Economics & Global Affairs

Belfer Center experts on the U.S.-China relationship and Middle East issues shared thoughts on the significance of the unexpected Iran-Saudi Arabia agreement brokered by China. 

To keep oil flowing and diminish the U.S., Beijing brokers a deal between Iran and Saudi Arabia.

The popular ESG movement advocates judging firms, not just by what they generate for shareholders in short-term profits, but by their emphasis on environmental, social, and governance goals.  The movement has its detractors, particularly in the United States.  A counter-movement is gathering steam. It would prohibit some financial institutions from investing in firms that follow ESG practices.

To be sure, ESG does warrant some skepticism.  Often, corporate commitments are essentially mere exercises in public relations.  But those who, in the name of economic freedom, would ban private investors from pursuing ESG goals are logically confused.

Efforts to prohibit financial institutions from considering environmental, social, and governance criteria reflect a fundamental misunderstanding of free-market capitalism on the part of its self-proclaimed defenders. If private investors and companies want to pursue ESG goals, it is not politicians' place to interfere.

Ownership of reforms by citizens is often presented as important for success. This paper explores media engagement and support for economic reforms in the Gulf Cooperation Council (GCC) countries using text analysis techniques on publicly available sources. Results show that while reform efforts have intensified in recent years in the GCC, these efforts tend to focus on stronger rather than weaker policy areas, potentially limiting the growth-enhancing effect of reforms. Social media analysis using Twitter shows that the population’s support for reforms has been declining. The analysis of traditional
news media points to more engagement by international than by local media. However, sentiment from international media is less positive about economic reforms in the GCC. Sentiment in international media and social media matters, as evidenced by its positive and strong correlation with FDI inflows into the GCC.

The US federal debt hit its legal limit, $31.4 trillion, on Thursday, January 19, 2023.  Everyone feels that they have seen this movie before: there is no need for alarm because the politicians will strike a deal at the last moment.  But this time, the movie could well end tragically, as a result of the intransigence of Republicans in Congress.  It is likely that they will refuse to raise the debt ceiling until after they have driven the car over the cliff.  This could mean a once unthinkable default by the US government.  Unfortunately, letting them do that may be the best strategy available to President Joe Biden when the time comes.

The economist and HKS professor is passionate about solving what may be humanity's most important and perplexing problem: How to untangle fossil fuels from the global economy.

On December 3, 2022, Nicola De Blasio, Senior Fellow with the Belfer Center’s Environment and Natural Resources Program (ENRP), chaired a panel discussion, “Is Hydrogen Our Future?,” at the Rome MED – Mediterranean Dialogue (Rome MED), an annual high-level conference on Mediterranean geopolitics. The panel discussion was part of ENRP’s Future of Hydrogen project’s ongoing engagement with global policymakers, who are increasingly viewing hydrogen as a solution to meeting their decarbonization and energy security goals. 

Stephen Walt analyzes why China's foreign-policy reset will—or won't—work out.

China’s Belt and Road Initiative (BRI) has for years held a prominent position in the global infrastructure investment space. In the absence of similarly far-reaching projects coordinated by other countries including the transatlantic partners, important questions about the BRI’s implications for Europe and America arise. Given U.S.-China competition pulling the EU in two directions and opposing approaches among member states vis-à-vis China amid a globally growing infrastructure investment gap, the need for a liberally motivated large-scale infrastructure investment approach is clear. This alternative model of advancing economic development goals stands in opposition to the BRI’s approach of creating economic dependence on China through massive recipient country debt thereby increasing Chinese geopolitical power.