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Begin New Search Topic International Political Economy Content Type Policy Brief Publication Year within 25 Years Publication Year within 10 Years

11. Born Out of Necessity: A Debt Standstill for COVID-19

Author:
Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, Mitu Gulati, Chang-Tai Hsieh, Ugo Panizza, and Beatrice Weder di Mauro
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
Rich and poor countries alike are facing an unprecedented economic crisis as they attempt to contain the impact of the COVID-19 pandemic. A downturn of this magnitude can cause tremendous long-term damage, with critical economic linkages between employees, businesses, and banks at risk of disappearing forever. Scores of firms will close permanently unless urgent action is taken. The threat is even more significant for emerging economies, where the economic costs of social distancing are likely to be higher, and where vulnerable small and medium sized enterprises with low cash reserves account for a much larger share of the economy than in rich countries, which can rely on extensive social and economic safety nets. Poor countries, moreover, have far more precarious health-care systems. The funds required to support vulnerable workers and businesses, and to care for COVID-19 patients, could be as high as 10% of their GDP. As a comparison, in the US the rescue measures passed in the last month alone account for at least 10% of GDP, and are likely to increase even more. A number of European countries have commited loans, equity injections and guarantees up to 35% of GDP. The COVID-19 crisis has led to a sudden collapse in capital flows to emerging and developing countries. According to estimates by the Institute of International Finance, non-resident portfolio outflows from emerging market countries amounted to nearly $100 billion over a period of 45 days starting in late February 2020. For comparison, in the three months that followed the explosion of the 2008 global financial crisis, outflows were less than $20 billion.
Topic:
Debt, Economics, International Political Economy, GDP, Business, Macroeconomics, Pandemic, COVID-19, and Credit
Political Geography:
Global Focus

12. Consumer Expenditure Inequality in Botswana

Author:
Lillian Mookodi
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
For over three decades, Botswana has achieved a fast growing economy, with an annual growth in real Gross Domestic Product (GDP) averaging 10.9 percent in the period 1981- 90, faster even than the East Asian Tigers or China (Good and Hughes, 2002). Between 2000 and 2001 financial year, Botswana’s economy recorded higher growth rates of 9.1 percent, an increase from 8.1 percent recorded between 1999 and 2000, which was mainly attributed to the growth in the mining sector (BIDPA Briefing, 2002). To emphasise on the desire to continue growing, Botswana has adopted Vision 2036, and other development strategies and policies to improve the implementation of interventions tackling unsatisfactory social indicators. Botswana has also subscribed to both continental and international frameworks, such as the Africa Agenda 2063 and United Nations (UN) Millennium Declaration and its Eight Millennium Development Goals, and further signed up for the UN Sustainable Development Goals (SDGs) of 2030. Regardless of the afore-mentioned positive growth, and immense efforts, the country has not achieved the desirable results it sought with regard to some of the social indicators, such as employment, unemployment, inequality and poverty.
Topic:
Economics, International Political Economy, Poverty, Labor Issues, Inequality, Demand, Unemployment, and Consumerism
Political Geography:
Africa and Botswana

13. Restraining Ourselves: Helping by Not Hurting

Author:
Nathan Nunn
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
In this brief, I discuss the current state of economic development policy, which tends to focus on interventions, usually funded with foreign aid, that are aimed at fixing deficiencies in developing countries. The general perception is that there are inherent problems with less-developed countries that can be fixed by with the help of the Western world. I discuss evidence that shows that the effects of such ‘help’ can be mixed. While foreign aid can improve things, it can also make things worse. In addition, at the same time that this ‘help’ is being offered, the developed West regularly undertakes actions that are harmful to developing countries. Examples include tariffs, antidumping duties, restrictions on international labor mobility, the use of international power and coercion, and tied-aid used for export promotion. Overall, it is unclear whether interactions with the West are, on the whole, helpful or detrimental to developing countries. We may have our largest and most positive effects on alleviating global poverty if we focus on restraining ourselves from actively harming less-developed countries rather than focusing our efforts on fixing them.
Topic:
Development, Economics, International Political Economy, Developing World, and Economic Development
Political Geography:
United States and Global Focus

14. Open RAN: The Technology, its Politics and Europe’s Response

Author:
Hosuk Lee-Makiyama and Florian Forsthuber
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This policy brief explores the implications of Open RAN concept and its technical and political developments in the mobile network industry. Open RAN is not necessarily a new technology in itself, but represents a combination of existing technologies, e.g. virtualisation, AI, commercial off-the-shelf parts and open interfaces. Its proponents promise more secure networks without ‘high-risk vendors’ but Open RAN could introduce new systemic risks that must be addressed due to its reliance on open source software. While the proponents also promise significantly reduced costs, it is still inconclusive whether Open RAN in itself reduces the total costs of deploying a 5G network. Economic evidence shows that the equipment market is a buyers’ market due to a higher concentration amongst operators. The number of vendors is less critical for prices than the relative power between buyers and sellers. The network equipment market is the only ICT segment where the EU manufacturers are still global leaders. If various industry consortiums call for subsidies, the EU has the commercial policy instruments to countervail against them. Some industry voices suggest that a certain Open RAN specification could replace existing global specifications under 3GPP. However, as today’s market condition is not caused by the 3GPP standardisation, a solution is not to be found through developing alternative technical specifications. 3GPP is also more comprehensive than RAN. Thus, the question is whether Europe should try to sustain one common global umbrella of standards – or see the world balkanise into national or regional standards from 6G and onward. For better or worse, there will be regional fragmentation. The EU industrial policy could be facing a reality where network standards are politicised for commercial reasons – to pave way for an indigenous industry – which is unrelated to national security objectives. Also, EU operators may not react well if Open RAN open the door for cloud services to encroach into the telecom market. In conclusion, Open RAN has a raison d’etre as a promising new concept, even if it does not solve any geopolitical gambits. However, the EU have little to gain from government interventions in the RAN segment, which is just one element of the mobile network market.
Topic:
International Political Economy, Science and Technology, Global Markets, Digital Economy, Industry, and Information Technology
Political Geography:
Europe

15. Work for Others, not Yourself: Globalization, Protectionism and Europe’s Quest for Strategic Autonomy

Author:
Fredrik Erixon
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Protectionism and mercantilism are yet again at the centre of global economic policy. “America First” is the guiding ethos in a good part of US international economic policy. Beijing is taking a larger stake in China’s economy and hand out privileges to domestic firms. Europe is increasingly occupied by achieving “strategic autonomy” and to create European champions at the expense of competition. Old and disreputed economic doctrines are getting a new lease on life. Behind this new orientation in international economic policy stands the old idea that a strong economy is an economy not dependent on others. Human prosperity – our story of rags to riches – tells a very different story. Prosperity is generated when people collaborate and improve our collective intelligence. Open economies are much better at creating wealth because they operate by the principle that people should work for others, not themselves. They specialize – and in the process, they get far more dependent on others. Dependency is a factor of success; economic sovereignty is a sure way of depriving people of opportunity and prosperity.
Topic:
International Political Economy, International Trade and Finance, Global Markets, and Strategic Competition
Political Geography:
United States, China, and Europe

16. Globalization Isn’t in Decline: It’s Changing

Author:
Erik van der Marel
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Globalization isn’t in decline; it is simply changing. Although the COVID-19 crisis has seen a dramatic decline in goods trade, investments and the movement of people, a new type of globalization is emerging. This “new globalization” is based on digital services, research and development, data, ideas, and other intangibles. This development has been going on for a while and has evolved more rapidly after the previous global financial crisis (GFC) in 2008-9. For instance, the GFC caused digital services trade to significantly “de-link” from goods-related services trade. This pattern illustrates that the COVID-19 crisis will likely mark another break in trade patterns and that future growth in globalization will depend crucially on digital trade and cross-border exchange in intangibles.
Topic:
Globalization, International Political Economy, International Trade and Finance, Digital Economy, R&D, Data, and COVID-19
Political Geography:
Global Focus

17. The Tragedy of International Organizations in a World Order in Turmoil

Author:
Jean-Jacques Hallaert
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
China’s rise and the U.S. response to the perceived threat it represents to its predominance jeopardize the world order and affect international institutions. The paralysis of the WTO and the U.S. withdrawal from the WHO are the most visible examples, but not the only ones. This article presents the case of the International Monetary Fund. Quotas are the cornerstone of IMF governance. They determine each member’s contribution to the institution’s resources and their voting power. As the world evolves, the quota distribution needs to be adjusted. Adjustments in quota shares and thus voting powers have always been politically difficult. However, they were possible. In the early 1990s, members agreed to an increase in the representation of Japan. In the 2000s, they agreed to increase substantially the voting power of emerging economies. In contrast, the 15th General Review of Quotas concluded early 2020, failed to increase and realign quotas. The proximate cause for this was the opposition of the United States to a change in quotas. This paper argues that the U.S. decision was in large part motivated to prevent an increased influence of China. The failure to increase and realign voting powers may have long-lasting consequences. In the absence of a quota increase, the IMF will need to continue to rely on borrowed resources to avoid a drop in its lending capacity. This extension of the “temporary” recourse to borrowed resources undermines the governance of the Fund as voting powers (which are not linked to borrowed resources but only to quotas) are disconnected from member’s total contributions to the Fund and to their economic weight. This may trigger a new legitimacy crisis and provide incentives for countries like China to support the development of new and competing institutions which would better represent their interests and economic weight. Such a development would undermine the complex and fragile international financial architecture.
Topic:
International Organization, International Political Economy, Governance, IMF, and WTO
Political Geography:
United States, China, and Global Focus

18. Ambition on Unstable Foundations: The UK Trade Policy Readiness Assessment 2020

Author:
David Henig
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The UK’s road to an independent trade policy has reached a critical moment. Within the next six months Free Trade Agreements (FTAs) containing long term arrangements and rules could be finalised with the United States and / or European Union, who between them constitute around 65% of UK trade. Talks have also started with Japan, Australia, and New Zealand. Our updated Trade Policy Readiness Assessment suggests that the UK government is not fully ready for this activity. On a scale where 1 suggests no work being undertaken, 3 a stable position to begin talks, and 5 successful delivery, we find problems in seeking consensus, expanding priorities beyond the traditional tariff reduction, and putting in place a realistic implementation plan.
Topic:
International Political Economy, International Trade and Finance, Treaties and Agreements, Free Trade, and Trade
Political Geography:
United Kingdom

19. Discrimination, Exclusion and Environmental Harm: Why EU Lawmakers Need to Ban Freight Transport Restrictions to Save the Single Market

Author:
Matthias Bauer
Publication Date:
06-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The EU’s Mobility Package 1 legislative proposal was once intended to improve the working conditions of truck and small-van drivers in the EU. Initially, the European Commission also aimed at securing a smooth and non-discriminatory functioning of the Single Market. Some provisions of the current package may indeed have a positive impact on drivers’ working conditions, e.g. limits on working time and obligatory rest periods. However, over the past three years, the legislative procedure towards the current draft of the Mobility Package 1 was hijacked by the protectionist agenda of Western Europe’s haulage and logistics businesses. Spearheaded by the French government, some national governments and Members of the European Parliament called for tighter freight cabotage and return-to-home provisions to shield Western European transport markets against competition from other EU Member States. The proposed restrictions to cross-border trade in the European Single Market are up for a vote in the European Parliament in mid-2020. Learnings from the Covid-19 situation in the Single Market: In its response to Covid-19 border measures, the European Commission called on EU governments “to act immediately to temporarily suspend all types of road access restrictions in place in their territory (weekend bans, night bans, sectoral bans, etc.) for road freight transport and for the necessary free movement of transport workers.” These actions are step in the right direction and should continue even once the Covid-19 crisis is over, yet they are the exception not the rule in the EU. The rise of protectionist measures to Member States’ national transport markets vividly demonstrates the need to abolish freight cabotage restrictions in defence of the Single Market. For the sake of a greener, more inclusive and better functioning of the European Single Market, lawmakers need to abandon all existing restrictions on freight cabotage services in the EU27 and vote against new restrictions such as cooling-off periods and return-to-home policies. Maintaining legal restrictions on the freedom to provide transport services in the EU’s Single Market would increase tensions between economically less-developed countries in Central and Eastern Europe and more developed Western European countries – economically, mentally and politically. Discrimination on the basis of EU passport: Cabotage restrictions infringe upon the fundamental values stipulated in the Lisbon Treaty. Furthermore, data on transport flows and employment demonstrate that cabotage regulations disproportionately discriminate against Eastern European companies and citizens. Available data shows that Polish (4,574 enterprises), Romanian (1,864), Lithuanian (519), Hungarian (398), Slovakian (347), and Dutch (309) haulage companies are disproportionately affected by current EU-imposed cabotage restrictions. By contrast, only a very small number of French freight transport companies (an estimated number of 70 enterprises) directly depend on intra-EU cabotage services. In France, only about 800 workers employed in road freight transport services are directly affected by the restrictions. The numbers are substantially higher for other, particularly Central and Eastern European, countries: 20,100 persons in Poland, 9,800 in Romania, 6,300 in Lithuania, 3,400 in the Netherlands, 2,300 in Portugal, 2,200 in Hungary, and 2,100 in Germany. Exclusion from economic opportunity: Freight cabotage restrictions increase the administrative burden for internationally operating haulage companies across the EU. Industry assessments indicate that additional limitations on international freight transport services within Europe’s Single Market would raise the prices of transporting goods in Western Europe. Negative impacts are estimated for employment, wage growth and the process of economic convergence in Central and Eastern Europe. In addition to the EU’s existing freight cabotage restrictions, new limits on cross-border freight transport in the EU – such as EU law-imposed return-to-home trips and EU-mandated cooling-off periods – would deprive many Eastern European households of economic opportunities and impede the process of economic convergence and converging standards of living in the EU. Environmental harm: The return-to-home policies proposed in the latest Mobility Package 1 would require companies to send drivers back to operational centres or the driver’s place of residence. Return-to-home provisions would substantially increase the number of empty trailers on European roads. Accordingly, and adding to the adverse environmental impacts caused by existing freight cabotage restrictions, new EU-imposed return-to-home obligations would deteriorate Member States’ carbon emission footprints. The highest increases would take place in the EU’s major transit countries such as Germany, the Netherlands, Belgium and France. While this is recognised by the European Commission, the majority of the European Parliament’s Transport Committee is still pushing for such policies to be implemented as the EU law. How to save the EU’s fundamental values and the freedoms of the Single Market – lessons from aviation: In 1993, the EU completed the EU’s internal aviation market for passenger cabotage. Guided by the European Commission, EU lawmakers should follow the same rationale for freight cabotage services to render the Single Market more single and less discriminatory. In the process towards a real, more inclusive Single Market, EU lawmakers must abstain from catering Western European companies’ vested commercial interests, which stifle economic opportunity across the EU and stand in opposition to the EU’s fundamental principles for international trade and a competitive and social market economy.
Topic:
International Political Economy, International Trade and Finance, Law, European Union, Global Markets, Legislation, Shipping, and Protectionism
Political Geography:
Europe

20. Innovation and Less Harmful Alternatives to Tobacco: The Case of Nicotine Pouches Regulation

Author:
Christofer Fjellner
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
For some years now, tobacco-free nicotine pouches – a tobacco-free version of pre-portioned snus – have been available on the Swedish market. Although the use of the product is increasing and is marketed outside Europe, nicotine pouches are not subject to any specific product regulation – neither in Europe nor elsewhere, but we will most certainly see new regulation adopted in all important markets in the coming years. The interest in harm reduction as an approach to tobacco prevention and the concern about nicotine dependence will be two decisive factors for how legislators decide to regulate nicotine pouches. Sweden and Norway will most likely be the first countries with specific product regulations for nicotine pouches. They can also influence how other European governments will shape the regulation. The EU will most probably regulate nicotine pouches under the scope of the TPD. However, this will not happen in the near future. An indication of how the European Commission views nicotine pouches can probably be found in the implementation report for the TPD that is to be presented in May 2021. How the EU chooses to regulate nicotine pouches is influenced by at least three factors: Whether EU Member States calls on the EU to ban nicotine pouches, due to concern about the use of the product in Member States (which was the reason for the EU ban on snus). Whether there are already specific product regulations or national bans in individual Member States that new European legislation may be in conflict with. The number of users of nicotine pouches, and thus a public opinion critical to a new restrictive legislation or ban. This was one of the reasons e-cigarettes were not banned in the 2014 TPD revision. Action taken by manufacturers will influence how legislators will react. Strict self-regulation and dialogue with authorities can reduce the desire among some to opt for very hard regulations. Irresponsible marketing or sales can quickly raise demands for bans. The way the EU regulated e-cigarettes in 2014 may give an indication of how the EU will regulate nicotine pouches in the future. This would indicate a focus on warning texts and introducing a strict maximum nicotine level. Future regulation of nicotine pouches in the EU may leave considerable room for further regulation by Member States, and even national bans. This is true today for both traditional tobacco products and e-cigarettes in the EU.
Topic:
International Political Economy, European Union, Regulation, and Public Health
Political Geography:
Europe