Jonathan Lipow

Real and ideal water rights:the prospects for water-rights reform in Israel, Gaza, and the West Bank

The ideal water contract for a heterogeneous population of users is a prioritized right that is fully vested and fully tradable. A set of tradable, prioritized rights contracts will span the same space as the Debreu contingent commodities. Therefore, they lead to a competitive equilibrium that is Pareto optimal. Equal sharing of water shortfalls does not have this property. Existing water policies in Israel and the Disputed Territories are not characterized by an efficient set of water contracts. The system misallocates water over both time and space. Current policies are driven by strategic and ideological objectives. With peace, reform of water policies will become politically feasible. The paper concludes with a proposal for a new water-allocation system.

Military Conscription and the (Socially) Optimal Number of Boots on the Ground

In this article, we develop a model of military manpower mobilization. We use the model to evaluate the efficacy of volunteer- and conscription-based manpower systems within a framework of social welfare maximization. We find that neither conscription nor a volunteer approach is likely to be “first best” because of asymmetries of information and constraints on the military pay structure. We then modify the general model by considering the possibility that recruits with high civilian productivity are also more capable soldiers and find that, under such circumstances, conscription may be a more benign form of manpower mobilization than previously understood. We also consider and evaluate various alternatives available to militaries attempting to minimize the welfare losses associated with manpower mobilization.

The Impact of Electronic Financial Payments on Crime

In this paper, we test the hypothesis that access to electronic payments may reduce crime. Our results suggest that there is a negative and significant statistical relationship between access to electronic payments and the incidence of economic crimes such as robbery and burglary, while electronic transactions do little to reduce the incidence of non-economic crimes such as homicide and rape. This paper provides evidence that policies and technologies that enable the proliferation of cashless transactions have the desired impact of deterring crime.

Can Afghanistan avoid the Natural Resource Curse

Recent discoveries of significant mineral deposits offer Afghanistan the opportunity to attain a level of economic development sufficient to stabilize that countrys volatile security situation while providing Afghans with a reasonable standard of living. Much, however, depends on whether Afghanistan can avoid the “Natural Resource Curse,” an inter-related set of economic and social pathologies that often bedevil resource-endowed countries. In this article, the authors describe the Natural Resource Curse, evaluate the obstacles it raises for Afghan economic development, and offer a strategy to minimize the risks Afghanistan faces in its efforts to exploit its mineral wealth for the benefit of the population.

Did Monetary Forces Help Turn the Tide in Iraq

Back in 2006 and 2007, the conventional wisdom was that the United States and its allies faced imminent defeat in Iraq. Remarkably, however, that is not the way things have turned out. By every available metric, the security situation in Iraq has improved over the past three years.For example, the total annual number of fatalities sustained by American troops in Iraq ran between 822 and 904 for the period between 2004 and 2007 but declined to 150 in 2009. As for the Iraqis, average civilian fatalities have declined from 72 per day in 2006 and 61 per day in 2007 to 7.2 per day in December 2009. What accounts for the marked improvement in Iraqi security conditions? There are two probable explanations widely discussed in the media. The first is that the new American strategy popularly known as “The Surge” turned the tide of battle. The second is that the poor personal conduct of foreign insurgent fighters alienated many Iraqis who had previously supported their common cause, leading to what became known as “The Awakening” – a series of organized mass insurgent defections. In this article, a new – but certainly not exclusive – explanation is offered for the evolution of the conflict in Iraq and the improvement in security conditions. It is argued that the extraordinary appreciation in the real value of the Iraqi dinar over the past six years may have contributed greatly to the Coalition’s success in reducing insurgent violence. The argument is simple: the real appreciation of the dinar eroded the value of foreign funds that insurgents were using to finance their operations. As a result, insurgents found it necessary to transition to forms of domestic fund raising such as crime and extortion. These forms of fund raising inflicted a lot of hardship on Iraq’s civilian population, and this in turn undermined support for the insurgency. There are five sections: an Introduction is provided in Section 1. In Section 2, the financial needs and economic vulnerabilities of insurgent groups are discussed, with a Defense & Security Analysis Vol. 26, No. 2, pp. 181–188, June 2010

Managerial reputation and the 'endgame'

This paper examines endgame behavior, specifically the behavior of managers whose primary concern is to retain their jobs. Managers are taken to be of two types, good and bad, and only one manager is randomly selected as the firms first-period manager. The manager unobservably chooses the mean and standard deviation (limited by a mean-standard deviation frontier) of the process that generates his observable performance. The good manager can choose higher values of the mean of the outcome-generating process, for given standard deviation, than the bad manager can. After the first of the two periods, the firms owner must choose to retain or replace her manager based upon performance. In an endgame-perfect Bayesian equilibria of this reputation game, a good manager chooses a strategy with minimal standard deviation for a given mean while a bad manager chooses a strategy of maximal standard deviation for a given mean. Examples of this type of behavior drawn from finance and sports are given in the paper. The perfect Bayesian equilibria of this game also include conservative, reckless, and herd managerial behavior.

Trade, tariffs and terrorism

Insurgencies and terrorist activities are often dependent on foreign sources of funding. When this is the case, trade barriers such as import tariffs can prove to be an effective means of combating violence and enhancing social welfare. In this article, we identify the optimal tariff for a country facing an externally financed insurgency.

Economic and Security Implications of Afghanistan's Newly Discovered Mineral Wealth

The USDepartment of Defense (DoD) recently held a special “on the record” briefing for reporters that focused on economic challenges and opportunities in Afghanistan. While the briefing touched upon many of the structural challenges facing the Afghan economy, the real emphasis was to outline findings by the US Geological Survey (USGS) on vast mineral deposits discovered in Afghanistan. The USGS’s headline numbers, widely reported in the media, are startling. The value of natural resource deposits identified in Afghanistan was estimated to be

Send Me: Racial Selection in Deployment to Iraq and Afghanistan

1.13 trillion at current prices:

Hard lessons: combat deployment and veteran interest in higher education

908 billion in minerals such as copper and iron ore, and