Az egyensúlyi ráták unicitása és a bérráta pozitivitása a Neumann-modell általánosításaiban (Uniqueness of equilibrium rates and the positive value of the wage rate in generalizations from the Neumann model)

Cikkünk arról a paradox jelenségről szól, hogy a fogyasztást explicit módon megjelenítő Neumann-modell egyensúlyi megoldásaiban a munkabért meghatározó létszükségleti termékek ára esetenként nulla lehet, és emiatt a reálbér egyensúlyi értéke is nulla lesz. Ez a jelenség mindig bekövetkezik az olyan dekomponálható gazdaságok esetén, amelyekben eltérő növekedési és profitrátájú, alternatív egyensúlyi megoldások léteznek. A jelenség sokkal áttekinthetőbb formában tárgyalható a modell Leontief-eljárásra épülő egyszerűbb változatában is, amit ki is használunk. Megmutatjuk, hogy a legnagyobbnál alacsonyabb szintű növekedési tényezőjű megoldások közgazdasági szempontból értelmetlenek, és így érdektelenek. Ezzel voltaképpen egyrészt azt mutatjuk meg, hogy Neumann kiváló intuíciója jól működött, amikor ragaszkodott modellje egyértelmű megoldásához, másrészt pedig azt is, hogy ehhez nincs szükség a gazdaság dekomponálhatóságának feltételezésére. A vizsgált téma szorosan kapcsolódik az általános profitráta meghatározásának - Sraffa által modern formába öntött - Ricardo-féle elemzéséhez, illetve a neoklasszikus növekedéselmélet nevezetes bér-profit, illetve felhalmozás-fogyasztás átváltási határgörbéihez, ami jelzi a téma elméleti és elmélettörténeti érdekességét is. / === / In the Marx-Neumann version of the Neumann model introduced by Morishima, the use of commodities is split between production and consumption, and wages are determined as the cost of necessary consumption. In such a version it may occur that the equilibrium prices of all goods necessary for consumption are zero, so that the equilibrium wage rate becomes zero too. In fact such a paradoxical case will always arise when the economy is decomposable and the equilibrium not unique in terms of growth and interest rate. It can be shown that a zero equilibrium wage rate will appear in all equilibrium solutions where growth and interest rate are less than maximal. This is another proof of Neumann's genius and intuition, for he arrived at the uniqueness of equilibrium via an assumption that implied that the economy was indecomposable, a condition relaxed later by Kemeny, Morgenstern and Thompson. This situation occurs also in similar models based on Leontief technology and such versions of the Marx-Neumann model make the roots of the problem more apparent. Analysis of them also yields an interesting corollary to Ricardo's corn rate of profit: the real cause of the awkwardness is bad specification of the model: luxury commodities are introduced without there being a final demand for them, and production of them becomes a waste of resources. Bad model specification shows up as a consumption coefficient incompatible with the given technology in the more general model with joint production and technological choice. For the paradoxical situation implies the level of consumption could be raised and/or the intensity of labour diminished without lowering the equilibrium rate of the growth and interest. This entails wasteful use of resources and indicates again that the equilibrium conditions are improperly specified. It is shown that the conditions for equilibrium can and should be redefined for the Marx-Neumann model without assuming an indecomposable economy, in a way that ensures the existence of an equilibrium unique in terms of the growth and interest rate coupled with a positive value for the wage rate, so confirming Neumann's intuition. The proposed solution relates closely to findings of Bromek in a paper correcting Morishima's generalization of wage/profit and consumption/investment frontiers.

Állami támogatások és gazdasági teljesítmény. Támogatás-túladagolás a magyar gazdaságfejlesztésben? (An overdose of state aid in the Hungarian economy)

Magyarországon az elmúlt évtizedben a vállalatoknak nyújtott állami támogatás GDP-arányosan számolva az európai uniós átlag 2,7-szerese volt. A cikk megvizsgálja, hogy a támogatások hatása megjelenik-e a magyar gazdaság beruházási, foglalkoztatási, jövedelemtermelési teljesítményében és versenyképességében. Arra a következtetésre jut, hogy egyik területen sem jobb a helyzet, mint azokban az országokban, amelyekben lényegesen alacsonyabb a támogatási arány. A mikroszintű elemzések, értékelések sem támasztják alá azt a vélekedést, hogy az állami támogatások érzékelhetően javítják a gazdasági teljesítményt. A források bősége önmagában is okoz hatékonysági problémákat, mert sok program és szervezet versenyez egymással. A rossz (gyengébb hatékonysági követelményeket támasztó) programok kiszorítják a jó programokat. Ha a versenyképességet érdemben befolyásoló tényezők, például a kedvező jogi szabályozási környezet és az üzleti szolgáltatások jól működő piacai nem adottak, akkor ezek hiányát nem ellensúlyozza a támogatások magas szintje. Magyarország az idén indult hétéves programozási időszakban tovább kívánja növelni a vállalatoknak nyújtott állami támogatások mértékét, miközben nincs egyértelmű válasz arra a kérdésre, hogy milyen módon növelhető a támogatási rendszer jelenleg alacsony hatékonysága. _____ State aid given to enterprises as a proportion of Hungary�s GDP has been 2.7 times the EU average over the past decade. The article examines whether any impact of this high level of state aid can be discerned in investment, employment, income- generation performance, or competitiveness of the Hungarian economy. It seems that in none of these areas is the situation better than in countries that have a markedly lower rate of state aid. Micro-level analyses and evaluations do not support the belief that state aid appreciably improves economic performance. A wealth of resources on its own can cause problems with efficiency, as many programs and organizations compete with each other. Bad (less demanding) programs nudge out the good ones. If the factors significantly determining competitiveness, including a favourable legal and regulatory environment and well-functioning markets of business services, are not in place, a high level of state aid cannot be a proxy for them. In the seven-year programming period beginning this year, Hungary plans to further increase the amount of state aid to enterprises, while there is no clear answer as to how to improve the currently poor efficiency of the state aid system.

Economic reform, allocative effiency and terms of trade

It has widely been agreed that the distorted price system is one of the causes of inefficient ecooomic decisions in centrally planned economies. The paper investigates the possible effect of a price reform on the allocation of resources in a situation where micro-efficiency remains unchanged. Foreign trade and endogenously induced terms-of-trade changes are focal points ín the multisectoral applied general equilibrium analysis. Special attention is paid to some methodological problems connected to the representation of foreign trade in such models. The adoption of Armington's assumption leads to an export demand function and this in turn gives rise to the question of optimal export structure, different from the equilibrium one-an aspect so far neglected in the related literature. The results show, that the applied model allows for a more flexible handling of the overspecialization problem, than the linear programming models. It also becomes evident that the use of export demand functions brings unwanted terms-of-trade changes into the model, to be avoided by a suitable reformulation of the model. The analysis also suggests, that a price reform alone does not significantly increase global economic efficiency. Thus the effect of an economic reform on micro-efficiency appears to be a more crucial factor. The author raises in conclusion some rather general questions related to the foreign trade practice of small open economies.

Resource-based view and dynamic capabilities - Achieving competitive advantage through internal resources and competences

Strategy has always been important for success. Whether strategy is applied for military purposes, in large firms, or even for personal objectives, there are certain key characteristics that every successful strategy carries on: clear, objective and simple goals; deep knowledge and understanding of the competitive environment; objective understanding and exploitation of resources; and an effective plan implementation. In this paper, the author’s attention will be focused on the role of internal resources, routines and processes as the bases of sustained competitive advantage (hereafter SCA) into what is now known as the resourcebased view of the firm (RBV) and Dynamic Capabilities (DC). First, the relevance of RBV and DC approaches and the main characteristics of those are briefly mentioned. Second, RBV and DC are examined as an important piece to achieve SCA. Later on, the author deepens into some examples and the manager’s importance when using these RBV and DC approaches. Then issues related with complexity and undefined concepts in RBV and DC are briefly mentioned. Finally, conclusions and personal comments are presented.

The corruption risks of EU funds in Hungary

In corruption, a group of players gain an economic advantage without providing any socially beneficial services in return, therefore corruption is considered to be a form of rent-seeking. Similar to other forms of rent-seeking, corruption causes losses on a societal level, due to the less efficient allocation of resources, as well as the costs of operation and prosecution. Fighting corruption is important not just because of ethical but also economic considerations. Contributions from the European Union are making possible the use of more funds than ever, and spending the full amount of this money is a priority preference of the government. The abundance of funds and the pressure on absorption increase corruption, by the managers of the funds overplanning the amount of money to be allocated to individual tender invitations, setting generous rules on eligible costs, and specifying low rates of own contribution wherever possible. As a result, the opportunities for rent-seeking are increased, as it is worth it for beneficiaries to carry out the project even after relinquishing part of the funds they have been awarded. Thus, the abundance of funds generates a sphere of corruption in which rent-seekers may appear on various levels of the system, often even without the knowledge or approval of those on higher decisionmaking levels.

Public school administrators' knowledge of special education law

The purpose of this study was to assess the knowledge of public school administrators with respect to special education (ESE) law. The study used a sample of 220 public school administrators. A survey instrument was developed consisting of 19 demographic questions and 20 situational scenarios. The scenarios were based on ESE issues of discipline, due process (including IEP procedures), identification, evaluation, placement, and related services. The participants had to decide whether a violation of the ESE child's rights had occurred by marking: (a) Yes, (b) No, or (c) Undecided. An analysis of the scores and demographic information was done using a two-way analysis of variance, chi-square, and crosstabs after a 77% survey response rate.^ Research questions addressed the administrators' overall level of knowledge. Comparisons were made between principals and assistant principals and differences between the levels of schooling. Exploratory questions were concerned with ESE issues deemed problematic by administrators, effects of demographic variables on survey scores, and the listing of resources utilized by administrators to access ESE information.^ The study revealed: (a) a significant difference was found when comparing the number of ESE courses taken and the score on the survey, (b) the top five resources of ESE information were the region office, school ESE department chairs, ESE teachers, county workshops, and county inservices, (c) problematic areas included discipline, evaluation procedures, placement issues, and IEP due process concerns, (d) administrators as a group did not exhibit a satisfactory knowledge of ESE law with a mean score of 12 correct and 74% of responding administrators scoring in the unsatisfactory level (below 70%), (e) across school levels, elementary administrators scored significantly higher than high school administrators, and (f) a significant implication that assistant principals consistently scored higher than principals on each scenario with a significant difference at the high school level.^ The study reveals a vital need for administrators to receive additional preparation in order to possess a basic understanding of ESE school law and how it impacts their respective schools and school districts so that they might meet professional obligations and protect the rights of all individuals involved. Recommendations for this additional administrative preparation and further research topics were discussed. ^

The impacts of trade policy reforms on the Sri Lankan economy

This dissertation presents an analysis of the impacts of trade policy reforms in Sri Lanka. A Computable General Equilibrium (CGE) model is constructed with detailed description of the domestic production structure and foreign trade. The model is then used to investigate the effects of trade policy reforms on resource allocation and welfare.^ Prior to 1977, Sri Lanka maintained stringent control over its imports through rigid quantitative restrictions. A new economic policy reform package was introduced in 1977, and it shifted Sri Lanka's development strategy toward an export oriented policy regime. The shift of policy focus from a restrictive trade regime toward a more open trade regime is expected to have a significant impact on the volume of external trade, domestic production structure, allocation of resources, and social welfare.^ Simulations are carried out to assess the effects of three major policy reforms: (1) a devaluation of the Sri Lanka rupee, (2) a partial or a complete elimination of export duties, and (3) a devaluation-cum-removal of export duties.^ Simulation results indicate that the macroeconomic impact of a devaluation-cum-removal of export duties can be substantial. They also suggest that the resource-pull effects of a devaluation and a devaluation-cum-export duty removal policy are significant. However, the model shows that a devaluation combined with an export duty reduction is likely to be a superior strategy. ^

The eye of the beholder: The impact of a district implementation plan of state mandates as perceived by the implementers

The purpose of this inquiry was to investigate the impact of a large, urban school district's experience in implementing a mandated school improvement plan and to examine how that plan was perceived, interpreted, and executed by those charged with the task. The research addressed the following questions: First, by whom was the district implementation plan designed, and what factors were considered in its construction? Second, what impact did the district implementation plan have on those charged with its implementation? Third, what impact did the district plan have on the teaching and learning practices of a particular school? Fourth, what aspects of the implemention plan were perceived as most and least helpful by school personnel in achieving stated goals? Last, what were the intended and unintended consequences of an externally mandated and directed plan for improving student achievement? The implementation process was measured against Fullan's model as expounded upon in The Meaning of Educational Change (1982) and The New Meaning of Educational Change (1990). The Banya implementation model (1993), because it added a dimension not adequately addressed by Fullan, was also considered.^ A case study was used as the methodological framework of this qualitative study. Sources of data used in this inquiry included document analysis, participant observations in situ, follow-up interviews, the "long" interview, and triangulation. The study was conducted over a twelve-month period. Findings were obtained from the content analysis of interview transcripts of multiple participants. Results were described and interpreted using the Fullan and Banya models as the descriptive framework. A cross-case comparison of the multiple perspectives of the same phenomena by various participants was constructed.^ The study concluded that the school district's implementation plan to improve student achievement was closely aligned to Fullan's model, although not intentionally. The research also showed that where there was common understanding at all levels of the organization as to the expectations for teachers, level of support to be provided, and availability of resources, successful implementation occured. The areas where successful implementation did not occur were those where the complexity of the changes were underestimated and processes for dealing with unintended consequences were not considered or adequately addressed. The unique perspectives of the various participants, from the superintendent to the classroom teacher, are described. Finally, recommendations for enhancement of implementation are offered and possible topics for further research studies are postulated. ^

The effect of multimedia instruction on achievement of college history students

The purpose of this study was to investigate the effect of multimedia instruction on achievement of college students in AMR 2010 from exploration and discovery to 1865. A non-equivalent control group design was used. The dependent variable was achievement. The independent variables were learning styles, method of instruction, and visual clarifiers (notes). The study was conducted using two history sections from Palm Beach Community College, in Boca Raton, Florida, between August and December, 1998. Data were obtained by means of placement scores, posttests, the Productivity Environmental Preference Survey (PEPS), and a researcher-developed student survey. Statistical analysis of the data was done using SPSS statistical software. Demographic variables were compared using Chi square. T tests were run on the posttests to determine the equality of variances. The posttest scores of the groups were compared using the analysis of covariance (ANCOVA) at the .05 level of significance. The first hypothesis there is a significant difference in students' learning of U.S. History when students receive multimedia instruction was supported, F (1, 52) = 16.88, p < .0005, and F = (1, 53) = 8.52, p < .005 for Tests 2 and 3, respectively. The second hypothesis there is a significant difference on the effectiveness of multimedia instruction based on students' various learning preferences was not supported. The last hypotheses there is a significant difference on students' learning of U.S. History when students whose first language is other than English and students who need remediation receive visual clarifiers were not supported. Analysis of covariance (ANCOVA) indicated no difference between the groups on Test 1, Test 2, or Test 3: F (1, 45) = .01, p < .940, F (1, 52) = .77, p < .385, and F (1, 53) =.17, p < .678, respectively, for language. Analysis of covariance (ANCOVA) indicated no significant difference on Test 1, Test 2, or Test 3, between the groups on the variable remediation: F (1, 45) = .31, p < .580, F (1, 52) = 1.44, p < .236, and F (1, 53) = .21, p < .645, respectively. ^

The democratization of higher education in Jamaica: The role of the University of the West Indies

The University of the West Indies (UWI), established in the British colony of Jamaica in 1948, was mandated to serve the “brightest and the best” of the British colonies. Unfortunately, the austerity of Jamaica's economy has not helped to augment an “open door” access to higher education, and UWI is often criticized for not implementing policies to sustain the democratization of higher education; it is accused of functioning as an elitist institution. ^ The purpose of this qualitative study was to determine whether UWI functions democratically as an institution to influence the equity of higher education in Jamaica. A review of the literature reveals many interpretations of the democratization of higher education. Three of Spaulding and Kargodorian's four criteria were utilized to analyze this research. They were (1) equality of access to higher education, (2) equality of participation within the institution of higher education, and (3) equality of educational results. Multiple sources of written data augmented by interviews in Jamaica and Miami were utilized. ^ The analysis revealed that UWI functions in a collaborative relationship with Jamaica's Centralized Educational System as well as with the country's political, economic, and social realms to impact the democratization of higher education. Documentation suggests that, although strong traditional influences continue to exist, UWI has deviated from its original mandate and instead, flexible admittance policies and diversification of expanded programs have contributed to greater accessibility. ^ Despite UWI's reports of improvements which have contributed to more access, UNESCO and some interviewees have not been impressed. A World Bank report on enrollment ratio at the university level in English speaking Caribbean countries reflects less than one percent of the age cohort. The Jamaicans interviewed, especially those from the lower class, felt that their democratic right to receive higher education was not met. UNESCO regards UWI's efforts as just putting a “dent” in the problem. ^ Recommendations include continuing efforts towards developing curricula more relevant to the Jamaican society, increasing distance education in order to ease UWI's load, expanding financial partnerships with private sectors, and extending research in collaboration with large local and foreign private companies. ^

The maintenance of tracking: The role of organizational culture

Modern comprehensive high schools do not formally track students into different programs, but schools offer different curricular sequences with important and stratified consequences for students' post-secondary education. This study used qualitative methodology to examine how schools' organizational cultures influence the maintenance of tracking practices in four comprehensive high schools in Miami. The methodology included long-term participant observation in each of the four schools, unstructured and semi-structured interviews and the collection of written documents produced by the district. A framework based on the concepts of environment, mission, information, strategy, and leadership was used to analyze the data. ^ It was found that school cultures shared deeply held beliefs that regard ability as a fixed trait. This prevented schools from providing access to information about the consequences of course selection to the majority of the student body, with the exception of those students defined as “college bound.” State and County level policies that reward achievement in standardized tests combined with school overcrowding, resulted in organizational cultures that favored the adoption of strategies stressing efficiency, as opposed to a challenging education for all students. Only one of the four schools in the study had a policy requiring students to attempt courses that were more challenging. The practice was resented by both teachers and counselors, since it was perceived as interfering with other goals of the institution, i.e.: graduating students in four years. ^ The culture of the schools stressed college as the only legitimate post-secondary option; consequently, the majority of counselors did not encourage students—even those already defined as “not college material”—to consider other alternatives, such as vocational education. The elimination of formal tracks in these comprehensive high schools resulted in the school culture lacking a clear mission in regards to non-college bound students. Findings are discussed in relation to current theoretical explanations for educational policy and equality of opportunity. ^

Vegetation dynamics and their implications for the management of wetlands in the lowlands of Nepal

The maintenance of species richness is often a priority in the management of nature reserves, where consumptive use of resources is generally prohibited. The purpose of this research was to improve management by understanding the vegetation dynamics in the lowlands of Nepal. The objectives were to determine vegetation associations in relation to environments and human-induced disturbances that affect vegetation dynamics on floodplains, where upstream barrages had altered flooding patterns, and consumptive use of plant resources was influencing natural processes. Floodplain vegetation in relation to physical environments and disturbances were studied along transects, perpendicular to the course of the Mahakali River in the western Terai, Nepal. Forest structural changes were studied for three years in ten plots. A randomized split-block experiment with nine burning and grazing treatments was performed in seasonally flooded grasslands. A semi-structured questionnaire was used to assess people's socio-economic status, natural resource use patterns and conservation attitudes. ^ Elevation, soil organic matter, nitrogen, percentage of sand and grazing intensity were significant in delineating herbaceous vegetation assemblages, whereas elevation and livestock grazing were significant in defining forest type boundaries. On the floodplain islands, highly grazed Dalbergia sissoo-Acacia catechu forests were devoid of understory woody vegetation, but the lightly grazed D. sissoo-mixed forests had a well-developed second canopy layer, comprising woody species other than D. sissoo and A. catechu. In grasslands, species richness and biomass production were highest at intermediate disturbance level represented by the lightly grazed and ungrazed early-burned treatments. Ethnicity, education and resource use patterns were important in influencing conservation attitudes. A succession towards the mixed forests would occur in D. sissoo-dominated floodplain forests, where dams and barrages reduce flooding and associated fluvial processes, and if livestock grazing is stopped, as occasionally suggested by nature conservationists. In seasonally flooded grasslands, early burning with moderate grazing would enhance the species diversity and productivity. There is a need to implement a participatory integrated wetland management plan, to include community development, education and off farm income generation, to assure participatory conservation and management of wetlands in Nepal. ^

Patterns of Root Dynamics in Mangrove Forests Along Environmental Gradients in the Florida Coastal Everglades, USA

Patterns of mangrove vegetation in two distinct basins of Florida Coastal Everglades (FCE), Shark River estuary and Taylor River Slough, represent unique opportunities to test hypotheses that root dynamics respond to gradients of resources, regulators, and hydroperiod. We propose that soil total phosphorus (P) gradients in these two coastal basins of FCE cause specific patterns in belowground biomass allocation and net primary productivity that facilitate nutrient acquisition, but also minimize stress from regulators and hydroperiod in flooded soil conditions. Shark River basin has higher P and tidal hydrology with riverine mangroves, in contrast to scrub mangroves of Taylor basin with more permanent flooding and lower P across the coastal landscape. Belowground biomass (0–90 cm) of mangrove sites in Shark River and Taylor River basins ranged from 2317 to 4673 g m-2, with the highest contribution (62–85%) of roots in the shallow root zone (0–45 cm) compared to the deeper root zone (45–90 cm). Total root productivity did not vary significantly among sites and ranged from 407 to 643 g m-2 y-1. Root production in the shallow root zone accounted for 57–78% of total production. Root turnover rates ranged from 0.04 to 0.60 y-1 and consistently decreased as the root size class distribution increased from fine to coarse roots, indicating differences in root longevity. Fine root biomass was negatively correlated with soil P density and frequency of inundation, whereas fine root turnover decreased with increasing soil N:P ratios. Lower P availability in Taylor River basin relative to Shark River basin, along with higher regulator and hydroperiod stress, confirms our hypothesis that interactions of stress from resource limitation and long duration of hydroperiod account for higher fine root biomass along with lower fine root production and turnover. Because fine root production and organic matter accumulation are the primary processes controlling soil formation and accretion in scrub mangrove forests, root dynamics in the P-limited carbonate ecosystem of south Florida have a major controlling role as to how mangroves respond to future impacts of sealevel rise.

Carbon (d13c) and Nitrogen (d15n) Isotopic Discrimination in Mangroves in Florida Coastal Everglades as a Function of Environmental Stress

Isotope signatures of mangrove leaves can vary depending on discrimination associated with plant response to environmental stressors defined by gra­dients of resources (such as water and nutrient limitation) and regulators (such as salinity and sul­fide toxicity). We tested the variability of man­grove isotopic signatures (d13C and d15N) across a stress gradient in south Florida, using green leaves from four mangrove species collected at six sites. Mangroves across the landscape studied are stressed by resource and regulator gradients repre­sented by limited phosphorus concentrations com­bined with high sulfide concentrations, respec­tively. Foliar d13C ratios exhibited a range from ­ 24.6 to –32.7‰, and multiple regression analysis showed that 46% of the variability in mangrove d13C composition could be explained by the differ­ences in dissolved inorganic nitrogen, soluble reac­tive phosphorus, and sulfide porewater concentra­tions. 15N discrimination in mangrove species ranged from –0.1 to 7.7‰, and porewater N, salin­ity, and leaf N:Pa ratios accounted for 41% of this variability in mangrove leaves. The increase in soil P availability reduced 15N discrimination due to higher N demand. Scrub mangroves (<1.5 m tall) are more water-use efficient, as indicated by higher d13C; and have greater nutrient use efficiency ratios of P than do tall mangroves (5 to 10 m tall) existing in sites with greater soil P concentrations. The high variability of mangrove d13C and d15N across these resource and regulator gradients could be a con­founding factor obscuring the linkages between mangrove wetlands and estuarine food webs. These results support the hypothesis that landscape fac­tors may control mangrove structure and function, so that nutrient biogeochemistry and mangrove-based food webs in adjacent estuaries should ac­count for watershed-specific organic inputs.

Human Security and Crime in Latin America: The political Capital and Political Impact of Criminal Groups and Belligerents Involved in Illicit Economies

Organized crime and illegal economies generate multiple threats to states and societies. But although the negative effects of high levels of pervasive street and organized crime on human security are clear, the relationships between human security, crime, illicit economies, and law enforcement are highly complex. By sponsoring illicit economies in areas of state weakness where legal economic opportunities and public goods are seriously lacking, both belligerent and criminal groups frequently enhance some elements of human security of the marginalized populations who depend on illicit economies for basic livelihoods. Even criminal groups without a political ideology often have an important political impact on the lives of communities and on their allegiance to the State. Criminal groups also have political agendas. Both belligerent and criminal groups can develop political capital through their sponsorship of illicit economies. The extent of their political capital is dependent on several factors. Efforts to defeat belligerent groups by decreasing their financial flows through suppression of an illicit economy are rarely effective. Such measures, in turn, increase the political capital of anti-State groups. The effectiveness of anti-money laundering measures (AML) also remains low and is often highly contingent on specific vulnerabilities of the target. The design of AML measures has other effects, such as on the size of a country’s informal economy. Multifaceted anti-crime strategies that combine law enforcement approaches with targeted socio-economic policies and efforts to improve public goods provision, including access to justice, are likely to be more effective in suppressing crime than tough nailed-fist approaches. For anti-crime policies to be effective, they often require a substantial, but politically-difficult concentration of resources in target areas. In the absence of effective law enforcement capacity, legalization and decriminalization policies of illicit economies are unlikely on their own to substantially reduce levels of criminality or to eliminate organized crime. Effective police reform, for several decades largely elusive in Latin America, is one of the most urgently needed policy reforms in the region. Such efforts need to be coupled with fundamental judicial and correctional systems reforms. Yet, regional approaches cannot obliterate the so-called balloon effect. If demand persists, even under intense law enforcement pressures, illicit economies will relocate to areas of weakest law enforcement, but they will not be eliminated.