract of a previous version:

“From field observations of credit cooperatives in Cameroon, we find that a substantial number of members take loans that are fully collateralized by savings they held in the same institutions. 20% of the loans observed fall into this category. The price paid in terms of net interest payments is not negligible as it represents 13% of the amount borrowed. As traditional arguments such as credit rating or time inconsistent preferences cannot explain such behavior in our specific setting, we propose a new rationale based on in-depth interviews with members of the cooperatives. Those interviews indicate that some members systematically use credit as a way to pretend that they are too poor to have available savings. By doing so, they can successfully oppose request for financial help from friends and relatives. We develop a signaling model to analyze the conditions under which this behavior is an equilibrium outcome.”

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