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Non-technical summary The thesis of this paper is that the COVID-19 crisis creates opportunities for fundamental change towards a more sustainable economy, for two reasons: structural change in the economy and a change in public opinion. The paper identifies how the COVID-19 crisis accelerates six processes of change that can be leveraged in policy making. With a focus on the Netherlands, it argues for activist government policy because of the tipping-point nature of the economic system in the crisis. Technical summary Structural change in the economy and a change in public opinion during the COVID-19 crisis jointly imply that government choices regarding investments, regulation and taxes can now create stronger synergies of cleaner economic growth and employment creation with ecological, social and financial sustainability. The paper details this for six areas, with examples taken from The Netherlands. High levels of private and (in some countries) public debt may become so unsustainable that this prompts a restructuring of financing systems which are more productive and more in support of ecological goals. In value chains, ICT systems and urban transport systems, forced changes such as more work from home, more cycling lanes and more local production may, once in place, be used as proof of concepts for permanently different infrastructures and organizations. Aviation and energy became dependent on public support, which created financial leverage for enforcing change. Social media summary COVID-19 creates opportunities for change towards sustainability as it accelerates six processes of change.

Using an analogy with ancient Babylonia as its leading theme, this viewpoint argues that the credit crisis is the symptom of an underlying problem. Fuelled by government policies, unprecedented debt levels were run up in industrialised countries over the last quarter century. Present policies of financial sector bailouts are not only an unwise use of taxpayers' money; they maintain economic structures opposed to what classical liberals such as J. S. Mill envisaged as a free‐market economy.

In an analysis of primary survey data collected by the author, de novo family farms in the Czech Republic are shown to have had more limited receipt of credit during 1993-1997 than successor organisations to communist-era farms, which are corporate farms. Criteria for credit allocation are investigated for both farm types. It appears that there is a link between farm profitability and obtaining credit for corporate farms, but not for family farms. An explanation for this finding is suggested, taking into account the inadequacy of conventional credit rating instruments in the transition setting and the informational advantage of corporate farms vis-à-vis family farms. Survey findings are in line with some of the implications of this account. (Comparative Economic Studies / SWP)

The 1997 collapse of the Albanian economy caused by the collapse of economy-widePonzi schemes contrasts sharply to itssuccess status as a post-socialist transition country in the years 1992-1996. Inthis paper, an attempt is made to explain this'Albanian Paradox'. The specific Albanian conditions for the growth of Ponzischemes are identified. Theoretically, theAlbanian Paradox can be interpreted as one version of the 'Financial InstabilityHypothesis' suggested by Minsky.Investigation of the underlying factors that render financial markets fragilesuggests that the Albanian case is extreme butnot rare in the region. In the post-socialist setting, expectations of thepopulation and other potential investors based on alack of reliable information on returns may lead to excessive capital inflow.This trend is reinforced if governments areweak, and if transition policies rely largely on liberal financial marketdevelopment, rapid privatisation and external capitalinflows, facilitating the tendency to instability. Identification of this trendis hindered if policy makers and observers largelyrely on macroeconomic indicators in monitoring the economy.

Long-term growth in developing countries has been explained in four frameworks: 'extractive colonial institutions' (Acemoglu et al., 2001), 'colonial legal origin' (La Porta et al., 2004), 'geography' (Gallup et al., 1998) and 'colonial human capital' (Glaeser et al., 2004). In this paper we test the 'colonial human capital' explanation for sub-Saharan Africa, controlling for legal origin and geography. Utilising data on colonial era education, we find that instrumented human capital explains long-term growth better, and shows greater stability over time, than instrumented measures for extractive institutions. We suggest that the impact of the disease environment on African long-term growth runs through a human capital channel rather than an extractive-institutions channel. The effect of education is robust to including variables capturing legal origin and geography, which have additional explanatory power. Adapted from the source document.