Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Friday, August 26, 2005

Comparisons between the USA and UAE

John Chilton, The Emirates Economist, has a list of comparisons between the United States and the United Arab Emirates.

Some parallels between the sources of success of the federal system in the UAE and the USA can be made. For example,

  • The USA was formed by the voluntary association of the 13 colonial states; the UAE was formed by the voluntary association of 7 independent emirates.
  • In both countries the individual states/emirates saw there was a political and economic gain to unifying and ceding control to a central government for joint protection from foreign intervention, and to reign in destructive barriers to trade between states/emirates.
  • The USA had George Washington; the UAE had Sheik Zayed. Both founding leaders were highly respected by large majorities of their citizens.
  • The USA and the UAE both experienced huge immigration -- the difference here being that in the UAE few of these immigrants have gained citizenship.
  • In the USA and the UAE the ethnic and sectarian diversity within each state/emirate was not dissimilar to the diversity between the states/emirates.
  • In the USA and the UAE states/emirates were delegated considerable discretion to handle local affairs locally.
  • The US left some questions of major conflict unresolved. Less than 100 years after its founding a very bloody civil war was fought over those issues. When that war ended the central government gained considerable power, including a greatly expanded ability to tax (and thereby redistribute). In the UAE the oil wealth centralized in Abu Dhabi has been used for the same redistributive purposes to as a carrot and stick to defuse conflict.
Re: EmEc's last point. In Canada, we have not resolved the major conflicts (Quebec; oil revenues in Nfld and Alberta; trade stances; etc.). So far a stronger central gubmnt has not done very well at helping to resolve them, either. And I really doubt that Alberta Premier, Ralph Klein, will want (himself or to allow the federal gubmnt) to use Alberta oil revenues "as a carrot and stick to defuse conflict". See this from the Globe and Mail (reg. req'd):

"We are doing more than our fair share, so keep your hands off," Mr. Klein said, later adding that other provinces could keep up to Alberta by becoming more economically competitive.

His warning was partly brought on by Ontario Premier Dalton McGuinty's recent musing that Alberta's wealth is becoming "the elephant in the room" and that the growing regional economic disparity needs to be addressed.
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