[PEN-L:8169] RE: Re: Request: Summers Memo

["Craven, Jim" <jcraven@xxxxxxxxx>]

Thanks to Doug H, Robert Naiman and Lisa and Ian Murray for sending
materials. My class will thank you and benefit.

BTW, I heard, but do not know, that for some time Summers did not deny
having written that memo and then later claimed he did not write it but it
was a memo of understanding to what was discussed and then the story changed
again to "I didn't write it and had nothing to do with it and if I had had
this discussion (If I had a dog), it was only speculative and/or intended as
a little "dark humor." It then was left up to some entrepreneural journalist
(seeking access for scoops for exposure for name recognition for more access
for...) to write the new cover story.

Thanks again. Any cites for the full memo? I can't find it at the Economist
archive.

Jim C

-----Original Message-----
From: Doug Henwood [mailto:dhenwood@xxxxxxxxx]
Sent: Monday, June 21, 1999 6:58 PM
To: pen-l@xxxxxxxxxxxxxxxxxxx
>Subject: [PEN-L:8152] Re: Request: Summers Memo


Craven, Jim wrote:

>I would appreciate it if anyone who has the original and infamous "Summers
>Memo" at the World Bank would send it to me.

Here's the relevant excerpt. The memo was actually written, according to
John Cassidy in The New Yorker, by Lant Pritchett.

Doug

----

_Nuggets_

3. _"Dirty" industries_   Just between you and me, shouldn't the World Bank
be encouraging more migration of the dirty industries to the LDCs? I can
think of three reasons:

1) The measurement of the costs of health impairing pollution depends on
the foregone earnings from increased morbidity and mortality. From this
point of view a given amount of health Impairing pollution should be done
in the country with the lowest cost, which will be the country with the
lowest wages. I think the economic logic behind dumping a load of toxic
waste in the lowest wage country is impeccable and we should face up to
that.

2) The costs of pollution are likely to be non-linear as the initial
Increments of pollution probably have very low cost. I've always thought
that underpopulated countries in Africa are vastly _under_-polluted, their
air quality is probably vastly inefficiently low compared to Los Angeles or
Mexico City. Only the lamentable facts that so much pollution is generated
by non-tradable industries (transport, electrical generation) and that the
unit
transport costs of solid waste are so high prevent world welfare enhancing
trade in air pollution and waste.

3) The demand for a clean environment for aesthetic and health reasons Is
likely to have very high income elasticity. The concern over an agent that
causes a one in a million change In the adds of prostrate [sic] cancer is
obviously going to be much higher in a country where people survive to got
prostrate cancer than in a country where under 5 mortality is 200 per
thousand. Also, much of the
concern over industrial atmospheric discharge is about visibility impairing
particulates. These discharges may have very little direct health impact.
Clearly trade in goods that embody aesthetic pollution concerns could be
welfare enhancing. While production is mobile the consumption of pretty air
is a non-tradable.

The problem with the arguments against all of these proposals for more
pollution in LDCs (intrinsic rights to certain goods, moral reasons, social
concerns, lack of adequate markets, etc.) could be turned around and used
more or less effectively against every Bank proposal for liberalization.