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Begin New Search Topic Global Political Economy Political Geography Global Focus Content Type Working Paper

1. Post-American Moments in Global Financial Governance in the New Millennium

Author:
Ilene Grabel
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
It is difficult to find much to celebrate about the current conjuncture, marked as it is by deeply destructive incoherence. The best that can be said is that we are in an interregnum. But I suggest that today’s incoherence also includes productive and even transformative moments. I argue that incoherence in global financial governance should be understood as productive in several respects. It is creating and widening alternative spaces in which some of the values, practices, tools, objectives, and goals associated with embedded liberalism can be rearticulated in a world in which there is no “order,” American-led or otherwise. The silver lining of incoherence is that it creates space for experimentation and innovation unconstrained by an overarching “ism.” Incoherence is creating exits or leakages from noxious national and global policy environments, rendering it less poisonous than it would be in the absence of ideational aperture and contestation, competing policies, institutions, networks, and poles of power. The abdication by the US of its traditional role of global coordination and discipline, as exerted under the post-war embedded liberal or the neoliberal American-led orders, is creating opportunities for more permissive and varied “reembededness” and diverse forms of economic integration. The emerging regime reflects neither your grandmother’s American-led order 1.0 or 2.0. In this morbid post-American interregnum there is no singular “ism” or “alternative order,” a fact that I do not mourn.
Topic:
Governance, Finance, Global Political Economy, and Neoliberalism
Political Geography:
Global Focus and United States of America

2. Reducing mobility of SARS-CoV-2 variants to safeguard containment

Author:
Martin Hellwig, Viola Priesemann, and Guntram Wolff
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Escape variants can cause new waves of COVID-19 and put vaccination strategies at risk. To prevent or delay the global spread of these waves, virus mobility needs to be minimised through screening and testing strategies, which should also cover vaccinated people. The costs of these strategies are minimal compared to the costs to health, society and economy from another wave.
Topic:
Health, Governance, Global Political Economy, Vaccine, and COVID-19
Political Geography:
Global Focus

3. Forecasting exchange rates of major currencies with long maturity forward rates

Author:
Zsolt Darvas and Zoltan Schepp
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper presents unprecedented exchange rate forecasting results based upon a new model which approximates the gap between the fundamental equilibrium exchange rate and the actual exchange rate with the long-maturity forward exchange rate.
Topic:
Economics, Governance, Global Political Economy, and Exchange Rate Policy
Political Geography:
Global Focus

4. How ‘demos’ met ‘cracy’: debt, inequality, money

Author:
Andreas Antoniades and Ugo Panizza
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
The recurrence of ever more destructive economic crises and patterns of pervasive indebtedness and inequality threaten the social fabric of our societies. Our main responses to these trends have been partial, focusing on symptoms rather than causes, often exacerbating rather than improving the underlying socio-economic dynamics. To reflect on these conditions and on ‘what needs to be done’ this paper turns to a similar socio-economic malaise faced by the city-state of Athens in the 6th century BC. Most historical studies dealing with this crisis focus on the comprehensive debt relief policy (seisachteia) implemented by Solon. We argue that this debt relief, although necessary, was the least important of Solon’s reforms. Solon read the problem of debt as a problem of money so he went on to reform the monetary and exchange system. But he did not think that these reforms alone could restore socioeconomic sustainability. For this, a redefinition of what was counted as valuable economic activity and as income had also to take place. And for all these to work, citizens had to be involved more in the commons. Far from only achieving socioeconomic sustainability, these reforms gave rise gradually to the demos that we meet in the golden age of Democracy. It is indeed interesting that Democracy, in its ideal type of the 5th century BC, finds its origin in the way in which a society responded to a major socioeconomic crisis, characterised by pervasive indebtedness and destabilising inequalities. Such a broader historical horizon may help us grasp better the problems, stakes and challenges of our times.
Topic:
Debt, Political Economy, History, Democracy, and Global Political Economy
Political Geography:
Greece and Global Focus

5. Putting Global Governance in its Place

Author:
Dani Rodrik
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
In a world economy that is highly integrated, most policies produce effects across the border. This is often believed to be an argument for greater global governance, but the logic requires scrutiny. There remains strong revealed demand for policy and institutional diversity among nations, rooted in differences in historical, cultural, or development trajectories. The canonical case for global governance is based on two set of circumstances. The first occurs when there is global public good (GPG) and the second under “beggar-thy-neighbor” (BTN) policies. However, the world economy is not a global commons, and virtually no economic policy has the nature of a global public good (or bad). And while there are some important BTN policies, much of our current discussions deal with policies that are not true BTNs. The policy failures that exist arise not from weaknesses of global governance, but from distortions of domestic governance. As a general rule, these domestic failures cannot be fixed through international agreements or multilateral cooperation. The paper closes by discussing an alternative model of global governance called “democracy-enhancing global governance.”
Topic:
International Trade and Finance, Governance, Global Political Economy, and Trade Wars
Political Geography:
Global Focus and Global Markets

6. How ETFs Amplify the Global Financial Cycle in Emerging Markets

Author:
Nathan Converse, Eduardo Levy Yeyati, and Tomas Williams
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Since the early 2000s exchange-traded funds (ETFs) have grown to become an important in- vestment vehicle worldwide. In this paper, we study how their growth affects the sensitivity of international capital flows to the global financial cycle. We combine comprehensive fund- level data on investor flows with a novel identification strategy that controls for unobservable time-varying economic conditions at the investment destination. For dedicated emerging mar- ket funds, we find that the sensitivity of investor flows to global financial conditions for equity (bond) ETFs is 2.5 (2.25) times higher than for equity (bond) mutual funds. In turn, we show that in countries where ETFs hold a larger share of financial assets, total cross-border equity flows and prices are significantly more sensitive to global financial conditions. We conclude that the growing role of ETFs as a channel for international capital flows amplifies the global financial cycle in emerging markets.
Topic:
Emerging Markets, International Trade and Finance, Global Political Economy, Capital Flows, and Mutual Funds
Political Geography:
Global Focus and Global Markets

7. The Political Economy of Europe since 1945: A Kaleckian perspective

Author:
Joseph Halevi
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes the early stages of the formation of the Common Market. The period covered runs from the end of WW2 to 1959, which is the year in which the European Payments Union ceased to operate. The essay begins by highlighting the differences between the prewar political economy of Europe and the new dimensions and institutions brought in by the United States after 1945. It focuses on the marginalization of Britain and on the relaunching of French great power ambitions and how the latter determined, in a very problematical way, the European complexion of France. Because of France’s imperial aspirations, France, not West Germany, emerged as the politically crisis prone country of Europe acting as a factor of instability thereby jeopardizing the process of European integration, Among the large European nations, Germany and Italy appear, for opposite economic reasons, as the countries most focused on furthering integration. Germany expressed the strongest form of neomercantilism while Italy the weakest.
Topic:
Economics, Political Economy, Global Political Economy, World War II, and Common Market
Political Geography:
United States, Europe, Germany, and Global Focus

8. Technological Disruption in the Global Economy

Author:
Commission on Global Economic Transformation
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Technology has become the most powerful disruptive force in our economy. It bears on the future of work, competition, market power, and national security, and it binds the other major areas of our commission’s investigation: macroeconomics and finance, globalization, and climate change. In essence, technological progress propels global economic transformation. Our gathering on February 6, 2019 brought economists together with leading voices from academia, labor, private industry, and the nonprofit/NGO sector. We heard from industry leaders with deep roots and history in the Silicon Valley technology revolution, academics who have also spent time in the policy arena, and from individuals who are already considering new models and approaches to digital rights and the future of work. Our discussion was by no means exhaustive or conclusive, but we attempted to harness the group’s collective wisdom to address some of the most vexing questions of our day. This document is intended to inform our commissioners as they develop CGET’s final report and to share our timely conversation with policymakers and the general public. Fomenting multidisciplinary, critical discourse is one of the most important responsibilities of this initiative, and we sincerely thank the staff at the Institute for New Economic Thinking (INET), our dedicated commissioners, and our outside thought leaders for helping us to promote this dialogue.
Topic:
Economics, Science and Technology, Global Markets, Digital Economy, Global Political Economy, and Macroeconomics
Political Geography:
United States and Global Focus

9. The Evolution and Current Status of De Facto Stare Decisis in International Trade and Investment Tribunals: How to Understand the Present by Looking into the Past

Author:
Chanya Punyakumpol
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Is there a doctrine of 'stare decisis' in international trade and international investment law? From a positive law perspective, the answer is a definite no. However, as many scholars have observed, in practice, there has been a strong level of deference from the Appellate Body to its previous rulings, but less so from investment tribunals. Using social network analysis to assess actual citations from the Appellate Body Reports and investment arbitrations from the inception to the current time, this paper examines the evolution and 'status quo' of citation networks in international trade and international investment arbitrations. It asks, not only whether there is a 'de facto' rule of precedent in the two regimes, but also when it occurs and how the development links with the institutional design of dispute settlement. The results show how the doctrine of 'stare decisis' diverges in international trade and international investment, as well as the importance of institutional design in shaping and constraining the behaviors of tribunals.
Topic:
Economics, Globalization, International Trade and Finance, Law, Finance, and Global Political Economy
Political Geography:
Global Focus

10. Tax Audits as Scarecrows: Evidence from a Large-Scale Field Experiment

Author:
Ricardo Perez Truglia, Matias Giaccobasso, Guillermo Cruces, Rodrigo Ceni, and Marcelo Bergolo
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The canonical model of Allingham and Sandmo (1972) predicts that firms evade taxes by optimally trading off between the costs and benefits of evasion. However, there is no direct evidence that firms react to audits in this way. We conducted a large-scale field experiment in collaboration with Uruguay’s tax authority to address this question. We sent letters to 20,440 small- and medium-sized firms that collectively paid more than 200 million dollars in taxes per year. Our letters provided exogenous yet nondeceptive signals about key inputs for their evasion decisions, such as audit probabilities and penalty rates. We measured the effect of these signals on their subsequent perceptions about the auditing process, based on survey data, as well as on the actual taxes paid, based on administrative data. We find that providing information about audits had a significant effect on tax compliance but in a manner that was inconsistent with Allingham and Sandmo (1972). Our findings are consistent with an alternative model, risk-as-feelings, in which messages about audits generate fear and induce probability neglect. According to this model, audits may deter tax evasion in the same way that scarecrows frighten off birds.
Topic:
Economics, Global Political Economy, Tax Systems, Economic Policy, and Macroeconomics
Political Geography:
United States, Argentina, and Global Focus

11. Emerging Countries in Global Financial Standard Setting: Explaining Relative Resilience and Its Implications

Author:
Andrew Walter
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This special report explores the role of emerging-country members in the Basel process, a key aspect of global financial standard setting. It argues that this process has been significantly more politically resilient than adjacent aspects of global economic governance, in part because major emerging countries have perceived continuing “intra-club” benefits from participation within it. Most important among these are learning benefits for key actors within these countries, including incumbent political leaders. Although some emerging countries perceive growing influence over the international financial standard-setting process, many implicitly accept limited influence in return for learning benefits, which are valuable because of the complexity of contemporary financial systems and the sustained policy challenges it creates for advanced and emerging countries alike. The importance of learning benefits also differentiates the Basel process from other international economic organizations in which agenda control and influence over outcomes are more important for emerging-country governments. This helps to explain the relative resilience of the Basel process in the context of continued influence asymmetries and the wider fragmentation of global economic governance. The report also considers some reforms that could further improve the position of emerging countries in the process and bolster its perceived legitimacy among them.
Topic:
International Trade and Finance, Financial Markets, Global Political Economy, and Emerging States
Political Geography:
Africa, Europe, Asia, South America, Australia, North America, and Global Focus

12. Dealing with the Offshore Economy

Author:
Alan Riley
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Atlantic Council
Abstract:
Given that offshore tax havens are largely located in small, independent states or self-governing territories, it could be assumed that they have little connection to OECD states and major financial centers such as London and New York. This is not the case. The so-called tax havens are in fact part of a much larger network of financial and corporate services that depends on lawyers, accountants, and bankers located in major Western cities. Only one part of the havens’ business actually involves providing lower tax rates to individual foreign account holders
Topic:
International Affairs and Global Political Economy
Political Geography:
Global Focus

13. Busier than Ever? A Data-Driven Assessment and Forecast of WTO Caseload

Author:
Joost Pauwelyn and Weiwei Zhangb
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Conventional wisdom has it that, in recent years, the legalized mechanism of dispute settlement before the World Trade Organization (WTO) has been “busier than ever”, “a victim of its own success”. This paper uses count data to assess the WTO’s current caseload and examines how it has evolved since the WTO’s creation in 1995. We also forecast panel and Appellate Body (AB) caseload ten years from now using different scenarios. WTO dispute settlement does, indeed, currently experience a peak in terms of the total number of cases pending before panels and the AB (as of 30 April 2018, respectively, 18 and 8). However, this is not due to an increase in new cases filed (new consultation requests markedly reduced, from a high of 50 in 1997 to “only” 17 in 2017), but rather because pending cases take much longer to conclude as they have become more complex and are often delayed for lack of human resources. In addition, fewer cases filed get formally settled (from 20% in the first five years of the WTO to almost zero after 2014), appeal rates remain very high (on average 68%), and the share of follow-up disputes over compliance (DSU Art. 21.5) has markedly increased, all three factors leading to more (pending) caseload without actually more (new) cases filed, or more panel or AB reports issued (the number of reports produced per year has actually gone down, dropping from a peak of 26 panel reports and 13 AB reports in 2000, to “only” 13 panel reports and 6 Appellate Body reports in 2017).
Topic:
Economics, International Trade and Finance, World Trade Organization, and Global Political Economy
Political Geography:
Switzerland and Global Focus

14. Customs unions in international law: from concept to practice

Author:
Michal Ovádek and Ines Willemynsa
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Relative to the study of free trade agreements, customs unions (CUs) have been neglected in international law scholarship, despite the fact that by no means do they constitute a recent phenomenon. The present article aims to fill this gap by conducting a scoping analysis of the concept of customs union and identifying key issues in CU designs. The article problematizes what is understood by the concept of CU and what is entailed by the foremost definition of CUs, found in Article XXIV of the General Agreement on Tariffs and Trade (GATT). It further investigates how recurrent design issues are resolved in practice by different CUs considering the inherent tension between the enactment of common rules and institutions and state sovereignty. We find variety in the historical, economic and legal conceptualizations of CUs, flexibility and lacunas in Article XXIV GATT, and diversity of CU designs along with a discernible concern for the legal arrangements’ impact on state sovereignty.
Topic:
Economics, International Trade and Finance, Global Political Economy, and Unions
Political Geography:
Global Focus

15. Global value chains and technology transfer: new evidence from developing countries

Author:
Davide Rigo
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This paper uses the World Bank's Enterprise Surveys as a sample of 18 developing and emerging economies to investigate the causal relationship between global value chains and the transfer of technology to manufacturing firms in developing nations. It focuses on one specific channel for technology transfer, namely the licensing of foreign technology. By using a propensity score matching difference-in-differences technique, I show that there is a positive and causal impact of being involved in complex international activities (i.e. being a two-way trader) on the licensing of technology. Importantly, domestic firms becoming two-way traders are more likely to acquire foreign-licensed technology than domestic firms starting to either export or import. These findings suggest that the complexity associated with the trading activity determines whether or not foreign technology is licensed.
Topic:
Development, Economics, International Trade and Finance, Science and Technology, World Bank, and Global Political Economy
Political Geography:
Global Focus

16. Soft vs Hard Governance for Labour and Environmental Commitments in Trade Agreements: Comparing the US and EU Approaches

Author:
Vandana Gyanchandani
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Three methodologies are used to enforce labour and environmental commitments in the US and EU trade agreements: cooperative, sanctions and composite. In-depth analysis of the scope of commitments, level of protection, institutional framework as well as types of informal and formal dispute processes elucidates the pros and cons of such methodologies. Sanctions approach weakens cooperation by misjudging the complexity of domestic policy adjustments through transnational governance. Cooperative mechanism within the NAAEC's composite design emerges as the best approach: Submission on Enforcement Matters (SEM). As it provides for an independent secretariat supported by civil society group and factual records as a sunshine remedy to review citizen submissions. However, the process is constrained by political clout, lack of managerial capacity and legal dilemmas around informal lawmaking (IN-LAW) procedures.
Topic:
Economics, Environment, International Cooperation, International Trade and Finance, Labor Issues, Sustainable Development Goals, and Global Political Economy
Political Geography:
United States, Europe, Global Focus, and European Union

17. The evolution of the EU law against criminal finance: the "hardening" of FATF standards within the EU

Author:
Leonardo Borlinia and Francesco Montanaro
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This article examines the recent evolution of the EU anti-money-laundering (AML) and counter-terrorist financing (CTF) legislative framework, focusing on the relationship between the main international standards in the field and the newest EU legislation. It suggests that international soft law norms—in particular, the Financial Action Task Force (FATF) Recommendations—have had a decisive influence on the latest development of legislation at the EU level and within its member states. It further argues that mainly the preventive component of the AML/CTF legislation will be strengthened by the EU instruments adopted in mid-2015. However, this Article concludes that the adoption of global soft standards has posed significant challenges to the EU legislative framework. The arguments are developed in four parts. The Article first highlights the main regulatory prescriptions that stem from the study of the phenomenology and the economics of AML/CTF regulation and underpin the current international regulatory paradigm. Second, it explores the evolution of the main international instruments in the field with a special focus on the role played by the FATF Recommendations. It also illustrates the relation between these instruments and the adoption of the new EU AML/CTF legislation from two different, but complementary, angles: (1) noting that the current international AML/CTF framework has a multidisciplinary approach, the Article focuses on the framework's repressive component and assessing the limits of the EU criminal approach against money laundering and terrorist financing; and (2) examining the recent EU preventive legislation and addressing the main challenges posed to the EU legislative framework when attempting to accommodate global standards, especially regarding tensions with fundamental freedoms and human rights protected within the EU.
Topic:
Corruption, Crime, Economics, International Trade and Finance, Law, Finance, and Global Political Economy
Political Geography:
Global Focus

18. Striking a Balance: Straight Talk on the Global Economy

Author:
Michelle Nicholasen
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
or more than two decades, economist Dani Rodrik has warned about the dangers of what he has called “hyperglobalization.” He has long argued that national economies and domestic policies should have priority amidst a rising tide of unfettered globalization and open markets. Today we have some evidence that he was right. Our race toward “one world economy” has produced consequences in the form of global social inequality and populist or extremist political movements, for example. Rodrik envisions a way to keep bringing down trade barriers while maintaining the integrity of the nation-state. His latest book, Straight Talk on Trade, is a synthesis of his monthly columns for Project Syndicate, and functions as a roadmap of Rodrik’s prolific analyses. The Weatherhead Center spoke to him about his long view on world economies.
Topic:
Globalization, Science and Technology, and Global Political Economy
Political Geography:
Global Focus

19. Global Debt Dynamics: What Has Gone Wrong

Author:
Andreas Antoniades and Stephany Griffith-Jones
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
This paper analyses the nature and characteristics of global debt dynamics in the post global financial crisis (GFC) period. First, we attempt to map the ways in which debt has been moving from sector to sector, and from one group of countries to another within the global economy. By capturing this inter-sectorial, inter-national, inter-regional movements of global debt we aspire to contribute to a more comprehensive understanding of global debt and its mode of operation. Second, we attempt to analyse what is wrong with global debt dynamics, i.e. we examine the broken link between what global debt was supposed to do and what it does. Here, we point to three interrelated dynamics: the accumulation of unproductive debt, growing inequalities of income and wealth, and the increase in privately-created, interest-bearing money.
Topic:
Debt, Economics, Global Recession, Financial Crisis, and Global Political Economy
Political Geography:
United States, Global Focus, and Global Markets

20. The Political Economy of Carbon Pricing Policy Design

Author:
Joseph E. Aldy
Publication Date:
10-2017
Content Type:
Working Paper
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
This paper examines the choice between—and design of—CO2 cap-and-trade and tax policies through a political-economy lens. It draws from insights in economics and political economy to highlight important public policy principles and policy options in carbon-pricing policy design. The paper illustrates each of these insights with examples from cap-and-trade and tax-policy experiences. Revealed political preferences about carbon-pricing-policy design can, in practice, inform our understanding of how decision-makers weigh various policy principles, as well as policy objectives. The balance of the paper examines the following design choices: establishing and phasing-in policy targets; setting the point of compliance and scope of coverage; addressing uncertainties in emission and cost outcomes under carbon pricing; updating carbon-pricing targets over time; using revenue and other forms of economic value created by carbon pricing; mitigating adverse competitiveness impacts of pricing carbon; accounting for the existing, complex policy landscape in designing carbon pricing; and linking of carbon-pricing programs. The final section concludes with a discussion of policy implications and next steps for policy-relevant scholarship.
Topic:
International Political Economy, Climate Finance, and Global Political Economy
Political Geography:
Global Focus

21. The Developmental Legacies of the Bifurcated Colonial State: Statistical Evidence from Sixty-Seven British, French, and Portuguese Colonies

Author:
Olukunle P. Owolabi
Publication Date:
04-2017
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
This paper examines the impact of bifurcated colonial institutions—i.e. the use of distinctive legal codes for “native” vs. “settler” populations—for long-term development in 67 former British, French, and Portuguese colonies. Building on theoretical arguments by Mahmood Mamdani (1996) and Matthew Lange’s empirical research on the distinctive developmental legacies of direct vs. indirect British rule, I develop a new measure of legal-administrative bifurcation in French and Portuguese colonies. Consistent with Mamdani’s theoretical arguments, the statistical models in this paper demonstrate that bifurcated colonial institutions contributed to poor development outcomes and ineffective postcolonial governance among British, French, and Portuguese colonies alike. Regardless of the colonizing power, directly ruled colonies with a uniform and inclusive legal-administrative framework have better development outcomes than bifurcated colonial states that maintained distinctive “native” legal codes for indigenous populations. These results are robust to a variety of statistical controls, as well as to instrumental variable analysis, highlighting the enduring legacy of colonial institutions for human well-being and governmental effectiveness today.
Topic:
Post Colonialism and Global Political Economy
Political Geography:
Global Focus

22. The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results

Author:
Michael Clemens and Jennifer Hunt
Publication Date:
05-2017
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
An influential strand of research has tested for the effects of immigration on natives’ wages and employment using exogenous refugee supply shocks as natural experiments. Several studies have reached conflicting conclusions about the effects of noted refugee waves such as the Mariel Boatlift in Miami and post-Soviet refugees to Israel. We show that conflicting findings on the effects of the Mariel Boatlift can be explained by a sudden change in the race composition of the Current Population Survey extracts in 1980, specific to Miami but unrelated to the Boatlift. We also show that conflicting findings on the labor market effects of other important refugee waves can be produced by spurious correlation between the instrument and the endogenous variable introduced by applying a common divisor to both. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and fails to substantiate claims of large detrimental impacts on workers with less than high school.
Topic:
Refugee Issues, Financial Markets, and Global Political Economy
Political Geography:
Global Focus

23. Gender Matters in Economic Empowerment Interventions: A Research Review

Author:
Mayra Buvinic and Megan O'Donnell
Publication Date:
05-2017
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A review of the recent evaluation evidence on financial services and training interventions questions their gender neutrality and suggests that some design features in these interventions can yield more positive economic outcomes for women than for men. These include features in savings and ‘Graduation’ programs that increase women’s economic self-reliance and self-control, and the practice of repeated micro borrowing that increases financial risk-taking and choice. ‘Smart’ design also includes high quality business management and jobs skills training, and stipends and other incentives in these training programs that address women’s additional time burdens and childcare demands. Peer support may also help to increase financial risk taking and confidence in business decisions, and may augment an otherwise negligible impact of financial literacy training. These features help women overcome gender-related constraints. However, when social norms are too restrictive, and women are prevented from doing any paid work, no design will be smart enough. Subjective economic empowerment appears to be an important intermediate outcome for women that should be promoted and more reliably and accurately measured. More research is also needed on de-biasing service provision, which can be gender biased; lastly, whenever possible, results should be sex-disaggregated and reported for individuals as well as households.
Topic:
Gender Issues, International Trade and Finance, and Global Political Economy
Political Geography:
Global Focus

24. Expanding Global Liquidity Insurance: Myths and Realities of the IMF’s Precautionary Credit Lines

Author:
Nancy Birdsall, Liliana Rojas-Suarez, and Anna Diofasi
Publication Date:
02-2017
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Despite increasing volatility in the global economy, the uptake of the IMF’s two precautionary credit lines, the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL), has remained limited—currently to just four countries. The two new lending instruments were created in the wake of the global financial crisis of 2008 to enable IMF member states to respond quickly and effectively to temporary balance of payment needs resulting from external shocks. Both credit lines offer immediate access to considerable sums—over 10 times a country’s IMF quota in some cases with no (FCL) or very limited (PLL) conditionality. This paper addresses four misconceptions (or ‘myths’) that have likely played a role in the limited utilization of the two precautionary credit lines: 1) too stringent qualification criteria that limit country eligibility; 2) insufficient IMF resources; 3) high costs of precautionary borrowing; and 4) the economic stigma associated with IMF assistance. We show, in fact, that the pool of eligible member states is likely to be seven to eight times larger than the number of current users; that with the 2016 quota reform IMF resources are more than adequate to support a larger precautionary portfolio; that the two IMF credit lines are among the least costly and most advantageous instruments for liquidity support countries have; and that there is no evidence of negative market developments for countries now participating in the precautionary lines.
Topic:
International Trade and Finance and Global Political Economy
Political Geography:
Global Focus

25. Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries

Author:
Nora Lustig
Publication Date:
01-2017
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Current policy discussion focuses primarily on the power of fiscal policy to reduce inequality. Yet, comparable fiscal incidence analysis for 28 low and middle income countries reveals that, although fiscal systems are always equalizing, that is not always true for poverty. In Ethiopia, Tanzania, Ghana, Nicaragua, and Guatemala the extreme poverty headcount ratio is higher after taxes and transfers (excluding in-kind transfers) than before. In addition, to varying degrees, in all countries a portion of the poor are net payers into the fiscal system and are thus impoverished by the fiscal system. Consumption taxes are the main culprits of fiscally-induced impoverishment. Net direct taxes are always equalizing and indirect taxes net of subsidies are equalizing in nineteen countries of the 28. While spending on pre-school and primary school is pro-poor (i.e., the per capita transfer declines with income) in almost all countries, pro-poor secondary school spending is less prevalent, and tertiary education spending tends to be progressive only in relative terms (i.e., equalizing but not pro-poor). Health spending is always equalizing but not always pro-poor. More unequal countries devote more resources to redistributive spending and appear to redistribute more. The latter, however, is not a robust result across specifications.
Topic:
International Trade and Finance and Global Political Economy
Political Geography:
Global Focus

26. Classifying Exchange Rate Regimes: 15 Years Later

Author:
Eduardo Levy-Yeyati and Federico Sturzenegger
Publication Date:
06-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Levy Yeyati and Sturzenegger (2001, 2003, 2005) proposed an exchange rate regime classification based on cluster analysis to group countries according to the relative volatility of exchange rates and reserves, thereby shifting the focus from a de jure to de facto approach in the empirical analysis of exchange rate policy. This note extends the classification through 2014 and broadens the country sample, increasing the number of classified country-year observations from 3335 to 5616. Based on this extension, the note documents the main stylized facts in the 2000s, including the behavior of exchange rate policy around the global financial crisis, and the prevalence of floating regimes.
Topic:
Economy, Global Political Economy, Global Financial Crisis, and Exchange Rate Policy
Political Geography:
Global Focus and Global Markets

27. Capital Flight: Measurement and Drivers

Author:
Léonce Ndikumana, James K. Boyce, and Ameth Saloum Ndiaye
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This paper describes the nature of capital flight, the methodologies used to measure it, and its drivers. The paper presents updated estimates of the magnitude of capital flight from 39 African countries for which adequate data are available for the period 1970-2010. It gives a global context of the problem of capital flight from Africa by providing comparative indicators on capital flight and related flows for other developing regions. The paper undertakes a detailed econometric analysis of the drivers of capital flight from African countries. It explores empirically the role of domestic and external factors in driving capital flight, including structural factors, the macroeconomic environment, governance, risk and returns to investment, capital account openness, and financial development. The first objective of the study is to contribute to the literature by providing the most comprehensive analysis of capital flight from Africa that takes into account economic as well as non-economic dimensions, and recognizes the importance of both the domestic and global contexts. The second objective is to contribute to the policy debate on capital flight both in Africa and globally.
Topic:
Economics, International Political Economy, International Affairs, Global Markets, Global Political Economy, and Capital Flight
Political Geography:
Africa and Global Focus

28. In Search of The 21st Century Developmental State

Author:
Peter B. Evans
Publication Date:
12-2008
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
What role for the developmental state in the 21st century? What state structures and political institutions will best equip nations trying to enter the ranks of "developed" countries? I offer two interconnected propositions. The first stresses continuity: the "developmental state" will continue to play a crucial a role in economic growth and social transformation in the 21st century, just as it did in the latter half of the 20th century. The second is more radical: successful 21st century developmental states will have to depart fundamentally from existing models of the developmental state in order to achieve success. Growth strategies focused primarily on traditional capital accumulation will no longer suffice. State-society ties can no longer be focused narrowly on relations with capitalist elites.
Topic:
Development, Economics, Capitalism, International Development, and Global Political Economy
Political Geography:
Global Focus