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5801. A lockdown a day keeps the doctor away: The effectiveness of non-pharmaceutical interventions during the Covid-19 pandemic

Author:
Anthonin Levelu and Alexander Sandkamp
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Countries have employed a variety of non-pharmaceutical interventions (NPIs) in order to curtail the COVID-19 pandemic. However, the success of individual measures in reducing the number of infections remains controversial. This paper exploits a panel data set of 107 countries to estimate the effects of 14 NPIs on the spread of the disease. While almost all measures had a dampening effect on the reproduction rate of the virus, public information campaigns and school closings were most effective, followed by testing policies, contact tracing and international travel restrictions. Public event cancellation and school closings were less effective during the second wave of the pandemic, while public information campaigns and the obligation to wear masks worked better. Several NPIs had a stronger impact on infections in autocratic countries, while others were less effective.
Topic:
Health, Economy, Public Policy, Public Health, and COVID-19
Political Geography:
Global Focus

5802. Economic Zones and Local Income Inequality: Evidence from Indonesia

Author:
Cecília Hornok and Sidan Raeskyesa
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Economic zones can be powerful drivers of economic growth in developing countries. However, less is known about their distributional impact on the local society. This paper provides empirical evidence from Indonesian provinces on the relationship between economic zones and within-province income inequality. Estimates from panel regressions and synthetic control case studies suggest that this relationship is positive overall. The estimated rise in income inequality after a zone opens is relatively small on average and may be short-lived. However, the average estimate masks large regional differences, which suggests that the inequality implications of economic zone policies depend on local conditions. One explanation for the rise in inequality is that the unskilled population benefits disproportionately less from the policy. As a remedy, we propose education and training programs that target the poor and unskilled and in which companies also actively participate.
Topic:
Economics, Emerging Markets, Globalization, Economic Growth, and Income Distribution
Political Geography:
Indonesia, Asia, and Southeast Asia

5803. International Managerial Skill and Big Colombian Exporting Firms’ Performance, 2006-2014

Author:
Federico Merchan
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper uses a sample of the biggest private Colombian exporting firms to propose and estimate a two-step methodology for measuring international managerial skill and calculating its impact on firm performance. The first step quantifies the manager’s organizational capital contribution to improvements in Bloom et al.’s (2021) production efficiency (ability to assemble inputs into final goods) and/or quality capacity (skill to make high quality goods) mechanisms, through the median of export unit value regression residuals at firm-year level (multiplying by -1 the price competition products’ residuals). The second step is regression analysis of firm performance. Results indicate that: i) international managerial quality has a significant and robust positive effect on total export value via the intensive margin, ii) exported value elasticity relative to international managerial quality is around 3 times larger than exported value elasticity relative to exogenous global demand shocks, and iii) better managers in the international market do not necessarily upgrade export quality.
Topic:
Economics, Emerging Markets, International Trade and Finance, Exports, Management, and Labor Market
Political Geography:
Colombia and South America

5804. Country, Culture or Competition - What Drives Attitudes Towards Immigrants in Sub-Saharan Africa?

Author:
Malte Becker, Ralf Krüger, and Tobias Heidland
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Sub-Saharan Africa is becoming an increasingly important destination for international migration. The region hosts immigrants from other African countries and from other parts of the world, such as China. Given high poverty levels and weak social security systems in Sub-Saharan Africa, host populations might fear increasing competition for resources and labor, potentially resulting in negative attitudes towards immigrants. We provide the first systematic study of attitudes towards immigrants in Sub-Saharan African countries that uses a causal framework. Using a survey experiment in Uganda and Senegal, we study both attitudes towards immigrants in general and towards specific immigrant groups. In particular, we focus on Chinese immigrants, whose increasing presence in Africa is seen by many as the most important contemporary geopolitical shift involving the continent. We find that attitudes towards immigrants are mainly driven by sociotropic cultural and sociotropic economic concerns. Furthermore, immigrants from China are perceived less positively and economically more threatening than immigrants in general.
Topic:
Development, Migration, Immigration, Sustainability, and Attitudes
Political Geography:
Africa and China

5805. Bilateral trade and conflict heterogeneity

Author:
Katrin Kamin
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Although the number of interstate disputes has fallen in the past 30 years, rising geopolitical competition is challenging the foundation of the absence of great power war. Additionally, the number of internal conflicts is surging. At the same time, globalisation has spun a net of global trade connections and has thus created dependencies, making everyone more vulnerable to the repercussions of conflict. In this context, this paper analyses the relationship between trade and conflict from a trade perspective: Using data from UCDP and COMTRADE this paper studies the effects of five different conflict types on international trade flows in the period 1992 - 2011, including interstate and internal conflicts as well as other types of violence.Applying the gravity equation of international trade and the ppml high-dimensional fixed effects estimator, this paper finds that the heterogeneity of conflict types and their distinct characteristics matter for the magnitude and direction of their influence on trade.
Topic:
Globalization, International Trade and Finance, Conflict, and Trade
Political Geography:
Global Focus

5806. Does ethnic heterogeneity decrease workers’ effort in the presence of income redistribution? An experimental analysis

Author:
Christoph Schütt, David Pipke, Lena Detlefsen, and Gianluca Grimalda
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Ethnic discrimination is ubiquitous, and it has been shown to exert adverse effects on income redistribution. The reason is that a country’s ethnic majority, if richer than the average, may be unwilling to transfer resources to the country’s ethnic minorities if poorer than the average. A yet untested mechanism is that a country’s ethnic majority may reduce their work effort knowing that their income will finance redistribution to ethnic minorities. We test for this mechanism experimentally in triadic interactions. A German citizen acting as a worker is randomly matched with a recipient who can be another German, an economic migrant, or an asylum seeker in Germany. Workers know that another German citizen may transfer part of their earnings to the recipient. The recipient does not exert any work effort. Even if the recipient’s identity does not affect effort in the aggregate, social identity strongly moderates this relationship. Participants with a strong German identity, i.e., who report feeling close to other Germans, exert significantly less effort than other participants if the recipient is an asylum seeker. They also exert more effort when matched with a German recipient than an asylum seeker, while participants with a less strong German identity do the opposite. Moreover, participants with a strong German identity exert slightly more effort when matched with economic migrants than with asylum seekers, while others tend to do the opposite, albeit statistically insignificantly. Workers’ beliefs over the third party’s redistribution rate do not mediate such results and are generally inaccurate.
Topic:
Economics, Discrimination, Tax Systems, Labor Market, Redistribution, and Welfare State
Political Geography:
Global Focus

5807. Carbon dioxide removal in a global analytical climate economy

Author:
Martin Quaas, Felix Meier, Wilfried Rickels, and Christian Traeger
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Net-zero climate policies foresee deployment of atmospheric carbon dioxide removal wit geo-logical, terrestrial, or marine carbon storage. While terrestrial and geological storage would be governed under the framework of national property rights, marine storage implies that carbon is transferred from one global common, the atmosphere, to another global common, the ocean, in particular if storage exceeds beyond coastal applications. This paper investigates the option of carbon dioxide removal (CDR) and storage in different (marine) reservoir types in an analytic climate-economy model, and derives implications for optimal mitigation efforts and CDR deployment. We show that the introduction of CDR lowers net energy input and net emis-sions over the entire time path. Furthermore, CDR affects the Social Cost of Carbon (SCC) via changes in total economic output but leaves the analytic structure of the SCC unchanged. In the first years after CDR becomes available the SCC is lower and in later years it is higher com-pared to a standard climate-economy model. Carbon dioxide emissions are first higher and then lower relative to a world without CDR. The paper provides the basis for the analysis of decentralized and potentially non-cooperative CDR policies.
Topic:
Climate Change, Economy, Carbon Tax, and Carbon Emissions
Political Geography:
Global Focus

5808. Why do Preferences for Redistribution Differ Across Countries?

Author:
Gianluca Grimalda, Francesco Farina, Anna Conte, and Ulrich Schmidt
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We test for different theories purporting to explain cross-country differences in income redistribution through standardized experimental choices. US Americans and Italians demand less redistribution than Norwegians and Germans, regardless of whether self-interest is relevant. Those earning (or expecting to earn) below-median incomes behave as "libertarians" more frequently in the US and Italy than in Germany and Norway. Above-the-median earners behave similarly across countries. Higher overconfidence by US Americans and Italians further reduces their demand for redistribution under uncertainty. The "Prospect of Upward Mobility" hypothesis holds similarly in all countries. US Americans do not reward individual merit more than others.
Topic:
Economic Mobility, Redistribution, Income Distribution, and Behavioral Economics
Political Geography:
Europe, Italy, North America, and United States of America

5809. Regional Deprivation and Populism - Evidence from Germany and the U.S.

Author:
Michael Bayerlein
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
A widely held view is that increasing globalisation and inequality are fostering support for populist actors. Surprisingly, when focusing on Germany and the U.S., populist voting is highest in less globalised regions with rather equal income distributions. Addressing this puzzle, I ask how the regional variance in populist voting can be explained. In my answer, I introduce the concept of spatial inequality, which describes the regional inequality within countries, and construct a measure of public goods scarcity. I argue that the spatial inequality induced feeling of being left behind is positively correlated with populist voting and that this effect is mitigated by public goods provision. Using county level data to develop spatial inequality and public good scarcity indices, I can provide empirical support for these arguments. The findings have important implications for understanding the sub-national variance in populist voting and the role of relative economic deprivation as well as public goods provision.
Topic:
Globalization, Inequality, Populism, Voting, Regional Economy, and Public Goods
Political Geography:
Europe, Germany, North America, and United States of America

5810. Tracking Chinese Aid through China Customs: Darlings and Orphans after the COVID-19 Outbreak

Author:
Andreas Fuchs, Lennart Kaplan, Krisztina Kis-Katos, Sebastian Schmidt, Felix Turbanisch, and Feicheng Wang
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Since the outbreak of the COVID-19 pandemic, China's mask and vaccine diplomacy have been widely discussed, but the debate relies on a few stylized data points. This article introduces a systematic way to measure China's foreign aid in almost real-time through official customs records of exported aid goods. Our results show significant shifts in China's aid after the outbreak of the COVID-19 pandemic. First, medical aid skyrocketed after the outbreak. It was initially dominated by face masks and other protective equipment and later by vaccines. This came at the expense of non-medical aid, which was 16.3 percent below its pre-pandemic level. Second, China's aid became global, clearly extending beyond the Global South. Third, in the aftermath of the initial outbreak in March 2020, China's aid became less responsive to both recipient need and political friendship, which can be mainly attributed to the rise of aid through non-government sources. However, in the vaccine diplomacy period of 2021, economic needs and political factors have regained their original importance.
Topic:
Development, Diplomacy, Public Health, Vaccine, and COVID-19
Political Geography:
China and Asia