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  • Author: Oula A. Alrifai
  • Publication Date: 01-2020
  • Content Type: Policy Brief
  • Institution: The Washington Institute for Near East Policy
  • Abstract: Besides highlighting Assad’s financial mismanagement, the recent unrest gives the international community a genuine opportunity to push for transition while bolstering the more prosperous local administration in the northeast. Since mid-January, shop owners, government employees, students, and even children have been gathering in the streets of various Syrian communities to express their frustration with the Assad regime’s economic policies and untruths. Although the protests remain small for now, the fact that they have persistently carried on in the middle of regime-controlled territory highlights Bashar al-Assad’s potential vulnerability on these issues. In Suwayda, a Druze-majority province in the south, residents have protested the sharp drop in the value of the Syrian pound/lira and the deteriorating economic situation in general. In the central-western town of Salamiya, protestors were seen chanting “we want to live.” And in the Suwayda town of Shahba, demonstrators raised loaves of bread in the air while openly criticizing Bouthaina Shaaban, Assad’s political and media advisor. The latter protest was partly spurred by a recent interview on the pro-Assad television network al-Mayadeen, where Shaaban not only claimed that the country’s current economy is “fifty times better than what it was in 2011,” but also declared that “Syrians are self-sufficient in everything.” In response, protestors sarcastically noted that her comments referred to her own household’s economy, not Syria’s. Elsewhere, former agriculture minister Nour al-Din Manna described Shaaban’s remarks about the war-torn country as “hard to believe,” and a closer look at the country’s finances supports this disbelief.
  • Topic: Foreign Policy, Economics, Syrian War, Currency
  • Political Geography: Middle East, Lebanon, Syria, United States of America
  • Author: Judit Fabian
  • Publication Date: 03-2020
  • Content Type: Policy Brief
  • Institution: Urban Institute
  • Abstract: International trade is often framed in starkly divergent terms: either countries choose multilateral trade agreements (MTAs) and advance the cause of global economic liberalization, or they choose preferred trade agreements (PTAs) and put the entire system at risk. Canada has a long track record of pursuing PTAs and with the Trump administration’s opposition to multilateralism, and longstanding opposition in elements of the Republican and Democratic parties, this trend will likely continue. The question is whether progress will come at the expense of the global trade system. Some economists believe PTAs to be trade-diverting, reducing trade with more efficient producers outside the agreement. Others insist that PTAs can create trade by shifting production to lower-cost producers in one of the participating countries. One prominent contrary argument holds that PTAs lead to discontinuities in tariff regimes between countries and regions, increasing transaction costs, disrupting supply chains, creating opportunities for corruption and harming global welfare, especially in developing nations. While debate continues about the effects of PTAs, a closer examination suggests that worries are overblown about their negative impacts on global trade flows. Evidence indicates that they support rather than harm the international trading system. Countries shut out of PTAs are more motivated to seek out agreements in new markets, increasing liberalization overall. They may also seek a reduction in most-favoured nation (MFN) tariffs, which would deprive PTAs of their major tariff benefits. Studies have found complementarity between preferential and MFN tariffs, revealing that PTAs promote external trade liberalization. Even if a PTA reduces a given country’s incentive to push for multilateral liberalization, it raises the odds of that country liberalizing its trade to avoid getting left behind. PTAs are a response to the difficulties of securing sweeping multilateral agreements. The World Trade Organization (WTO) Agreements authorize them under GATT Article XXIV, GATS Article V, and the enabling clause, and the WTO facilitates a degree of governance over PTAs through its dispute settlement process. Over the past 25 years, countries have adopted these deals at a rapid pace. Between 1994 and 2005, the number of PTAs increased from 50 to 200. By April 2018, 336 were in effect. At the same time, global trade has increased significantly. Between 1994 and 2010, the volume of world merchandise exports more than doubled. The proliferation of PTAs has resulted in a rise in international trade governance, because the countries involved shape their relationships in line with the WTO agreements. This juridification makes PTAs subordinate to the international system rather than giving them room to dissolve it. Canada should therefore have no fear of pursuing PTAs within the larger framework of the effort to achieve multilateral trade liberalization.
  • Topic: Economics, International Trade and Finance, Governance, Trade, Donald Trump
  • Political Geography: Canada, North America, United States of America
  • Author: Rawi Abdelal, Aurélie Bros
  • Publication Date: 01-2020
  • Content Type: Policy Brief
  • Institution: Institut français des relations internationales (IFRI)
  • Abstract: Sanctions have become the dominant tool of statecraft of the United States and other Western states, especially the European Union, since the end of the Cold War. But the systematic use of this instrument may produce unintended and somewhat paradoxical geopolitical consequences. The sanctions imposed on the Islamic Republic of Iran and the Russian Federation in the field of energy are particularly illustrative of this phenomenon.
  • Topic: Economics, Energy Policy, Sanctions, Geopolitics, Secondary Sanctions, Transatlantic Relations
  • Political Geography: Russia, Iran, Middle East, North America, United States of America
  • 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, Economic Development
  • Political Geography: United States, Global Focus
  • Author: Simon Henderson
  • Publication Date: 12-2019
  • Content Type: Policy Brief
  • Institution: The Washington Institute for Near East Policy
  • Abstract: The ailing Sultan Qaboos bin Said al-Said, now seventy-nine years old, has no children and no announced successor, with only an ambiguous mechanism in place for the family council to choose one. This study considers the most likely candidates to succeed the sultan, Oman’s domestic economic challenges, and whether the country’s neutral foreign policy can survive Qaboos’s passing.
  • Topic: Foreign Policy, Economics, Domestic politics, Succession
  • Political Geography: Middle East, Oman, Gulf Nations
  • Publication Date: 11-2019
  • Content Type: Policy Brief
  • Institution: The Sexual Violence Research Initiative
  • Abstract: Poverty is a risk factor associated with gender-based violence; it also often intersects with and reinforces gender inequality. Various microfinance and other economic empowerment approaches have been implemented to try to address this intersection.
  • Topic: Economics, Gender Issues, Poverty, Women, Gender Based Violence , Microcredit
  • Political Geography: Bangladesh, Egypt, Global Focus
  • Author: Benjamin Augé
  • Publication Date: 12-2019
  • Content Type: Policy Brief
  • Institution: Institut français des relations internationales (IFRI)
  • Abstract: In 2017, the coming to power of João Lourenço put an end to nearly four decades of rule by the former head of state, José Eduardo Dos Santos. João Lourenço’s first objective was to strengthen his authority by appointing people close to him and cadres from the old regime, who had professed loyalty to him, to high office. The speed of the takeover of all the decision-making centers – army, intelligence services, state-owned companies, oil industry and above all the MPLA (Popular Movement for the Liberation of Angola) party-state – by the new “Comrade Number One” surprised the leaders of the Dos Santos era, some of whom were abruptly dismissed or even sentenced to prison. Now firmly established in Angola’s command centers, João Lourenço is however facing a serious economic crisis, the most worrying for the country since the end of the civil war in 2002.
  • Topic: Economics, Politics, Governance
  • Political Geography: Africa, Angola
  • Author: Enea Gjoza
  • Publication Date: 11-2019
  • Content Type: Policy Brief
  • Institution: Defense Priorities
  • Abstract: The American economy, dollar, and banking system create unparalleled power for the U.S. in the global financial system. This power provides disproportionate influence over the world’s key economic and financial institutions, regulatory authority over major foreign companies and banks, and allows borrowing on favorable terms and in dollars, enabling long-term deficit spending.
  • Topic: Economics, International Trade and Finance, Hegemony, Sanctions, Finance, Global Political Economy
  • Political Geography: United States
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Advocates Coalition for Development and Environment (ACODE)
  • Abstract: Chinese investment is flowing fast into Uganda, and spreading into the agriculture and forestry sectors. The government needs to keep pace with these developments so the benefits can be shared by Ugandans. A new analysis shows that, while the jobs and new businesses created are well received, the working conditions and environmental practices of Chinese companies are often poor. Many people evicted from their land to make way for new projects have not been compensated. To hold Chinese companies to account, government agencies, with support from NGOs, must share information about these investments and introduce stronger regulation — in particular to uphold community rights. In turn, Chinese companies must be more transparent, responsible and legally compliant. With a proactive and accountable strategy for Chinese investment management, Uganda could make major gains for sustainable development.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment, Business , Accountability, Investment, NGOs
  • Political Geography: Uganda, Africa, China
  • Author: Ebaidalla M. Ebaidalla
  • Publication Date: 11-2019
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: Despite the importance of non-farm income in the livelihood of the rural population in Sudan, information available on its size and determinants is scant. This study examined the patterns and determinants of decisions to participate in non-farm activities in rural Sudan. It also investigates whether the determinants of participation in non-farm activities vary across agriculture sub-sectors and income groups as well as among males and females. The data for this study was sourced from the Sudanese National Baseline Household Survey (NBHS) conducted by Sudan’s Central Bureau of Statistics in 2009. The results show that non-farm income is a crucial source of livelihood, contributing about 43% to household income in rural Sudan. The results of multinomial logit and probit estimation methods indicate that educational level, mean of transportation, lack of land and lack of access to formal credit are the most significant factors that push rural farmers to participate in non-farm activities. Surprisingly, the effect of household income was positive and significant, implying that individuals from rich households have higher opportunity to engage in non-farm activities compared to their poor counterparts. Moreover, the analysis revealed some symptoms of gender and location disparities in the effect of factors that influence participation in non-farm activities. The study concluded with some recommendations that aim to enhance the engagement in non-farm activities as an important diversification strategy to complement the role of the agriculture sector in improving rural economy in Sudan.
  • Topic: Agriculture, Economics, Gender Issues, Income Inequality, Rural
  • Political Geography: Africa, Sudan
  • Author: Isaac Bentum-Ennin
  • Publication Date: 08-2019
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: Given Ghana’s endowments such as attractive sites; more than 500km of beaches, and World Heritage forts and castles, tourism is seen as an important tool for promoting the socio-economic development in that it generates many economic benefits such as incomes, employment and tax revenue, both within the sector and through linkages with other sectors. This study first, analyses the factors influencing the upward trends in international tourists’ arrivals and receipts and second, quantifies the impact of the tourism sector on the Ghanaian economy. The objective of this policy brief is to inform the Ministers of Interior, Tourism and Finance that the most important factor influencing international tourists’ arrivals in Ghana is the prevailing civil liberties and political rights and that Nigeria is a significant substitute destination. Also, that the tourism sector has had the greatest impact on the whole Ghanaian economy when compared to sectors such as agriculture, industry and other services sectors. It is hoped that appropriate legislations will be passed to deepen these liberties and rights and that policy measures will be put in place to ensure macroeconomic stability in order not to lose competitiveness to Nigeria. Also, it is hoped that the Tourism Ministry would lobby for more investment and more resources from the Finance Ministry in order to expand the sector since it has a huge potential to stimulate economic growth.
  • Topic: Agriculture, Development, Economics, International Political Economy, Tourism, Economic growth, Macroeconomics
  • Political Geography: Africa, Ghana
  • Author: Ibrahim Okumu, Faizal Buyinza
  • Publication Date: 11-2019
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: Using the 2013 World Bank Enterprise Survey data for Uganda, this paper employs the quintile estimation technique to explain the relationship between innovation and firm performance in small and medium-sized enterprises (SMEs). Innovation involves the introduction of a new or significantly improved production process, product, marketing technique or organizational structure. Our results indicate that individual processing, product, marketing and organizational innovations have no impact on labour productivity as proxied by sales per worker. However, the results indicate the presence of complementarity between the four types of innovation. Specifically, the effect of innovation on sales per worker is positive when an SME engages in all four types of innovation. Even then the complementarity is weakly positive with incidences of a negative relationship when using any combination of innovations that are less than the four types of innovation. Policy-wise the results suggest that efforts to incentivize innovation should be inclusive enough to encourage all four forms of innovation.
  • Topic: Development, Economics, International Political Economy, Economic growth, Economic Policy
  • Political Geography: Uganda, Africa
  • Author: Janvier Mwisha-Kasiwa
  • Publication Date: 11-2019
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: Health is both a direct component of human well-being and a form of human capital that increases an individual’s capabilities and opportunities to generate income and reduces vulnerability. It is argued that these two views are complementary, and both can be used to justify increased investment in health in developing countries. Therefore, investment in child health constitutes a potential mechanism to end the intergenerational transmission of poverty. This paper examines the empirical impact of household economic well-being on child health, and the gender differences in effects using the Demographic and Health Survey conducted in 2014. A series of econometric tools are used; the control function approach appears to be the most appropriate strategy as it simultaneously removes structural parameters from endogeneity, the sample selection and heterogeneity of the unobservable variables. Results suggest a significant positive effect of household economic well-being on child health. However, the magnitude of the effect varies by gender of household head; children from households headed by males appear healthier compared to those from female-headed households. In the context of DR Congo, female-headed households often have a single parent, therefore, the economic well-being effect on child health in the male sub-sample can be considered to include the unobserved contribution of women. These results have implications for public interventions that enable women to participate in paid labour market activities as a means of improving household economic well-being, which in turn could improve child health.
  • Topic: Development, Economics, Gender Issues, Health, Health Care Policy, Children
  • Political Geography: Africa, Democratic Republic of Congo
  • Author: Lassana Cissokho
  • Publication Date: 11-2019
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: This paper investigates the productivity effects of power outages on manufacturing Small Scale Enterprises (SMEs) in Senegal, using a panel data on manufacturing firms. Productivity is estimated using stochastic frontier models, and power outages measured by their frequency or their duration. We controlled for firms owning a generator as well. The main results are drawn from random effects in a linear panel model. Nonetheless, the results remain consistent to the robustness checks using different models: a double-sided truncated data model and a generalized linear model, and different productivity measures: data envelopment analysis. We find that power outages have negative significant effects on the productivity of SMEs; for example, the manufacturing sector lost up to around 11.6% of the actual productivity due to power outages in 2011, and small firms appear to be affected more than medium ones, 5% against 4.3%. Further, firms with a generator were successful in countering the adverse effect of power outages on productivity. Besides, another outstanding result is the significant positive effect of access to credit on productivity. At last, it appears that productivity increases with firms’ size.
  • Topic: Development, Economics, International Political Economy, Economic structure, Economic growth, Macroeconomics, Manufacturing
  • Political Geography: Africa, Senegal
  • Author: Eme Dada
  • Publication Date: 08-2019
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: The objective of this policy brief is to inform the Ministers of Trade and Investment of Economic Community of West African State (ECOWAS) countries about the importance of the linkage between Foreign Direct Investment (FDI) and trade for developing countries. FDI is considered an important means of promoting export of the host countries. This is true of inward FDI, which comes for efficiency reasons. Conversely, there is concern that large flows of outward FDI results in a decline in the host country’s exports and loss of jobs. This in turn assumes that the exports of the source country will fall as FDI substitutes for trade.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment, Economic growth
  • Political Geography: Africa, Liberia, Sierra Leone, Senegal, Mali, Guinea, Guinea-Bissau, Cape Verde, Gambia
  • Author: Suresh Naidu, Dani Rodrik, Gabriel Zucman
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: We live in an age of astonishing inequality. Income and wealth disparities between the rich and the poor in the United States have risen to heights not seen since the gilded age in the early part of the 20th century, and are among the highest in the developed world. Median wages for American workers remain at 1970s levels. Fewer and fewer among newer generations can expect to do better than their parents. Organizational and technological changes and globalization have fueled great wealth accumulation among those able to take advantage of them, but have left large segments of the population behind. U.S. life expectancy has declined for the third year in a row in 2017, and the allocation of healthcare looks both inefficient and unfair. Advances in automation and digitization threaten even greater labor market disruptions in the years ahead. Climate change fueled disasters increasingly disrupt everyday life. Greater prosperity and inclusion both seem attainable, yet the joint target recedes ever further.
  • Topic: Economics, Capitalism, Inequality, Economic Policy, Economic Theory
  • Political Geography: United States
  • Author: Anat R. Admati
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: The financial system is fragile and distorted because current rules fail to counter the distorted incentives by banking institutions to borrow excessively and to remain opaque. Better-designed rules to reduce the reliance on debt and ensure that institutions use significantly more equity would enable the financial system to serve society better. Revising counterproductive tax and bankruptcy codes that, together with the extensive safety net offered to the financial system currently encourage dangerous conduct, would also be beneficial.
  • Topic: Economics, International Trade and Finance, Finance, Economic Policy, Economic Theory, Macroeconomics
  • Political Geography: United States
  • Author: Sandra E. Black, Jesse Rothstein
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: While private provision of goods often yields the efficient outcome, there are a number of goods that are not efficiently provided in the private market. Here, we outline two such situations: investments in child care and education, and insurance against risks created by business cycles, poor health, and old age. Because private markets work poorly for these goods, and the costs of market failure are large, standard economic reasoning implies a significant role for government provision. The reduction in economic insecurity that this would bring could help to improve political stability as well, by reducing the stakes that people perceive in discussions of trade, immigration, technological change, and countercyclical policy (Inglehart and Norris, 2016). Many observers (e.g, Hacker, 2018) have pointed to economic anxiety as a potential contributor to populist reactions in the U.S. and many European countries; a public sector that acts to reduce the risk that households face could ameliorate this, generating political spillovers and improving the state of the country more broadly.
  • Topic: Economics, Education, Health, Health Care Policy, Children, Economic Policy, Economic Theory
  • Political Geography: United States, Europe
  • Author: Ethan Kaplan
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: In sum, political institutions in the United States favor higher income individuals over lower income individuals and ethnic majorities over ethnic minorities. This is accomplished through a myriad of policies which impact who votes, allow for differential influence and access by the wealthy, structure voting districts to dilute the impacts of under-represented voters, and allow for oversized influence of pro-business owner ideas through media and membership organizations.
  • Topic: Economics, Law, Elections, Democracy, Economic Policy, Voting
  • Political Geography: United States
  • Author: Anton Korinek
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: As technology advanced in recent decades, it increasingly left workers behind and led to sharp increases in inequality. The current wave of progress in artificial intelligence is likely to accelerate these trends. This note lays out three complementary approaches to countering these developments. Firstly, since technological progress generates net gains for society as a whole, the winners could in principle compensate the losers and still be better off. Secondly, progress should be steered to minimize the losses of workers. Thirdly, there is an important role for government intervention in information technology to thwart the rise of monopolies that extract rents from society. The note concludes with some speculations on the impact of artificial intelligence increasingly rivaling human labor.
  • Topic: Economics, Science and Technology, Labor Issues, Economic Policy, Macroeconomics, Artificial Intelligence
  • Political Geography: United States
  • Author: Atif Mian
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: There has been a major structural shift in financial markets since the 1980s. The world is awash in credit, and credit is cheaper than ever before. I discuss how increasing financial surpluses within parts of the economy have resulted in an expansion in the supply of credit, which has largely financed the demand-side of the real economy. This increasing reliance on “credit as demand” raises some serious policy questions going forward. I discuss the importance of equitable and inclusive growth, fair taxation system and risk-sharing in creating a financial system that promotes prosperity and stability.
  • Topic: Economics, International Trade and Finance, Finance, Economic Policy, Economic Theory
  • Political Geography: United States
  • Publication Date: 01-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Private sector union density in the United States has fallen below 7%, but new historical evidence shows high union density played an important role in compressing the US income distribution at mid-century and lowering intergenerational income persistence. Other recent evidence on pervasive labor market power suggests that unions may be able raise wages without severe dis-employment effects, and may alleviate inefficient contracting problems. Despite substantial survey evidence indicating latent demand for unions, employers have successfully fought unionization efforts in rising service sectors, and a combination of legal restrictions and economic transformations have impaired the ability of US unions to solve collective action problems at the appropriate scale – an issue that economics may be able to help ameliorate.
  • Topic: Economics, Labor Issues, Income Inequality, Labor Policies
  • Political Geography: United States
  • Author: Jonathan B. Baker, Fiona Scott Morton
  • Publication Date: 05-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Rising market power in the U.S. economy is not just a microeconomic problem, as the textbook analysis shows, creating allocative efficiency losses and transferring wealth away from victimized participants in the affected markets. Rising market power also undermines inclusive prosperity by contributing to inequality and slowed economic growth. Modern economic research points to multiple ways to attack market power and enhance competition, including ways of strengthening antitrust enforcement, improving antitrust rules and institutions, and deploying regulation to enhance competition.
  • Topic: Economics, Economic Policy, Economic Theory, Macroeconomics, Microeconomics
  • Political Geography: United States
  • Author: José Azar, Ioana Marinescu, Marshall Steinbaum
  • Publication Date: 05-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Starting with the Chicago School’s influence in the late 1970s and 1980s, antitrust enforcement has been weakened under the assumption that market power is justified by economic efficiency. While consumers are the main focus of antitrust enforcement, the weakening of antitrust enforcement has likely also adversely impacted workers, thus contributing to increasing inequality.
  • Topic: Economics, Labor Issues, Economic Policy, Economic Theory, Antitrust Law
  • Political Geography: United States
  • Author: Daron Acemoglu
  • Publication Date: 06-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Progressive policy proposals that would have appeared radical just a few years ago, including high marginal tax rates, wealth taxes, universal basic income, single-payer health insurance, and free college for all, are now on the agenda. The recognition that we can do more to create shared prosperity — that is, economic growth benefiting society at large, not just corporations and the very well-educated — is a welcome development. But are we targeting the right policies? We are at a critical juncture both economically and politically. We do not have much time left to reverse the trend towards greater inequality and worsening economic prospects for less educated Americans before its social consequences become more deeply ingrained. And the 2020 presidential election may provide a unique opportunity to adopt fundamentally different economic policies. Failing to identify the right policy priorities would not only squander this critical juncture; it could also deepen the rift between the different wings of US politics.
  • Topic: Economics, Labor Issues, Employment, Labor Policies, Economic Policy, Economic Theory
  • Political Geography: United States
  • Author: Ilyana Kuziemko
  • Publication Date: 07-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: My read of the evidence (and my own social welfare weights, which place great weight on the un- and under-insured as well as middle-class workers who are implicitly taxed via expensive health plans) lead me to conclude that Medicare for All would increase welfare in the US. However, I also want to highlight what I consider the biggest risks of such a policy.
  • Topic: Economics, Health, Health Care Policy, Economic Policy
  • Political Geography: United States
  • Author: David Deming
  • Publication Date: 06-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Despite growing public concern about the cost of college, higher education is still the best investment a young person can make. The American public understands that college is both increasingly necessary and increasingly unaffordable. This dynamic explains the growing public conversation around the idea of “free college”.
  • Topic: Economics, Education, Economic Policy, Higher Education
  • Political Geography: United States
  • Author: David Klenert, Linus Mattauch
  • Publication Date: 08-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: It is common knowledge among economists that the most efficient instrument to mitigate climate change is a price on carbon. However, current carbon prices around the world are too low to reach global climate targets. This essay assesses the difficulties in designing successful carbon pricing reforms. It discusses how to overcome these difficulties by combining traditional public economics lessons with findings from behavioral and political science. We stress insights from public finance about the “second-best” nature of pricing carbon reforms. Further, we highlight how framing a carbon tax reform around tangible benefits can enhance political support. Finally, we explain how certain countries were successful at introducing high carbon prices and what can be learned from these cases for making progress with climate change mitigation.
  • Topic: Climate Change, Economics, Science and Technology, Natural Resources, Global Warming, Green Technology, Economic Policy
  • Political Geography: United States
  • Author: Şebnem Kalemli-Özcan
  • Publication Date: 10-2019
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: There has been a large increase in corporate leverage in many countries since the early 2000s. Figure 1 plots corporate debt to GDP since 2002 for different groups of countries. With the exception of the U.S., both advanced economies and emerging markets have corporate debt exceeding GDP since 2005. U.S. corporate debt is also on an increasing trend. The fastest growth in corporate debt has been observed in emerging markets. A closer look will reveal that China and other fast growing emerging countries in Asia drive most of the increase in corporate debt for the emerging markets.
  • Topic: Debt, Economics, Markets, Regulation, Multinational Corporations, Economic Policy
  • Political Geography: United States, Global Focus
  • Author: Mirriam Muhome-Matita, Ephraim Wadonda Chirwa
  • Publication Date: 07-2018
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: Agriculture remains the most important sector in sub-Saharan Africa and is a dominant form of livelihood for a majority of the population that resides in the rural areas. In Malawi, agriculture accounts for 35 percent of GDP and generates more than 80 percent of foreign exchange. In addition, agriculture is the most important occupation for 71 percent of the rural population in which crop production accounts for 74 percent of all rural incomes. However, agriculture has failed to get Africa out of poverty, and most countries are experiencing low agricultural growth, rapid population growth, weak foreign exchange earnings and high transaction costs (World Bank, 2008).
  • Topic: Agriculture, Economics, Political Economy, Poverty, World Bank, Economic growth, Rural
  • Political Geography: Africa, Malawi
  • Author: Arindrajit Dube
  • Publication Date: 12-2018
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: During the past 40 years, the United States has experienced a sharp and sustained rise in wage and income inequality. The high level of inequality in the United States reflects both a disconnect between (1) average wages and productivity, and (2) top and bottom wages.
  • Topic: Economics, Labor Issues, Income Inequality, Labor Policies, Wage Subsidies, Economic Policy, Economic Theory
  • Political Geography: United States
  • Author: Dani Rodrik
  • Publication Date: 12-2018
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Theory and empirics both suggest that international trade has sharp distributional implications. Furthermore, redistribution caused by trade is often viewed by the general public as more harmful or disruptive than other domestic market shocks. I discuss conditions under which there may be a legitimate case for restricting trade to promote domestic social inclusion, and propose a specific policy – a social safeguards clause – targeting those circumstances.
  • Topic: Economics, Globalization, International Trade and Finance, Economic Policy, Economic Theory, Trade Liberalization
  • Political Geography: Global Focus
  • Author: Gabriel Zucman
  • Publication Date: 09-2018
  • Content Type: Policy Brief
  • Institution: Economics for Inclusive Prosperity (EfIP)
  • Abstract: Globalization and the rise of intangible capital have increased tax avoidance opportunities for large firms dramatically. 40% of multinational profits are shifted to tax havens each year globally and the United States loses about 15% of its corporate income tax revenue because of this shifting. I discuss the evidence on the redistributive effects of international tax competition. I then present a proposal to reform the corporate tax that would remove any incentive for firms to shift profits or move real activity to lowtax places. Contrary to a widespread view, it is possible to tax multinational companies (potentially at high rates) in a globalized world, even in the absence of international policy coordination.
  • Topic: Economics, Globalization, Regulation, Multinational Corporations, Tax Systems, Economic Policy, Economic Theory
  • Political Geography: Global Focus
  • Author: Masahito Ambashi
  • Publication Date: 01-2017
  • Content Type: Policy Brief
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: This policy brief presents an overview of the ASEAN economy in terms of its economic relationship with multinationals, particularly Japanese companies, that have long invested in this region. ASEAN has been an attractor of foreign direct investment (FDI). Business interest in ASEAN has increased again recently due to the (i) relatively low wage of ASEAN compared to China, (ii) establishment of the ASEAN Economic Community (AEC), (iii) economic partnership network with a core of ASEAN countries, (iv) large-scale market covered by ASEAN, and (v) rise of CLMV countries (Cambodia, Lao PDR, Myanmar, and Viet Nam). In these trends, ASEAN has established a reciprocal economic relationship with other countries and regions. To develop its economy, ASEAN member states are expected to further advance the AEC at a high level. Hence, ASEAN must address challenges such as deepening further economic integration and narrowing development gaps in the region. Most importantly, ASEAN still needs to increase the attractiveness of its 'whole region' as an essential and integral part of global value chains to draw further FDI.
  • Topic: Economics, International Political Economy, International Trade and Finance, Global Political Economy
  • Political Geography: Japan, Southeast Asia
  • Author: Andre Sapir, Dirk Schoenmaker, Nicolas Veron
  • Publication Date: 02-2017
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The United Kingdom’s exit from the European Union creates an opportunity for the remaining EU27 to accelerate the development of its financial markets and to increase its resilience against shocks. Equally, Brexit involves risks for market integrity and stability, because the EU including the UK has been crucially dependent on the Bank of England and the UK Financial Conduct Authority for oversight of its wholesale markets. Without the UK, the EU27 must swiftly upgrade its capacity to ensure market integrity and financial stability. Furthermore, losing even partial access to the efficient London financial centre could entail a loss of efficiency for the EU27 economy, especially if financial developments inside the EU27 remain limited and uneven.
  • Topic: Economics, International Political Economy, International Trade and Finance, Political stability, Brexit
  • Political Geography: Britain, Europe
  • Author: Zsolt Darvus
  • Publication Date: 01-2017
  • Content Type: Policy Brief
  • Institution: Bruegel
  • Abstract: The ‘poverty’ target set by the European Commission aims to lift “over 20 million people out of poverty” between 2008 and 2020 in the EU27. Progress to date against this target has been disappointing. Why is it so hard to reach the Europe 2020 ‘poverty’ target? What does the poverty indicator actually measure?
  • Topic: Economics, International Political Economy, International Trade and Finance, Poverty
  • Political Geography: Europe
  • Author: John Baptist D. Jatoe, Ramatu Al-Hassan, Bamidele Adekunle
  • Publication Date: 12-2017
  • Content Type: Policy Brief
  • Institution: African Economic Research Consortium (AERC)
  • Abstract: Ghana’s post adjustment growth and poverty reduction performance has been hailed as impressive, albeit with spatial disparities in the distribution of welfare, especially between the north and south of the country. Researchers generally agree that economic growth does not always reduce poverty. Indeed, the effectiveness of growth in reducing poverty depends on the level of inequality in the population. Growth that increases inequality may not reduce poverty; growth that does not change inequality (distribution-neutral growth) and growth that reduces inequality (pro-poor growth) result in poverty reduction. Policy makers can promote pro-poor growth by empowering the poor to participate in growth directly. Policy makers can focus on interventions that improve productivity in smallholder agriculture, particularly export crops, increasing employment of semi-skilled or unskilled labour, promoting technology adoption, increasing access to production assets, as well as effective participation in input and product markets. Also, increasing public spending on social services and infrastructure made possible by redistribution of the benefits of growth benefits the poor, indirectly.
  • Topic: Agriculture, Economics, Poverty, Labor Issues, Economic growth, Labor Policies, Economic Policy, Macroeconomics
  • Political Geography: Africa, Ghana
  • Author: David S. Mitchell, Jeremy Smith
  • Publication Date: 01-2016
  • Content Type: Policy Brief
  • Institution: Aspen Institute
  • Abstract: On November 18, 2015, the Obama Administration's Department of Labor (DOL) published two important legal opinions that propose to give states new options for expanding retirement coverage for private-sector workers. These opinions open the door for states to move forward along one of two distinct paths: a payroll deduction plan that avoids ERISA, or a more traditional model that would fall under ERISA. This issue brief summarizes these rules and highlights the tradeoffs state policymakers will face when deciding which of these new avenues to pursue. The brief will be updated once the proposals are finalized.
  • Topic: Economics, Human Welfare, Labor Issues, Governance, Social Movement
  • Political Geography: United States
  • Author: Jason Thistlethwaite, Melissa Menzies
  • Publication Date: 01-2016
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: To promote climate change risk mitigation in financial markets, the Financial Stability Board recently proposed the creation of a Climate Disclosure Task Force, coordinated through the G20, to develop standards for companies to disclose their exposure to climate change risks. With more than 400 existing disclosure schemes, this task will be challenging. This brief identifies the key categories of governance practices that must be addressed, how these divergent practices challenge end-users, and how the establishment of criteria that define effective and efficient reporting is a critical first step for the Climate Disclosure Task Force.
  • Topic: Climate Change, Economics, Markets, Financial Crisis
  • Political Geography: Global Focus
  • Author: Susan Schadler
  • Publication Date: 04-2016
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: Research on links between the level of a country’s public debt and its broader economic developments has been heatedly debated in the economic literature. Two strands of the research stand out — one linking the level of debt to a country’s GDP growth rate and the other examining the debt level as an EWI of economic crises. As a broad generalization, research at the moment favors the view that high levels of debt are not a cause, in and of themselves, of low growth nor are they particularly good predictors of impending economic or even debt crises. In principle, the empirical findings have obvious implications for policy makers confronting the question of how to fashion policies (and fiscal policy in particular) when a country has a high debt burden. The IMF, as both a contributor to the literature and an adviser concerned with preventing or dealing with debt crises, has a particularly important stake in navigating the findings. Whether in its surveillance (routine annual advice to all member countries) or the construction of its lending programs to support countries in or near crisis, the IMF must answer the question “how much does the level of debt matter?” Despite the empirical research that casts doubt on the importance of debt, the level of debt figures prominently in the algebra of debt sustainability and the IMF’s real world policy advice. This policy brief examines the nexus of the relatively strong conclusions coming from the academic research and the IMF’s policy advice. It addresses the following question: given that the broad conclusion from the academic literature is that the level of debt itself is not systematically bad for growth or stability, why does the debt level seem to figure rather prominently in the IMF’s policy advice and conditionality?
  • Topic: Debt, Development, Economics, International Monetary Fund, Financial Crisis, GDP, Global Markets
  • Political Geography: Global Focus
  • Author: Samuel Howorth, Domenico Lombardi, Pierre Siklos
  • Publication Date: 02-2016
  • Content Type: Policy Brief
  • Institution: Centre for International Governance Innovation
  • Abstract: Students of macroeconomics will have heard about the central role played by the so-called Phillips curve in both theoretical and empirical analyses for almost 70 years. In 1958, A. W. Phillips reported an inverse relationship between changes in wages and the unemployment rate (Phillips 1958). The progeny of his thinking led to a revolution both in policy making and in the development of theoretical links between the real and nominal macroeconomic variables. Names such as Samuelson, Solow, Phelps, Friedman, Lucas and Sargent became associated with refinements and enhancements of the core finding reported by Phillips. Indeed, all of these economists went on to become Nobel laureates in economics, although not exclusively because of their contributions to the analysis of what has since been called the Phillips curve. Indeed, the concept is so influential that it spawned several different versions of the trade-off used to guide policy makers as a menu for the choices they face when deciding whether the gains from lower inflation are offset by the economic costs of higher unemployment. Initially, expectations of individuals or firms were ignored. This briefly gave policy makers the impression that they could simply select an inflation-unemployment combination and implement the necessary policy mix to achieve the desired outcome. Once a role for expectations was incorporated, debate centred on how forward-looking individuals are. The more forward-looking, the less likely it was that policy makers would be able to “exploit” the trade-off because, unless wages rose in purchasing-power terms, the gains from lower unemployment would, at best, be temporary once workers realized that the higher inflation, at unchanged wages, actually drives real wages down. Indeed, the pendulum swung all the way to the conclusion — reached by the 1970s and early 1980s — that the Phillips curve was illusory and there was no trade-off policy makers could exploit.
  • Topic: Economics, Human Welfare, International Political Economy, Labor Issues, Global Markets
  • Political Geography: Global Focus
  • Author: Wei Wang, Gemma Estrada, Jurgen Conrad, Sang-Hyo Lee, Donghyun Park
  • Publication Date: 05-2016
  • Content Type: Policy Brief
  • Institution: East-West Center
  • Abstract: As demand from global markets declines, slowing exports of manufactured goods from the People's Republic of China means the country must increasingly rely on domestic markets for growth. Unlike manufactured goods, services—those "intangible" products that include everything from transportation to scientific research to real estate services—are geared more toward domestic markets. Services, then, will be key to the rebalancing process. However, while the service sector has grown rapidly in the PRC, it continues to lag behind other countries at similar stages of development. In addition, the sector is dominated by traditional low-end types of services, rather than knowledge-intensive services. Heavy regulatory burdens, barriers to trade in services, and an unfavorable policy environment have been major obstacles to upgrading the sector and improving its competitiveness. Policy reform should focus on strengthening competition to raise productivity, with the goal of increasing not only the number of jobs and contribution to GDP, but also of positioning the service sector to compete internationally and spur export growth.
  • Topic: Economics, Markets, Reform, GDP
  • Political Geography: China
  • Author: Marek Wasinski
  • Publication Date: 04-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: In a communication of 12 April, the European Commission assessed the potential political and economic consequences of suspending visa exemption for U.S. citizens. Lacking pressure from individual EU Member States, the Commission discouraged such a move and gave the EU Council and European Parliament three months to take an official position. It seems almost certain that the measure of applying pressure on a non-EU country will not be used to help Poland and four other Member States obtain visa-free travel to the United States or other countries with a similar restriction. However, if current trends continue, Poland should join the U.S. Visa Waiver Programme in five years.
  • Topic: Economics, Politics, European Union, Citizenship
  • Political Geography: United States, Europe
  • Author: Carolina Salgado, Marek Wasinski
  • Publication Date: 03-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: The Visegrad Group is still a new label among policy makers as well as public and private investors, scholars and media in Brazil. However, since their accession to the EU in 2004, and the financial crisis that started in 2008, the four Central European countries in this group have started to look beyond Europe in order to formulate their economic and political agenda, aiming to boost partnerships, for example among the biggest South American countries such as Brazil. V4 and Brazil should build momentum to deepen cooperation in the most promising prospective areas such as trade, military, tourism and education.
  • Topic: Economics, International Trade and Finance, Politics, Financial Crisis
  • Political Geography: Brazil
  • Author: Justyna Szczudlik
  • Publication Date: 02-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: Asia could be described as the world’s great construction site, and is already the focus of a scramble for infrastructure projects. Among countries competing for investments are not only China with its Silk Road initiative, but also Korea, Japan, India and ASEAN, which have prepared their own infrastructural strategies. The plethora of initiatives may have a positive impact on Asia, offering diverse solutions to the infrastructural bottleneck and reforms of existing institutions and modes of assistance. But there is also the risk that fierce competition may result in unprofitable projects, while economic slowdown could cause a decline in funding. For Europe these initiatives create opportunities to take part in new projects, but the EU should be aware that the projects will be implemented mainly in Asia and by Asian countries.
  • Topic: Economics, International Trade and Finance, Infrastructure, Reform
  • Political Geography: Asia
  • Author: Tomasz Żornaczuk
  • Publication Date: 02-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: At the beginning of 2016, almost 13 years after the Thessaloniki declaration to integrate the Western Balkans into the European Union, Brussels is left with Croatia as a Member State, Montenegro half way, at best, to becoming one, Serbia with first negotiation chapters just opened, and half of the region with no clear prospect of membership. But the wait-and-see approach that the EU had been employing for a number of years towards the enlargement policy in the Balkans has become even riskier in times of new international challenges. Among them, the ever-growing tensions between the West and Russia should, in particular, serve as motivation for the Union to look at enlargement in the Balkans from a geopolitical angle. Even if the Member States have in recent years shown less enthusiasm towards further rounds of enlargement, this should not discourage the EU institutions from undertaking an active role to revive the European integration process in the Balkans.
  • Topic: Economics, Regional Cooperation, European Union, Geopolitics
  • Political Geography: Serbia, Croatia
  • Author: Damian Wnukowski
  • Publication Date: 02-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: The transformation of ASEAN into an economic community is a significant step in the organisation’s integration process. The project, formally launched at the beginning of 2016, aims at creation of a single market of more than 620 million people, loosens the flow of goods, services and investment, which should underpin regional economic growth and catch the attention of foreign businesses. However, obstacles to economic cooperation remain, such as limitations on the movement of labour or capital, which shows that the integration process is not yet complete. The EU, which can benefit from a well-functioning market in this region, should share its own experience to support the ASEAN integration process.
  • Topic: Economics, International Trade and Finance, Markets, Politics, Labor Issues
  • Political Geography: Europe
  • Author: Stanislav Secrieru
  • Publication Date: 01-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: Although Transnistria, in exchange for meeting certain conditions, was allowed to benefit from the free trade agreement that Moldova signed with the EU, there are plenty of obstacles which could derail the deal. The business community in the breakaway republic is eager to enjoy the fruits of the DCFTA but is reluctant to shoulder the price of necessary reforms, the outgoing leader of the separatist enclave could undermine the agreement for electoral reasons, Russia might be tempted to test the EU’s resolve to defend its trade-related norms, and Moldova could erect bureaucratic barriers for producers from the left bank of the Nistru River. In the light of these many risks, the EU should persistently encourage all sides to stick to their commitments while averting disputes that would undermine enforcement of the DCFTA in Transnistria in a timely manner.
  • Topic: Economics, International Trade and Finance, Politics, Elections, European Union
  • Political Geography: Moldova, Transnistria
  • Author: Piotr Kościński
  • Publication Date: 01-2016
  • Content Type: Policy Brief
  • Institution: The Polish Institute of International Affairs
  • Abstract: At a time when many European countries are strengthening border protection (including building walls), migrants will seek new avenues to Europe. In this context and of particular importance will be the policy of the authorities of Ukraine, which currently, and despite the still unstable situation in the country (war in the east and economic problems) could become the country of choice for migrants. Another problem for Kyiv may be internal migration. Both forms increase the risk of migration to EU countries such as Poland, Hungary, Slovakia and Romania, which are neighbours of Ukraine. In this situation, additional EU assistance to the authorities in Kyiv will be necessary.
  • Topic: Economics, Migration, Politics, Governance
  • Political Geography: Europe, Ukraine
  • Author: Fukunari Kimura, Lurong Chen
  • Publication Date: 03-2016
  • Content Type: Policy Brief
  • Institution: Economic Research Institute for ASEAN and East Asia (ERIA)
  • Abstract: As mega free trade agreements (FTAs) are reshaping the rules of global governance, there is urgency for member states of the Association of Southeast Asian Nations (ASEAN) to take proper actions in response to the changing world economic order. On one hand, they should closely observe the progress of negotiations and follow up the issues that are under discussion in mega FTAs. On the other hand, they have to accelerate the pace in concluding the negotiations of the Regional Comprehensive Economic Partnership (RCEP).
  • Topic: Economics, International Trade and Finance, Global Political Economy
  • Political Geography: Southeast Asia, Global Focus