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You searched for: Content Type Working Paper Remove constraint Content Type: Working Paper Publishing Institution The John F. Kennedy School of Government at Harvard University Remove constraint Publishing Institution: The John F. Kennedy School of Government at Harvard University Publication Year within 5 Years Remove constraint Publication Year: within 5 Years Topic Economy Remove constraint Topic: Economy
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  • Author: Ricardo Hausmann, Patricio Goldstein, Ana Grisanti, Tim O'Brien, Jorge Tapia, Miguel Ajgel Santos
  • Publication Date: 12-2019
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: Jordan faces a number of pressing economic challenges: low growth, high unemployment, rising debt levels, and continued vulnerability to regional shocks. After a decade of fast economic growth, the economy decelerated with the Global Financial Crisis of 2008-09. From then onwards, various external shocks have thrown its economy out of balance and prolonged the slowdown for over a decade now. Conflicts in neighboring countries have led to reduced demand from key export markets and cut off important trade routes. Foreign direct investment, which averaged 12.7% of gross domestic product (GDP) between 2003-2009, fell to 5.1% of GDP over the 2010-2017. Regional conflicts have interrupted the supply of gas from Egypt – forcing Jordan to import oil at a time of record prices, had a negative impact on tourism, and also provoked a massive influx of migrants and refugees. Failure to cope with 50.4% population growth between led to nine consecutive years (2008-2017) of negative growth rates in GDP per capita, resulting in a cumulative loss of 14.0% over the past decade (2009-2018). Debt to GDP ratios, which were at 55% by the end of 2009, have skyrocketed to 94%. Over the previous five years Jordan has undertaken a significant process of fiscal consolidation. The resulting reduction in fiscal impulse is among the largest registered in the aftermath of the Financial Crises, third only to Greece and Jamaica, and above Portugal and Spain. Higher taxes, lower subsidies, and sharp reductions in public investment have in turn furthered the recession. Within a context of lower aggregate demand, more consolidation is needed to bring debt-to-GDP ratios back to normal. The only way to break that vicious cycle and restart inclusive growth is by leveraging on foreign markets, developing new exports and attracting investments aimed at increasing competitiveness and strengthening the external sector. The theory of economic complexity provides a solid base to identify opportunities with high potential for export diversification. It allows to identify the existing set of knowhow, skills and capacities as signaled by the products and services that Jordan is able to make, and to define existing and latent areas of comparative advantage that can be developed by redeploying them. Service sectors have been growing in importance within the Jordanian economy and will surely play an important role in export diversification. In order to account for that, we have developed an adjusted framework that allows to identify the most attractive export sectors including services. Based on that adjusted framework, this report identifies export themes with a high potential to drive growth in Jordan while supporting increasing wage levels and delivering positive spillovers to the non-tradable economy. The general goal is to provide a roadmap with key elements of a strategy for Jordan to return to a high economic growth path that is consistent with its emerging comparative advantages.
  • Topic: Government, International Trade and Finance, Finance, Economy
  • Political Geography: Middle East, Jordan
  • Author: Arvind Subramanian, Josh Felman
  • Publication Date: 12-2019
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: We examine the pattern of growth in the 2010s. Standard explanations cannot account for the long slowdown, followed by a sharp collapse. Our explanation stresses both structural and cyclical factors, with finance as the distinctive, common element. In the immediate aftermath of the Global Financial Crisis (GFC), two key drivers of growth decelerated. Export growth slowed sharply as world trade stagnated, while investment fell victim to a homegrown Balance Sheet crisis, which came in two waves. The first wave—the Twin Balance Sheet crisis, encompassing banks and infrastructure companies—arrived when the infrastructure projects started during India’s investment boom of the mid-2000s began to go sour. The economy nonetheless continued to grow, despite temporary, adverse demonetization and GST shocks, propelled first by income gains from the large fall in international oil prices, then by government spending and a non-bank financial company (NBFC)-led credit boom. This credit boom financed unsustainable real estate inventory accumulation, inflating a bubble that finally burst in 2019. Consequently, consumption too has now sputtered, causing growth to collapse. As a result, India is now facing a Four Balance Sheet challenge—the original two sectors, plus NBFCs and real estate companies—and is trapped in an adverse interest-growth dynamic, in which risk aversion is leading to high interest rates, depressing growth, and generating more risk aversion. Standard remedies are unavailable: monetary policy is stymied by a broken transmission mechanism; large fiscal stimulus will only push up already-high interest rates, worsening the growth dynamic. The traditional structural reform agenda—land and labour market measures—are important for the medium run but will not address the current problems. Addressing the Four Balance Sheet problem decisively will be critical to durably reviving growth. Raising agricultural productivity is also high priority. And even before that, a Data Big Bang is needed to restore trust and enable better policy design.
  • Topic: International Trade and Finance, Economy, Global Political Economy, Economic Growth, Global Financial Crisis
  • Political Geography: South Asia, India
  • Author: Anders Jensen
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: This paper shows how the increase in information trails through the long-run transition from self-employment to employee-jobs explains the rise of the modern income tax system. I construct a new database which covers 100 household surveys across countries at different income levels and 140 years of historical data within the US (1870-2010). Using these data, I first establish four new stylized facts: 1) within country, the share of employees increases over the income distribution, and increases at all levels of income as a country develops; 2) the income tax exemption threshold moves down the income distribution as a country develops, tracking employee growth; 3) the employee share above the exemption threshold is maximized and remains constantly high; 4) decreases in the exemption threshold are strongly associated with increases in tax collection. These findings are consistent with a model where a high employee share is a necessary condition for effective taxation and where the rise in income covered by information trails through increases in employee share drives expansion of the income tax base. To provide a causal estimate of employee share on income tax systems, I study a state-led US development program implemented in the 1950s-60s which increased the level of employee share. The identification strategy exploits within-state changes in court-litigation status which generate quasi-experimental variation in the effective implementation date of the program. I find that the exogenous increase in employee share is associated with an expansion of the state income tax base and an increase in state income tax revenue.
  • Topic: Political Economy, Finance, Economy, International Development, Tax Systems
  • Political Geography: North America, United States of America
  • Author: Abhijit Banerjee, Amy Finkelstein, Rema Hanna, Benjamin A. Olken, Arianna Ornaghi, Sudarno Sumarto
  • Publication Date: 10-2019
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: To assess ways to achieve widespread health insurance coverage with financial solvency in developing countries, we designed a randomized experiment involving almost 6,000 households in Indonesia who are subject to a nationally mandated government health insurance program. We assessed several interventions that simple theory and prior evidence suggest could increase coverage and reduce adverse selection: substantial temporary price subsidies (which had to be activated within a limited time window and lasted for only a year), assisted registration, and information. Both temporary subsidies and assisted registration increased initial enrollment. Temporary subsidies attracted lower-cost enrollees, in part by eliminating the practice observed in the no subsidy group of strategically timing coverage for a few months during health emergencies. As a result, while subsidies were in effect, they increased coverage more than eightfold, at no higher unit cost; even after the subsidies ended, coverage remained twice as high, again at no higher unit cost. However, the most intensive (and effective) intervention – assisted registration and a full one-year subsidy – resulted in only a 30 percent initial enrollment rate, underscoring the challenges to achieving widespread coverage.
  • Topic: Government, Health, Health Care Policy, Economy
  • Political Geography: Indonesia, Southeast Asia
  • Author: Timothy Besley, Anders Jensen, Torsten Persson
  • Publication Date: 09-2019
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: This paper studies individual and social motives in tax evasion. We build a simple dynamic model that incorporates these motives and their interaction. The social motives underpin the role of norms and is the source of the dynamics that we study. Our empirical analysis exploits the adoption in 1990 of a poll tax to fund local government in the UK, which led to widespread evasion. The evidence is consistent with the model’s main predictions on the dynamics of evasion.
  • Topic: Political Economy, Economy, Financial Crimes, Tax Systems
  • Political Geography: United Kingdom, Europe, Global Focus
  • Author: Matt Andrews, Duminda Ariyasinghe, Amara S. Beling, Peter Harrington, Tim McNaught, Fathima Nafla Niyas, Anisha Pooblan, Mahinda Ramanayake, H. Senavirathne, Upatissa Sirigampala, Renuka M. Weerakone, W. A. F. Jayasiri Wijesooriya
  • Publication Date: 10-2017
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: Many countries, like Sri Lanka, are trying to diversify their economies but often lack the capabilities to lead diversification programs. One of these capabilities relates to preparing the investment climate in the country. Many governments tackle this issue by trying to improve their scores on ‘Doing Business Indicators’ which measure performance on general factors affecting business globally (like how long it takes to open a business or pay taxes). Beyond these common indicators, however, investors face context specific challenges when working in countries like Sri Lanka that are not addressed in global indicators. Governments often lack the capabilities to identify and resolve such issues. This paper narrates a recent initiative to establish these capabilities in Sri Lanka. The initiative adopted a Problem Driven Iterative Adaptation (PDIA) process, where a team of Sri Lankan officials worked with Harvard Center for International Development (CID) facilitators to build capabilities over a six-month period. The paper tells the story of this process, providing documented evidence of the progress over time (and describing thinking behind the PDIA process as well). The paper will be of interest to those thinking about the challenges associated with creating a climate that is investor or business friendly and to those interested in processes (like PDIA) focused on building state capability and fostering policy implementation.
  • Topic: Economy, Business , Global Political Economy, State
  • Political Geography: South Asia, Sri Lanka
  • Author: Ricardo Hausmann, Ljubica Nedelkoska
  • Publication Date: 01-2017
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: Over the past few decades, migration from developing to developed countries was often viewed as 'brain drain', as talented workers were forced out of their home countries due to lack of competitive opportunities. The population that left these countries and settled in the more economically advanced parts of the world have, over time, acquired financial capital and built social networks within host countries. Hence, while the home countries were still suffering from the scarcity of knowhow, significant shares of their populations began to actively engage in more productive economies. It seems that, through migration, developing countries had unexpectedly created significant networks of human and financial capital abroad. But are these foreign networks transferring knowhow back to their home countries? It turns out that those same reasons that induced the economic migration in the first place, often make it difficult for migrants to engage afterwards. What would happen, however, if a large proportion of these diasporas was forced to return back to their home country - would that lead to knowhow transfer? Our study investigates the impact of such an abrupt return migration wave between Greece and Albania.
  • Topic: Development, Migration, Labor Issues, Developing World, Economy
  • Political Geography: Europe, Eastern Europe, Greece, Albania
  • Author: Ricardo Hausmann, Jose Ramon Morales, Miguel Angel Santos
  • Publication Date: 10-2016
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: The economy of Panama has thrived for more than a decade, based on a modern service sector on the activities surrounding the Canal. Panama has inserted its economy into global value chains, providing competitive services in logistics, ship handling, financial intermediation, insurance, communication and trade. The expansion of the modern service sector required significant non-residential construction, including office buildings, commercial outlets, warehouses, and even shopping malls. Large public infrastructure projects such as the expansion of the Canal, the Metro, and Tocumen airport, have provided an additional drive and paved the road for productive diversification. But productive diversification does not spread randomly. A country diversifies towards activities that demand similar capacities than the ones already in place. Current capabilities and know-how can be recombined and redeployed into new, adjacent activities, of higher value added. This report identifies productive capabilities already in place in Panama, as signaled by the variety and ubiquity of products and services that is already able to manufacture and provide competitively. Once there, we move on to identifying opportunities for productive diversification based on technological proximity. As a result, we provide a roadmap for potential diversification opportunities both at the national and sub-national level.
  • Topic: Development, Infrastructure, Economy, Economic Growth, Diversification
  • Political Geography: Central America, Panama
  • Author: Stuart Russell, Carla Tokman, Douglas Barrios, Matt Andrews
  • Publication Date: 07-2016
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: As described in Russell, Barrios & Andrews (2016), past attempts to understand the sports economy have been constrained by a number of data limitations. For instance, many of these accounts use revenues when value added measures would be more appropriate. Similarly, many accounts use top-down definitions that result in double counting and an inflated estimate of the size of the sports economy. More importantly, past accounts have focused most of their efforts estimating the overarching size of the sports economy. Constrained by aggregated data that groups a wide range of sports-related economic activities together, they primarily discuss the size of the sports-related economic activity. Their focus on answering the question of "How big?" conceals substantial differences between activities. Core sports activities, such as professional sports teams, behave very differently than activities, like sporting goods manufacturing that are closer to the periphery of the sports economy. Likewise, there are even important differences amongst core sports activities. Professional sports teams are very different than fitness facilities, and they might differ in different respects. Guerra (2016) demonstrates that, when detailed, disaggregated data are available, the possibilities to analyze and understand the sports are greatly increased. For instance, Guerra (2016) were able to conduct skills-based analyses, magnitude analyses, employment characterizations, geographic distribution analyses, and calculations of the intensity of sports activities. The sector disaggregation, spatial disaggregation, and database complementarity present in the Mexico data used in that paper therefore enables a more detailed and nuanced understanding of sports and sports-related economic activity. Data with characteristics similar to those found in Mexico are few and far between. We have, unfortunately, been unable to completely escape such data limitations. However, we have compiled and analyzed a large array of employment data on sports-related economic activities in Europe. In the paper that follows, we describe our analyses of these data and the findings produced. Section 1 begins with a discussion of employment in sports and an explanation of why we chose this variable for our analyses. Section 2 provides an overview of the data used in this paper particularly focusing on the differences between it and the Mexico data discussed in Guerra (2016). It also describes the methodology we use. We analyze these data using one of two related measures to understand the intensity of sports-related activities across different geographic areas in countries. We also construct measures at the level of a single country in order to compare across entire economies. At the international level, we adopt the revealed comparative advantage (RCA) measure that Balassa (1965) first developed to analyze international trade. Within specific countries, however, we use a population-adjusted version of the RCA measure known as RPOP. Section 3 presents the most relevant findings and Section 4 discusses their limitations. Section 5 concludes with the lessons learned and avenues for future research. While there are limitations on these analyses, they can give policymakers a better understanding of the distribution and concentration of sports across space. Such information can serve as an important input for sports-related investment decisions and other sports-related policies.
  • Topic: Employment, Sports, Economy, International Development
  • Political Geography: Europe, Central America, European Union
  • Author: Stuart Russell, Douglas Barrios, Matt Andrews
  • Publication Date: 07-2016
  • Content Type: Working Paper
  • Institution: The John F. Kennedy School of Government at Harvard University
  • Abstract: Data on the sports economy is often difficult to interpret, far from transparent, or simply unavailable. Data fraught with weaknesses causes observers of the sports economy to account for the sector differently, rendering their analyses difficult to compare or causing them to simply disagree. Such disagreement means that claims regarding the economic spillovers of the industry can be easily manipulated or exaggerated. Thoroughly accounting for the industry is therefore an important initial step in assessing the economic importance of sports-related activities. For instance, what do policymakers mean when they discuss sports-related economic activities? What activities are considered part of the "sports economy?" What are the difficulties associated with accounting for these activities? Answering these basic questions allows governments to improve their policies. The paper below assesses existing attempts to understand the sports economy and proposes a more nuanced way to consider the industry. Section 1 provides a brief overview of existing accounts of the sports economy. We first differentiate between three types of assessments: market research accounts conducted by consulting groups, academic accounts written by scholars, and structural accounts initiated primarily by national statistical agencies. We then discuss the European Union’s (EU) recent work to better account for and understand the sports economy. Section 2 describes the challenges constraining existing accounts of the sports economy. We describe two major constraints - measurement challenges and definition challenges - and highlight how the EU's work has attempted to address them. We conclude that, although the Vilnius Definition improves upon previous accounts, it still features areas for improvement. Section 3 therefore proposes a paradigm shift with respect to how we understand the sports economy. Instead of primarily inquiring about the size of the sports economy, the approach recognizes the diversity of sports-related economic activities and of relevant dimensions of analysis. It therefore warns against attempts at aggregation before there are better data and more widely agreed upon definitions of the sports economy. It asks the following questions: How different are sports-related sectors? Are fitness facilities, for instance, comparable to professional sports clubs in terms of their production scheme and type of employment? Should they be understood together or treated separately? We briefly explore difference in sports-related industry classifications using data from the Netherlands, Mexico, and the United States. Finally, in a short conclusion, we discuss how these differences could be more fully explored in the future, especially if improvements are made with respect to data disaggregation and standardization.
  • Topic: Development, Sports, Economy, Economic Policy
  • Political Geography: Europe, European Union