Technology policy and defense conversion in Israel, 1967–1995

Technology policies and their effect on technology transfer from defense to civilian industries in Israel from 1967 to 1995 are explored. Defense technology policy is found to drive the growth of the defense industry and to limit defense conversion to commercialization initiatives developed primarily through intra-organizational technology transfer. The case of the Israel Aircraft Industries (IAI) is presented. Also the development of national technology policy in Israel is traced and found wanting. Civilian and defense technology policies are found to be uncoordinated with each other and together are incapable of producing interorganizational technology transfer so as to significantly effect defense conversion on a wide number of economic actors particularly small firms. To achieve a socially effective defense conversion process (in which technologies are transferred from defense firms to many economic actors), the analysis suggests that a national technology policy should be designed and implemented under Prime Minister's leadership.     

On the value of formal assessment of uncertainty in regulatory analysis

The US Office of Management and Budget introduced in 2003 a new requirement for the treatment of uncertainty in Regulatory Impact Analyses (RIAs) of proposed regulations, requiring agencies to carry out a formal quantitative uncertainty assessment regarding a regulation’s benefits and costs if either is expected to reach $1 billion annually. Despite previous use in other contexts, such formal assessments of uncertainty have rarely been employed in RIAs or other regulatory analyses. We describe how formal quantitative assessments of uncertainty – in particular, Monte Carlo analyses – can be conducted, we examine the challenges and limitations of such analyses in the context of RIAs, and we assess how the resulting information can affect the evaluation of regulations. For illustrative purposes, we compare Monte Carlo analysis with methods typically used in RIAs to evaluate uncertainty in the context of economic analyses carried out for the US Environmental Protection Agency’s Nonroad Diesel Rule, which became effective in 2004.     

Books in review

He has also served as research director of the Guggenheim Foundation from 1972–1984. Among his books are Men in Groups; The Imperial Animal(with Robin Fox); The Manufacture of Evil;and The Pursuit of Pleasure.     

Latin America in a time of global financial turmoil∗

Following the financial turmoil in Asia and Russia, Latin America has suffered dramatic setbacks, including major economic slowdown, threats to democratization, and worsening social conditions. For the medium term, neither prosperity nor political stability are assured, says Abraham F. Lowenthal, founding president of the Pacific Council on International Policy at the University of Southern California, Los Angeles. Lowenthal identifies three positive shifts that have occurred in the region over the past few years: a convergence among economic policymakers on the main tenets of sound policy; an even more widespread embrace of constitutional democracy as an ideal; and a growing disposition on the part of Latin American nations toward pragmatic cooperation with each other and with the industrialized countries, including the United States.     

Bundled Discounts, Leverage Theory, and Downstream Competition

Under plausible circumstances, a monopolist in one market canuse its control of prices in that market to force competingdownstream buyers to sign tying contracts that will lever itsmonopoly into another market. Specifically, the monopolist ofthe tying good can place each downstream buyer in a prisoner'sdilemma by offering them more favorable pricing on the tyinggood if they sign a requirements-tying contract covering thetied good. Since a buyer benefits on receiving more favorablepricing on the tying good and the competitors do not, and suffersif the competitors receive more favorable pricing on the tyinggood and the buyer does not, buyers will sign the tying contracteven when they would earn higher profits if they all refusedto sign. This enables a monopolist in one market to inefficientlyexclude an entrant in another market.