Books

Here is where I list books and/or peri­od­i­cals I’ve been read­ing that I think any­one inter­ested in the field would ben­e­fit from read­ing. As an avid reader I wel­come any suggestions!

Peri­od­i­cals

First and fore­most if you are not read­ing The Econ­o­mist you need to be!  If you stud­ied polit­i­cal the­ory you’ll rec­og­nize very quickly the “social lib­er­al­ism” that imbues the views of this “news­pa­per.”  Unfor­tu­nately, it is also one of those peri­od­i­cals that peo­ple claim to read far more than they actu­ally do, so when I meet another reader and get excited usu­ally they claim to have not “read that/those article(s).”  Besides their dry wit and superb cov­er­age from through­out the world they also pro­vide myr­iad points of learn­ing from their “Finance and Eco­nom­ics” sec­tion.  I’d sug­gest pow­er­ing through it and then look­ing online for mate­r­ial you have trou­ble with so that you con­stantly keep learn­ing.  They typ­i­cally do a decent job in break­ing down the terms for lay­men. This news­pa­per above any other I would sug­gest read­ing if you’re pressed for time.

In terms of inter­na­tional polit­i­cal cov­er­age I have yet to find a daily news­pa­per that can even come close to the Finan­cial Times.  The “pink paper” splits their major news from their “Com­pa­nies and Mar­kets” sec­tion which I usu­ally just browse.  Their Op-Eds include Mar­tin Wolf, Gideon Rach­man, Clive Crook, John Gap­per, Gillian Tett, Niall Fer­gu­son and they reg­u­larly have con­tri­bu­tions from other impor­tant indi­vid­u­als (e.g. Pas­cal Lamy, Hillary Clin­ton, etc.).  They cover the IMF/WB like no other paper I’ve tried (i.e. NYT, WSJ, IHS) and fre­quently expand on the con­se­quences of the news.  I started read­ing this paper in 2006 and haven’t stopped since.  They gave me a firm under­stand­ing of the finan­cial cri­sis of which I wouldn’t be able to under­stand much inter­na­tional news.  CDOs, CDSs, MBSs, and other ini­tials all make sense to me whereas I imag­ine I might have labored much longer oth­er­wise to under­stand them.  As a bonus their FT Week­end cov­er­age comes on Sat­ur­day and is almost always good!

Books

This is the book to read if you are inter­ested in polit­i­cal risk.  It is an excel­lent primer for those look­ing to under­stand the field and how it works.  It intro­duces you to his­tory and con­cepts that are def­i­nitely “looked over” in most his­tory books, even eco­nomic his­tory books.  Some of the things that I learned among many others:

• Between 1836–39 seven US states defaulted;
• After World War I the U.S. gov­ern­ment expro­pri­ated Ger­man busi­nesses for repa­ra­tions, specif­i­cally Bayer;
• Addi­tion­ally, sev­eral prin­ci­ples were explained, such as expro­pri­a­tion, nation­al­iza­tion, eco­nomic macrorisk, eco­nomic microrisk, divest­ment pres­sure, and others.

Seri­ously, if there’s a book to read — this is it.

I was intrigued with Argentina’s default years ago and finally got around to read­ing this book.  I remem­ber it was dur­ing a col­lege class that a peer made a dec­la­ra­tion about aban­don­ing a coun­try which made me won­der how and whether such a fate could occur to any state, even ours (US.…too cheesy).  Blus­tein writes with a style usu­ally reserved for non-business books and takes the time to explain any busi­ness or tech­ni­cal terms when he intro­duces it.  His def­i­n­i­tion of bond yields, in par­tic­u­lar, is an exam­ple of how he makes recon­dite mate­r­ial sim­ple to under­stand.  The intro­duc­tion of key indi­vid­u­als reminds me of the bio­graph­i­cal sketches that the NYer does so well, but Blus­tein keeps the infor­ma­tion to what’s essen­tial and doesn’t start over­bur­den­ing the reader with the birth­places of every per­son involved.  With­out such infor­ma­tion the quotes pro­vided would seem bland and the emo­tional exchanges would seem banal.  Larry Sum­mers comes across much nicer than any por­trait I’ve read of him and is the first time I’ve read some­thing about him where “diet cokes” aren’t men­tioned.  (I’m never sure why writ­ers do that, as if by not men­tion­ing the diet cokes I’ll think the writer hasn’t actu­ally met him, just pick another attribute of his personality/habits to high­light!!)  Blus­tein views the G7 as almost omnipo­tent, espe­cially the US, within the IMF.  His dis­cus­sion about dis­sent with­ing the Fund seems short-sighted until about halfway through the book when he finally pro­vides the most sen­si­ble rea­son dis­sent isn’t aired to the pub­lic: that any doubts about the “pro­grams” the Fund orga­nizes with states could spread fur­ther doubt about a state’s already ten­u­ous grasp on its finances. Stiglitz has been known for ques­tion­ing the unde­mo­c­ra­tic char­ac­ter of the IFIs (Inter­na­tional Finan­cial Insti­tu­tions) and his crit­i­cisms were brought to mind when read­ing how British and Cana­dian dis­sent on Argentina’s abil­ity to repay the loan were brought up.  In fair­ness, the fact that dis­sent is allowed, just not pub­li­cized, seems to me to be demo­c­ra­tic and ulti­mately all vot­ing is done by a state’s quota or con­tri­bu­tion which also seems some­what fair; although how could it not be to an Amer­i­can since our stake, while not a major­ity, is siz­able enough to block any plans unde­sir­able to a US admin­is­tra­tion.  Although he explains why a dis­torted sys­tem pro­vides incen­tives for the provinces to spend prof­li­gately (gov­er­nors get roughly half their income from the fed­eral gov­ern­ment, so blame for high taxes is focused on Buenos Aires instead of on their provin­cial cap­i­tal that is cre­at­ing the rea­sons for such taxes) he never explains why Argentina con­tin­ued to sell so many bonds.  At a cer­tain point it becomes obvi­ous that like some­one who must con­stantly shift their bal­ances to new cards to avoid actu­ally pay­ing the prin­ci­pal, Argentina needed to keep “refi­nanc­ing” its debt since there was lit­tle money to pay down the actual bal­ance.  But how and why Argentina got itself into this sit­u­a­tion in the first place (i.e. a mas­sive infra­struc­ture project, ben­e­fits, etc?) was not explored suf­fi­ciently.  Over­all the book is a suf­fi­cient primer on how the sit­u­a­tion arose and was (mis)handled by the inter­na­tional com­mu­nity and the dan­gers of inter­na­tional cap­i­tal flight.

What hap­pens to a busi­ness whose prod­uct is mis­used by their home nation’s geopo­lit­i­cal rival? This issue is tack­led with the nuance and the nec­es­sary con­text to illus­trate the impor­tance that polit­i­cal risk plays in volatile mar­kets. With­out tak­ing the time to invest in the proper insur­ance, the investors in Inger­soll Rand would have been left to incur much more sig­nif­i­cant dam­age then they ulti­mately had to. (2009, 56)

Read­ing Lists
Daniel Drezner’s “Top 10 IPE Books” 
Daniel Drezner’s “Top 10 PE Books of 2009″
Fareed Zakaria’s “Sug­gested Booksfrom GPS” 
For­eign Affairs’”What to read on Oil.“
For­eign Policy’s “The FP Global Thinkers Book Club“
Wal­ter Rus­sell Mead’s “The Mead List.”