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  • Author: Samer Matta, Michael Bleaney, Simon Appleton
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
  • Abstract: An extensive literature has examined the economic effects of non-violent political instability events. Nonetheless, the issue of whether economies react differently over time to such events remains largely unexplored. Using synthetic control methodology, which constructs a counterfactual in the absence of political instability, we estimate the output effect of 38 regime crises in the period 1970-2011. A crucial factor is whether crises are accompanied by mass civil protest. In the crises accompanied by mass civil protest, there is typically an immediate fall in output which is never recovered in the subsequent five years. In crises unaccompanied by protest, there are usually no significant effects. Furthermore, this paper provides new evidence that regime crises (with and without mass civil protest) have heterogeneous (country-specific) effects on output per capita.
  • Topic: Economics, Political Economy, Regime Change, Political stability, Economic Growth, Protests, Economic Policy, Civil Unrest
  • Political Geography: Global Focus
  • Author: Vincent Stamer
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: Global container ship movements may reliably predict global trade flows. Aggregating both movements at sea and port call events produces a wealth of explanatory variables. The machine learning algorithm partial least squares can map these explanatory time series to unilateral imports and exports, as well as bilateral trade flows. Applying out-of-sample and time series methods on monthly trade data of 75 countries, this paper shows that the new shipping indicator outperforms benchmark models for the vast majority of countries. This holds true for predictions for the current and subsequent month even if one limits the analysis to data during the first half of the month. This makes the indicator available at least as early as other leading indicators.
  • Topic: Economics, Science and Technology, Trade, Shipping, Machine Learning
  • Political Geography: Global Focus
  • Author: Chuck Fang, Julian Schumacher, Christoph Trebesch
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: Sovereign debt crises are difficult to solve. This paper studies the “holdout problem”, meaning the risk that creditors refuse to participate in a debt restructuring. We document a large variation in holdout rates, based on a comprehensive new dataset of 23 bond restructurings with external creditors since 1994. We then study the determinants of holdouts and find that the size of creditor losses (haircuts) is among the best predictors at the bond level. In a restructuring, bonds with higher haircuts see higher holdout rates, and the same is true for small bonds and those issued under foreign law. Collective action clauses (CACs) are effective in reducing holdout risks. However, classic CACs, with bond-by-bond voting, are not sufficient to assure high participation rates. Only the strongest form of CACs, with single-limb aggregate voting, minimizes the holdout problem according to our simulations. The results help to inform theory as well as current policy initiatives on reforming sovereign bond markets.
  • Topic: Debt, Economics, International Political Economy, Law, Credit
  • Political Geography: Global Focus
  • Author: Ingrid Ott, Ivan Savin, Chris Konop
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: Taking robotic patents between 1977 and 2017 and building upon the topic modeling technique, we extract their latent topics, analyze how important these topics are over time, and how they are related to each other looking at how often they are recombined in the same patents. This allows us to differentiate between more and less important technological trends in robotics based on their stage of diffusion and position in the space of knowledge, where some topics appear isolated while others are highly interconnected. Furthermore, we propose a novel approach to match the constructed topics to the IFR classification of service robots based on frequency and exclusivity of words overlapping between them. We identify around 20 topics belonging to service robotics. Our results corroborate earlier findings, but also provide novel insights on the content and stage of development of application areas in service robotics. With this study we contribute to a better understanding of the highly dynamic field of robotics and contribute to new practices of utilizing the topic modeling approach.
  • Topic: International Political Economy, Science and Technology, Robotics, Models
  • Political Geography: Global Focus
  • Author: Gemma Dipoppa, Guy Grossman, Stephanie Zonszein
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Empirical Studies of Conflict Project (ESOC)
  • Abstract: Covid-19 caused a significant health and economic crisis, a condition identified as conducive to stigmatization and hateful behavior against minority groups. It is however unclear whether the threat of infection triggers violence in addition to stigmatization, and whether a violent reaction can happen at the onset of an unexpected economic shock before social hierarchies can be disrupted. Using a novel database of hate crimes across Italy, we show that (i) hate crimes against Asians increased substantially at the pandemic onset, and that (ii) the increase was concentrated in cities with higher expected unemployment, but not higher mortality. We then examine individual, local and national mobilization as mechanisms. We find that (iii) local far-right institutions motivate hate crimes, while we find no support for the role of individual prejudice and national discourse. Our study identifies new conditions triggering hateful behavior, advancing our understanding of factors hindering migrant integration.
  • Topic: Political Violence, Minorities, Violence, Far Right, Hate Speech, COVID-19, Racism, Hate Groups
  • Political Geography: United States, Italy, Global Focus
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy (CGEP), Columbia University
  • Abstract: In order to decarbonize the US economy at a reasonable cost and on an accelerated timeline, the country needs to both grow and rapidly decarbonize the power sector. This process will require many new technologies that support an affordable, equitable, and achievable transition. Expanding the clean-electricity focus beyond variable renewable technologies to include other types of zero-carbon power—as well as investing in the transmission and distribution grid that delivers this power to communities around the country—will allow the US to build a reliable, secure, and sustainable zero-carbon power system.
  • Topic: Energy Policy, Renewable Energy, Carbon Emissions
  • Political Geography: Global Focus
  • Author: James Kobus, Ali Narshallah, Jim Guidera
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Center on Global Energy Policy (CGEP), Columbia University
  • Abstract: In recent years, many of the world’s biggest corporations, including Google, Facebook, Microsoft, and Apple, have pledged to power their businesses with increasing amounts of renewable energy in order to reduce their carbon footprints and contribute to efforts to address climate change. Such efforts have had an encouraging impact on US power sector decarbonization, with a material and increasing share of US wind and solar deployments now driven by the procurement preferences of corporate customers. The vast majority of corporate procurement of renewable energy has been secured via power purchase agreements (PPAs). Going forward, a wider universe of companies is expected to look to such PPA agreements as a means of contributing to a low-carbon future, raising the question of how substantial these initiatives might be in supporting the overall transition to zero-carbon electricity. Indeed, a number of positive underlying trends are likely to facilitate continued growth in the corporate renewables PPA market. For example, electricity demand in the technology sector continues to grow rapidly, while renewables PPA penetration in the commercial and industrial sectors more broadly remains low, with room to grow. Additionally, expectations of continued declines in the costs of solar and wind technologies are likely to facilitate more procurement. Lastly, US companies are facing increased pressure from customers, employees, and institutional investors to improve their greenhouse gas emissions profiles. At the same time, certain factors may constrain the size of the PPA market, such as market regulations that limit the feasibility of PPAs in certain regions and the need for renewable PPA prices to be competitive relative to wholesale power prices. Scale and creditworthiness requirements can also limit the universe of potential corporate buyers, and the financial risks brought about when signing long-term contracts may further deter some market participants. Finally, companies increasingly have alternative emission reduction mechanisms at their disposal, such as renewables energy credits (RECs), carbon offsets, and green tariff programs. This student-led paper, from the Power Sector and Renewables Research Initiative at Columbia University’s Center on Global Energy Policy, explores the drivers influencing the renewables PPA market and assesses whether these procurement initiatives by nonutility corporations are likely to continue growing in the United States at a rapid enough pace to support power sector deep decarbonization goals. The analysis finds that while robust private sector participation in recent years has been encouraging, the potential market size going forward may be smaller than previously projected, highlighting the need for comprehensive policy frameworks to support power sector decarbonization.
  • Topic: Energy Policy, Renewable Energy, Wind Power, Solar Power
  • Political Geography: Global Focus
  • Author: Katharina Krings, Jakob Schwab
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: While blockchain technology (BT) has gained a great deal of publicity for its use in cryptocurrencies, another area of BT application has emerged away from the public eye, namely supply chains. Due to the increasing fragmentation and globalisation of supply chains in recent years, many products have to pass through countless production steps worldwide (from raw material extraction to the point of sale). Ensuring the quality and sustainability of production in preceding steps is a major challenge for many firms and thus, ultimately, also for the consumer. BT offers potential for achieving significant progress on this front. Put simply, the blockchain makes it possible to verify data decentralised within a network, store it in a tamper-proof and traceable format and make it accessible to all members of a network.
  • Topic: Development, Science and Technology, Cryptocurrencies, Sustainability, Blockchain
  • Political Geography: Global Focus
  • Author: Daniele Malerba
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: To avoid catastrophic effects on natural and human systems, bold action needs to be taken rapidly to mitigate climate change. Despite this urgency, the currently implemented and planned climate mitigation policies are not sufficient to meet the global targets set in Paris in 2015. One reason for their current inadequate rollout is their perceived negative distributional effects: by increasing the price of goods, climate mitigation policies may increase both poverty and inequality. In addition, they may disrupt labour markets and increase unemployment, especially in sectors and areas dependent on fossil fuels. As a result, public protests in many countries have so far blocked or delayed the implementation of climate policies.
  • Topic: Climate Change, Development, Policy Implementation
  • Political Geography: Global Focus
  • Author: Mario Negre
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: With inequality reduction now being officially and broadly recognised as a key development objective with its own Sustainable Development Goal (SDG 10), there is a need for simple, economical and quick methodologies with which to focus on this area and assess progress. This paper presents such a methodology, which allows a rough assessment of the potential impacts of development cooperation on income, consumption and wealth inequality. This is important, as a rigorous causal analysis of the contribution development cooperation makes to reducing a partner country’s inequality is complex and costly. First, the relative contribution of targeted development cooperation programmes and projects to the economies of partner countries tends to be small (though admittedly not in all cases). Second, a myriad of factors contribute to changes in inequality in any given country, and assessing the impact of all of them is a complex, imprecise, time-consuming and resource-intensive exercise.
  • Topic: Development, International Cooperation, Inequality, Sustainable Development Goals
  • Political Geography: Global Focus
  • Author: Max Otto Baumann
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: There is a case to be made for greater transparency of the United Nations’ (UN) development work at the country level. Transparency can, in the simplest terms, be defined as the quality of being open to public scrutiny. Despite improvements in recent years, UN organisations still only partially meet this standard. Only the UN Development Programme (UNDP) and, with limitations, the World Food Programme (WFP) systematically publish basic project parameters such as project documents, funding data and evaluations. Others do not even publish project lists. Only the UN Children’s Fund (UNICEF) publishes evaluations – a key source on performance – in an easily accessible way next to programme or project information. Lack of project transparency constitutes not only a failure to operate openly in an exemplary way, as should be expected of the UN as a public institution with aspirations to play a leadership role in global development. It also undermines in very practical ways the development purposes that UN organisations were set up for: It reduces their accountability to the stakeholders they serve, including executive boards and local actors; it hampers the coordination of aid activities across and beyond the UN; and it undermines the learning from both successes and failures.
  • Topic: Development, United Nations, Transparency, World Food Program (WFP)
  • Political Geography: Global Focus
  • Author: Mariya Aleksandrova
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: Social protection plays a central role in achieving several of the social and environmental goals of the 2030 Agenda for Sustainable Development. As a result, this policy area is gaining increased recognition at the nexus of global climate change and development debates. Various social protection instruments are deemed to have the potential to increase the coping, adaptive and transformative capacities of vulnerable groups to face the impacts of climate change, facilitate a just transition to a green economy and help achieve environmental protection objectives, build intergenerational resilience and address non-economic climate impacts. Nevertheless, many developing countries that are vulnerable to climate change have underdeveloped social protection systems that are yet to be climate proofed. This can be done by incorporating climate change risks and opportunities into social protection policies, strategies and mechanisms. There is a large financing gap when it comes to increasing social protection coverage, establishing national social protection floors and mainstreaming climate risk into the sector. This necessitates substantial and additional sources of financing. This briefing paper discusses the current and future potential of the core multilateral climate funds established under the United Nations Framework Convention on Climate Change (UNFCCC) in financing social protection in response to climate change. It further emphasises the importance of integrating social protection in countries’ Nationally Determined Contributions (NDCs) to access climate finance and provides recommendations for governments, development cooperation entities and funding institutions.
  • Topic: Climate Change, United Nations, Climate Finance, Sustainable Development Goals, Investment
  • Political Geography: Global Focus
  • Author: Ina Lehmann, César Rodríguez Garavito, Anna Spenceley
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: The COVID-19 pandemic is a global human health crisis that is deeply intertwined with the global biodiversity crisis. It originated when a zoonotic virus spilled over from wild animals to humans. Viruses can spread easily in disturbed ecosystems, and with increasing contact between humans and wildlife the risk of contagion grows. Conservation is crucial to reduce the risks of future pandemics, but the current pandemic also impacts on conservation in many ways. In this Briefing Paper we suggest strategies to alleviate the pandemic’s adverse effects on conservation in the Global South. Many zoonoses originate there, and livelihoods are strongly dependent on natural resources. The paper considers the pandemic’s overarching economic implica-tions for protected and other conserved areas, and specific ramifications for the tourism and wildlife trade sectors, which are closely related to these areas. As economies shrink, natural resources come under pressure from various sides. Financial resources are reallocated from the conservation to the health sector, countries decrease environmental protection standards to boost economic recovery, and poor people in rural regions resort to protected wild resources as a subsistence strategy. Together, these trends speed up the loss of biodiversity and ecosystem services and create supportive conditions for the emergence of zoonotic disease and the undermining of livelihoods.
  • Topic: Environment, Natural Resources, Nature, COVID-19, Health Crisis
  • Political Geography: Global Focus
  • Author: Srinivasa Reddy Srigiri, Ines Dombrowsky
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: Understanding the conditions for coordination in the WEFNexus is key to achieving the 2030Agenda. We provide a framework for analysing nexus governance from a polycentricity perspective, which can be useful in formulating coherent strategies for the integrated implementation of the SDGs.
  • Topic: Energy Policy, United Nations, Water, Food, Governance, Sustainable Development Goals
  • Political Geography: Global Focus
  • Author: Katrin Klöble
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: This paper addresses the self-selection of potential migrants. In particular, the study examines whether risk and time preferences explain a significant proportion in the movement heterogeneity of individuals. It is further intended to shed light on the role of social preferences (trust, altruism, reciprocity) as potential migratory determinants. By making use of a unique cross-sectional data set on migration intentions (Gallup World Poll) and experimentally-validated preferences (the Global Preference Survey) covering 70 countries worldwide, a probit model is estimated. The empirical results provide evidence that potential migrants exhibit higher levels of risk-taking and patience than their counterparts who stay at home (the stayers). This holds true across differing countries with various cultural backgrounds and income levels. Trust and negative reciprocity are found to be significantly related to migration aspirations as well. Yet conclusive clarifications still remain necessary, providing impetuses for future research.
  • Topic: Economics, Migration, Risk, Polls
  • Political Geography: Global Focus
  • Author: Christoph Sommer
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: Long-term finance is not only important for development and growth, but also has the potential to contribute to better jobs. This paper provides empirical evidence to what extent long-term loans affect job quality, firms’ investments in fixed assets and innovation, as well as firm performance.
  • Topic: Finance, Economic Growth, Investment, Capital
  • Political Geography: Global Focus
  • Author: Charlotte Fiedler, Christopher Rohles
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: This paper brings together 39 academic studies on how armed conflict affects social cohesion. Reviewing the literature shows that conflict mostly harms social cohesion. However, this review also points toward several important caveats as well as blind-spots of the current literature.
  • Topic: Academia, Literature Review, Social Cohesion, Armed Conflict
  • Political Geography: Global Focus
  • Author: Pablo Yanguas
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: German Development Institute (DIE)
  • Abstract: Development practitioners learn, their organisations not so much. In this paper, Pablo Yanguas finds little evidence for the “learning hypothesis” that knowledge makes development agencies more effective. As we near 2030, the role of M&E, research, and adaptive approaches may need to be reassessed.
  • Topic: Development, Management
  • Political Geography: Global Focus
  • Author: Valeria Branca
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: The second Infrastructure Working Group workshop under the Italian G20 PPresidency, titled “Financing infrastructure investments for local communities”, was hosted on 4 February 2021 by the Istituto Affari Internazionali (IAI). As the world gradually recovers from the pandemic crisis, most governments are designing strategies to revive long-term growth. A key factor in their success will be the capacity to restart and reorient infrastructure investments. In this context, investments in local infrastructures are particularly important because social needs, work habits and production patterns have been greatly affected by the COVID-19 pandemic, whose impact has been most severe on urban areas, the informal sector and marginalised groups – especially in developing countries. Investments in local infrastructures will therefore be crucial in addressing the need to sustain recovery while tackling long-standing problems posed by climate change and social exclusion.
  • Topic: Infrastructure, Sustainable Development Goals, Investment, Coronavirus, Sustainability, COVID-19
  • Political Geography: Global Focus
  • Author: Katarzyna Kubiak
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: The global treaty-based nuclear order is running out of steam. The problems facing it are progressively building up, while problem-solving is losing momentum. The search for a “golden key” to address disarmament and non-proliferation in a way fit for the 21st century prompts decision-makers to look for novel approaches. NATO needs to actively shape this newly emerging space. Acting today from within a tight policy and institutional “corset”, the Alliance should strengthen its non-proliferation and disarmament portfolio, and harness its consultative and coordination strengths for agenda-setting, norm-shaping and awareness-raising within the international community.
  • Topic: NATO, Arms Control and Proliferation, Nuclear Weapons, Nonproliferation
  • Political Geography: Europe, North America, Global Focus
  • Author: Ryan Lasnick
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: This report analyses the size, scale and persistence of national development banks and offers ten clear observations and conclusions of the role of NDBs for the achievement of sustainable development globally. The Executive Summary can be found here. This report analyzes NDBs top down and bottom up. Top down, it includes the most recent data on the number of NDBs along with their total assets and annual disbursements. Bottom up, we conduct systematic case studies of various development bank ecosystems, including those of India, Brazil, China, South Africa, Germany and the US, to begin analyzing their role in the national development bank economy.
  • Topic: Development, Sustainability, Banking
  • Political Geography: Global Focus
  • Author: Sam Szoke-Burke
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Transparency is often seen as a means of improving governance and accountability of investment, but its potential to do so is hindered by vague definitions and failures to focus on the needs of key local actors. In a new report focusing on agribusiness, forestry, and renewable energy projects (“land investments”), CCSI grounds transparency in the needs of project-affected communities and other local actors. Transparency efforts that seek to inform and empower communities can also help governments, companies, and other actors to more effectively manage operational risk linked to social conflict.
  • Topic: Agriculture, Governance, Transparency, Sustainability, Community
  • Political Geography: Global Focus
  • Author: Stephanie Savell, Rachel McMahon, Emily Rockwell, Yueshan Li
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Watson Institute for International and Public Affairs at Brown University
  • Abstract: The map illustrates countries in which the U.S. government conducted operations it explicitly described as counterterrorism, in an outgrowth of President George W. Bush's “Global War on Terror.” These operations include air and drone strikes, on-the-ground combat, so-called “Section 127e” programs in which U.S. special operations forces plan and control partner force missions, military exercises in preparation for or as part of counterterrorism missions, and operations to train and assist foreign forces. (The map does not comprehensively cover the full scope of U.S. post-9/11 warfare, as it does not document, for instance, U.S. military bases used for counterterror operations, arms sales to foreign governments, or all deployments of U.S. special operations forces.) Despite the Pentagon’s assertion that the U.S. is shifting its strategic emphasis away from counterterrorism and towards great power competition with Russia and China, examining U.S. military activity on a country-by-country basis shows that there is yet to be a corresponding drawdown of the counterterror apparatus. If anything, the map demonstrates that counterterrorism operations have become more widespread in recent years.
  • Topic: Military Affairs, Counter-terrorism, Conflict
  • Political Geography: Global Focus, United States of America
  • Author: Thomas Brand, Fabien Tripier
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: Highly synchronized during the Great Recession of 2008-2009, the Euro area and the US have diverged in the period that followed. To explain this divergence, we provide a structural interpretation of these episodes through the estimation for both economies of a business cycle model with financial frictions and risk shocks, measured as the volatility of idiosyncratic uncertainty in the financial sector. Our results show that risk shocks have stimulated US growth in the aftermath of the Great Recession and have been the main driver of the double-dip recession in the Euro area. They play a positive role in the Euro area only after 2015. Risk shocks therefore seem well suited to account for the consequences of the sovereign debt crisis in Europe and the subsequent positive effects of unconventional monetary policies, notably the ECB’s Asset Purchase Programme (APP).
  • Topic: Debt, Economics, International Political Economy, Global Recession, Finance, Europe Union, Economic Growth, Risk
  • Political Geography: United States, Europe, Global Focus
  • Author: Pierre Cotterlaz, Etienne Fize
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: This paper documents the effect of information frictions on trade using a historical large-scale improvement in the transmission of news: the emergence of global news agencies. The information available to potential traders became more abundant, was delivered faster and at a cheaper price between countries covered by a news agency. Exploiting differences in the timing of telegraph openings and news agency coverage across pairs of countries, we are able to disentangle the pure effect of information from the effect of a reduction in communication costs. Panel gravity estimates reveal that bilateral trade increased by 30\% more for pairs of countries covered by a news agency and connected by a telegraph than for pairs of countries simply connected by a telegraph.
  • Topic: Economics, International Political Economy, Partnerships, Media, News Analysis, Trade
  • Political Geography: Global Focus
  • Author: Vincent Bodart, François Courtoy, Erica Perego
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: With commodities becoming international financial securities, commodity prices are affected by the international financial cycle. With this evidence in mind, this paper reconsiders the macroeconomic adjustment of developing commodity-exporting countries to changes in world interest rates. We proceed by building a model of a small open economy that produces a non-tradable good and a storable tradable commodity. The difference with standard models of small open economies lies in the endogenous response of commodity prices which -due to commodity storage- adjust to variations in international interest rates. We find that the endogenous response of commodity prices amplifies the reaction of commodity exporting countries to international monetary shocks. This suggests that commodity exporting countries are more vulnerable to unfavourable international monetary disturbances than other small open economies. In particular, because of the existence of the commodity price channel, even those small open commodity-exporting economies that are disconnected from international financial markets can be affected by the international financial cycle.
  • Topic: Economics, International Political Economy, Monetary Policy, Finance, Commodities, Interest Rates, Exports, Price
  • Political Geography: Global Focus
  • Author: Pierre Siklos
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: As digital forms of payment become increasingly popular, especially during the COVID-19 pandemic, cash is no longer king. Central banks are turning their attention toward central bank digital currency (CBDC) to replace coins and bills and to provide other types of services through digital technology. CBDC can also facilitate cross-border transactions through the use of internationally accepted currencies such as the euro and the US dollar. This paper explores the many tailwinds and headwinds that will affect the implementation of a CBDC.
  • Topic: Governance, Digital Economy, Banks, Digital Currency
  • Political Geography: North America, Global Focus, United States of America
  • Author: Dan Ciuriak, Maria Ptashkina
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Trade secret theft is estimated to cost hundreds of billions of dollars annually. As a result, governments worldwide are developing legislation to mitigate these losses. This paper looks at the growing importance of trade secrets globally, corporations’ responsibilities to protect their trade secrets and how trade secret theft occurs (for example, through cybertheft or personnel movement between companies). The authors argue that protecting intellectual property rights must not come at the expense of the innovation-intensive economy.
  • Topic: Security, Intellectual Property/Copyright, Trade, Trade Policy
  • Political Geography: Global Focus
  • Author: Hedvig Ördén, James Pamment
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: Influence operations are increasingly seen as a threat to democratic societies because they can corrupt the integrity of political deliberation. As individuals engage in debate on social media, political deliberation becomes vulnerable to potentially destructive forms of interference. Many debates on what to do about influence operations emphasize that these operations constitute what is deemed to be a foreign threat. But does the notion of foreignness, viewed in isolation, constitute a helpful lens for distinguishing between legitimate and illegitimate influence operations? Ultimately, the lens of foreignness is only helpful when applied to a narrow set of cases. One sensible way of reviewing when the concept of foreignness can be useful in distinguishing between legitimate and illegitimate influence operations is to consider three separate conceptions of how to determine what counts as foreign: foreign states, foreign citizens, and foreign interests. In the first case, influence operations are seen as threatening acts directed at a targeted state by foreign states, using behaviors seen as analogous to acts of war. In the second instance, influence operations are considered threatening acts conducted by foreign citizens that undermine domestic democratic systems in a targeted state. In cases of the third sort, influence operations are viewed as acts aimed at advancing foreign interests through the illegitimate employment of soft power. Given these various models, the notion of foreignness constitutes a useful lens for discussions of influence operations in cases when there is overwhelming evidence of state-based, hybrid, and irregular warfare. An argument can also be made for employing the distinction in relation to the protection of democratic institutions, such as elections. However, when influence operations are regarded as a more generalized threat to political deliberation, foreignness is not a helpful category for determining the legitimacy or illegitimacy of such campaigns. In such cases, rather than focusing on the (domestic or foreign) identity of the malicious actors themselves, it is more fruitful to conceive of illegitimacy in terms of specific manipulative communication techniques. Suitable countermeasures could include, for instance, creating greater transparency surrounding, or even restricting, the use of artificial techniques to inflate the level of perceived engagement a piece of online content generates.
  • Topic: Democracy, Soft Power, Foreign Interference
  • Political Geography: Global Focus
  • Author: Rachel Kleinfeld, Thomas Carothers, Steven Feldstein, Richard Youngs
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: Middle-power democracies—countries which regardless of their geopolitical weight have made democracy support a sustained component of their foreign policy—will be crucial to reimagining democracy support strategies and policies to better meet the moment. Some of these states have crafted new initiatives and wielded diplomatic tools to deepen their impact in recent years. However, these states have on the whole punched below their collective weight. This paper suggests that middle-power democracies can maximize their impact on global democracy in the following ways: Enhancing solidarity: when a country acts courageously in defense of democracy, it needs to know that others will stand alongside it. Sharpening their focus: middle-power democracies should target policy areas aligned with democratic values on issues both at the top of the geopolitical agenda and at the top-of-mind for citizens around the world—for example, economic recovery, injustice and discrimination, corruption, digital repression, and climate change. Improving diplomatic cooperation: pursuing flexible and focused multilateral partnerships allows for collaboration on key policy interests and amplifies middle-power actions.
  • Topic: Foreign Policy, Diplomacy, Democracy, Solidarity, COVID-19
  • Political Geography: Global Focus, United States of America
  • Author: Andrew Shaver
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Empirical Studies of Conflict Project (ESOC)
  • Abstract: Conflict forces millions of individuals from their homes each year. Using a simple structural model and new refugee data, we produce the first set of estimates relating outflows to annual conflict magnitudes. The theory underlying the structural model implies that standard panel data approaches will underestimate the impact of conflict violence, by differencing out the effect of prior and expected levels of violence on the decisions to flee. We estimate that whereas a shock that doubles conflict deaths in one year increases outflows in that year by 40% on average, doubling conflict deaths in all years increases annual outflows by 100%. We further estimate an average of 30 refugees per conflict death (median 18), with higher rates for conflicts closer to an OECD country and possibly for ethnic wars and in lower income countries. The analysis illustrates a broader methodological point: It can be hazardous to try to identify a causal effect using shocks to a presumed causal factor if the outcome variable is the result of decisions based not only on shocks but also on levels.
  • Topic: Political Violence, Civil War, Refugee Issues, Refugees, Refugee Crisis, Data, Armed Conflict , Models
  • Political Geography: Global Focus
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Liechtenstein Institute on Self-Determination, Princeton University
  • Abstract: The Handbook on the Prevention and Resolution of Self-Determination Conflicts is the latest product of a long and fruitful collaboration between the Mission of Liechtenstein to the United Nations, New York, and the Liechtenstein Institute on Self-Determination at Princeton University to assess the relationship of self-determination to conflict. The Handbook includes four case studies: Aceh, Bougainville, Mindanao, and Northern Ireland, in addition to setting out guidelines specifically aimed at those working to prevent and resolve self-determination conflicts. The handbook was conceived chiefly as the result of two meetings on self-determination held jointly by the Liechtenstein Institute on Self-Determination and the Liechtenstein Mission to the UN: “Models of Self-Governance as Tools to Promote Peace and Stability in Europe,” held in March 2016, in Triesenberg, Liechtenstein, and “Self-Determination in Conflict Prevention and Resolution,” held in December 2018, in Princeton, New Jersey, U.S.A. In these meetings, participants discussed the relationship between self-determination and conflict, as well as ways that self-determination conflicts may be prevented and resolved. These discussions drew on the tensions and links between self-determination, minority rights, autonomy and self-governance, and mediation, all of which are key elements of the handbook.
  • Topic: Conflict Prevention, Diplomacy, Governance, Self Determination, Conflict
  • Political Geography: Global Focus
  • Author: Joseph E. Gagnon, Madi Sarsenbayev
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: A 2017 PIIE analysis found that fiscal balances and foreign exchange intervention—more broadly, government purchases of foreign assets to influence exchange rates—are the most important factors behind differences in current account balances across countries and over time. The current account is the broadest measure of a country's balance of trade. It records all income received from foreigners and payments made to foreigners. It is dominated by trade in goods and services but also includes income receipts on domestically owned factors of production (capital and labor) that are employed abroad and payments to foreign-owned factors of production at home. A country’s fiscal surplus and official purchases of foreign assets tend to increase its current account balance. Net official purchases by other countries tend to reduce current account balances in the home country, especially when it issues a reserve currency. This paper updates the earlier analysis with three more years (2016–18) and roughly 40 percent more observations. New analysis of net international investment positions (which largely reflect cumulated current account balances) finds even stronger evidence for the dominant role of official reserve positions in explaining differences in current account balances across countries. An increase in a country’s official reserve position causes essentially a dollar-for-dollar increase in its net international investment position.
  • Topic: Fiscal Policy, Currency, Trade Policy, Trade Deficit
  • Political Geography: Global Focus
  • Author: Jimena Leiva Roesch
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: International Peace Institute
  • Abstract: As the COVID-19 pandemic has increased reliance on digital technologies, it has highlighted the growing digital divide between and within societies. Universal access to the digital world has become more urgent than ever, and failure to achieve it could undermine progress toward the Sustainable Development Goals. While closing the digital divide and increasing connectivity are among the UN secretary-general’s priorities for 2021, this goal remains elusive and faces many obstacles. One challenge is the lack of a shared understanding of what universal connectivity means. It is not just a technical challenge; it also requires addressing questions related to adoption, usage, accessibility, and the relevance and veracity of content. Another challenge is that funding for digital connectivity is uncoordinated and not easily accessible by those who need it most. There is also a lack of concerted leadership and coherent governance structures at all levels. Moreover, getting the framing right is key. National, global, and local leaders need to establish clear and compelling links between universal connectivity and the 2030 Agenda with its message to “leave no one behind.” Addressing these challenges requires a human-centered, human rights–based approach. Connectivity comes with risks, including privacy issues, misinformation and hate speech, and online violence and sexual harassment. While discussions on universal connectivity have gained momentum, these human rights considerations often remain an afterthought. Governments, businesses, and civil society need to understand connectivity as a right whose protection is their shared responsibility. Ultimately, bridging the digital divide requires a stronger and more inclusive multilateral system. Geopolitics, a lack of shared understanding, knowledge gaps, and suspicion between actors continue to hold back digital cooperation at the UN. Governments need to meaningfully include private sector and civil society actors in formal decision-making processes. In parallel, the UN should create informal platforms to build trust among stakeholders. To achieve meaningful and sustainable progress toward digital inclusion, all actors need to commit to working through a multi-stakeholder platform.
  • Topic: Human Rights, Science and Technology, Sustainable Development Goals, COVID-19
  • Political Geography: Global Focus
  • Author: Hubert Gabrisch
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: The Vienna Institute for International Economic Studies (WIIW)
  • Abstract: This study attempts to identify uncertainty in the long-term rate of interest based on the controversial interest rate theories of Keynes and Kalecki. While Keynes stated that the future of the rate of interest is uncertain because it is numerically incalculable, Kalecki was convinced that it could be predicted. The theories are empirically tested using a reduced-form GARCH-in-mean model assigned to six globally leading financial markets. The obtained results support Keynes’s theory – the long-term rate of interest is a nonergodic financial phenomenon. Analyses of the relation between the interest rate and macroeconomic variables without interest uncertainty are thus seriously incomplete.
  • Topic: Economics, International Political Economy, Economic Theory, Interest Rates, Macroeconomics, Keynes, Models, Michał Kalecki
  • Political Geography: Global Focus
  • Author: Petar Jolakoski, Branimir Jovanovic, Joana Madjoska, Viktor Stojkoski, Dragan Tevdovski
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: The Vienna Institute for International Economic Studies (WIIW)
  • Abstract: If firm profits rise to a level far above than what would have been earned in a competitive economy, this might give the firms market power, which might in turn influence the activity of the government. In this paper, we perform a detailed empirical study on the potential effects of firm profits and markups on government size and effectiveness. Using data on 30 European countries for a period of 17 years and an instrumental variables approach, we find that there exists a robust relationship between firm gains and the activity of the state, in the sense that higher firm profits reduce government size and effectiveness. Even in a group of developed countries, such as the European countries, firm power may affect state activity.
  • Topic: Development, Economics, Government, International Political Economy, Profit
  • Political Geography: Europe, Global Focus
  • Author: David Pichler, Robert Stehrer
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: The Vienna Institute for International Economic Studies (WIIW)
  • Abstract: This paper analyses the impact of ICT-skills on individuals’ labour market mobility patterns, in particular job-to-job, employment- to-unemployment and unemployment-to-employment transitions. Based on the OECD’s Programme for the International Assessment of Adult Competencies (PIAAC) and longitudinal EU-SILC data, individuals’ labour market outcomes are examined over the period 2011-2017 in nine EU countries and the UK. Our results indicate that individuals with strong ICT skills have better opportunities and are therefore not only more likely to change jobs more frequently but are also less likely to face unemployment. Furthermore, ICT skills support unemployment exit towards medium and high digital occupations. A certain minimum level of ICT skills also supports unemployment exit towards low digital occupations but seems to make employment in such occupations less likely once this threshold is crossed. Overall, ICT skills have less predictive power for transition towards medium digital occupations. Thus, while ICT skills appear to improve labour market opportunities significantly, it seems that there are still jobs that require relatively few ICT skills.
  • Topic: Economics, International Political Economy, Science and Technology, Digital Economy, Labor Market, Information Technology , Skilled Labor
  • Political Geography: Global Focus
  • Author: Mahdi Ghodsi
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: The Vienna Institute for International Economic Studies (WIIW)
  • Abstract: Regulative non-tariff measures (NTMs), such as technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures, have frequently been imposed to regulate the quality of imported goods when the market fails to address some issues of concern regarding harmful products with low standards. The impact of NTMs on trade values and trade volumes has been extensively modelled and analysed in the literature, while their quality impact has usually been studied using the unit values of imports. In this paper a monopolistic competition framework is presented, in which firms choose both the quality and the price of their exports subject to the compliance costs of NTMs behind the border and a fixed cost of technological change. Using the solutions of this model including NTMs, the quality of products at the six-digit level of the harmonised system (HS) traded globally and bilaterally during the period 1996–2017 is estimated. Using these estimates, the impacts of TBTs and SPS measures on trade values, volume, unit value and quality are estimated. On average and across all global bilateral trade, TBTs restrict imports while improving quality significantly. SPS measures stimulate trade and improve the average imported quality. Then, by estimating the importer-specific impact of NTMs on traded value, quantity, unit value, quality, and quality-adjusted price for each product, the ‘NTM Black Box’ is opened and analysed. This provides evidence of whether the quality of traded goods to an importing country has been upgraded despite the trade restrictiveness of NTMs.
  • Topic: Economics, International Political Economy, International Trade and Finance, Non-Tariff Measures
  • Political Geography: Global Focus
  • Author: Maryna Tverdostup
  • Publication Date: 06-2021
  • Content Type: Working Paper
  • Institution: The Vienna Institute for International Economic Studies (WIIW)
  • Abstract: The COVID-19 pandemic has highly asymmetric effects on labour market outcomes of men and women. In this paper, we empirically investigate the dynamics and drivers of gender gaps in employment rates, wages and workhours during the pandemic. Relying on Estonian Labour Force Survey data, we document that the pandemic has, if anything, reduced gender inequality in all three domains. Our results suggest that, while the evolution of inequalities mirrored the infection rate development – rising as infections mounted and declining as the first wave flattened – overall, the pandemic did not exacerbate gender gaps in 2020. The cyclical increases in gender disparities were largely driven by parenthood, as child-rearing women experienced a major decline in their employment rate and workhours, as well as gender segregation in the most affected industries. The higher propensity to work from home and better educational attainments of women deterred gender wage gap expansion, as wage returns to telework and education rose during the pandemic. Our results suggest no systematic expansion of gender gaps, but rather short-term fluctuations. However, labour market penalties for women with young children and women employed in those industries most affected by COVID-19 may last longer than the pandemic, threatening to widen gender inequality in the long run.
  • Topic: Gender Issues, Labor Issues, Employment, Pandemic, COVID-19
  • Political Geography: Global Focus
  • Author: Thanos Athanasopoulos, Burak Dindaroglu, Georgios Petropoulos
  • Publication Date: 06-2021
  • Content Type: Working Paper
  • Institution: Bruegel
  • Abstract: How do incentives to collude depend on how asymmetric firms are? For low levels of differentiation, an increase in quality difference makes collusion less stable. The opposite holds for high levels of differentiation.
  • Topic: Political stability, Business , Economic Growth
  • Political Geography: Global Focus
  • Author: Geoffrey Parker, Georgios Petropoulos, Marshall Van Alstyne
  • Publication Date: 06-2021
  • Content Type: Working Paper
  • Institution: Bruegel
  • Abstract: Platform ecosystems rely on economies of scale, data-driven economies of scope, high quality algorithmic systems, and strong network effects that frequently promote winner-takes-most markets. Some platform firms have grown rapidly and their merger and acquisition strategies have been very important factors in their growth. Big platforms’ market dominance has generated competition concerns that are difficult to assess with current merger policy tools. We examine the acquisition strategies of the five major US firms—Google, Amazon, Facebook, Apple and Microsoft—since their inception. We discuss the main merger and acquisition theories of harm that can restrict market competition and reduce consumer welfare. To address competition concerns about acquisitions in big platform ecosystems we develop a four step proposal that incorporates: (1) a new ex-ante regulatory framework, (2) an update of the conditions under which the notification of mergers should be compulsory and the burden of proof should be reversed, (3) differential regulatory priorities in investigating horizontal versus vertical acquisitions, and (4) an update of competition enforcement tools to increase visibility into market data and trends.
  • Topic: Markets, Digital Economy, Internet, Economy, Innovation
  • Political Geography: Global Focus, United States of America
  • Author: Martin Hellwig, Viola Priesemann, 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, COVID-19
  • Political Geography: Global Focus
  • Author: Reinhilde De Veugelers
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: Bruegel
  • Abstract: We review the evidence on the impact of public intervention on private research and innovation, and how research and innovation and R&I policies affect growth in the applied macro models most commonly used in European Union policy analysis. The evidence suggests that R&I grants and R&I tax credits can have positive effects in terms of stimulating investment in innovation. In terms of the impact of public R&I interventions on economy-wide GDP growth and jobs, the available applied macro models predict positive effects over the long term. It therefore takes time before short-term negative effects associated with reallocations of high-skilled labour from other productive activities to generate the extra innovations, and the negative effects from displacing older, more labour-intensive production processes, are compensated for. To the question of whether R&I policies can serve to power growth, the answer can only be a timid yes at this stage. R&I policies certainly have the potential, but still too little is known of what drives their actual effects. More micro and macro evaluations are still needed.
  • Topic: Economy, Research, Innovation, Strategic Competition
  • Political Geography: Global Focus
  • Author: Geoffrey Parker, Georgios Petropoulos, Marshall Van Alstyne
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Bruegel
  • Abstract: Platform ecosystems rely on economies of scale, data-driven economies of scope, high-quality algorithmic systems and strong network effects that typically promote winner-take-most markets. Some platform firms have grown rapidly and their merger and acquisition strategies have been very important factors in their growth. Market dominance by big platforms has led to competition concerns that are difficult to assess with current merger policy tools. In this paper, we examine the acquisition strategies since their inception of the five major US firms – Google, Amazon, Facebook, Apple and Microsoft. We discuss the main merger and acquisition theories of harm that can restrict market competition and reduce consumer welfare. To address competition concerns arising from acquisitions in big platform ecosystems this paper sets out a four-step proposal that incorporates: (1) a new ex-ante regulatory framework, (2) an updating of the conditions under which the notification of mergers should be compulsory and the burden of proof should be reversed, (3) differential regulatory priorities in investigating horizontal versus vertical acquisitions, and (4) an updating of competition enforcement tools to increase visibility of market data and trends.
  • Topic: Markets, Regulation, Digital Economy, Economy, Business , Innovation
  • Political Geography: Global Focus
  • Author: Marie Ladekjær Gravesen, Mikkel Funder
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Danish Institute for International Studies
  • Abstract: Nature-based Solutions (NbS) to climate- and development-related challenges have recently gained attention in development cooperation. Among other, approaches that fall under the NbS umbrella include Ecosystem-based Adaptation (EbA), Ecosystem-based Mitigation (EbM) and Ecosystem-based Disaster Risk Reduction (Eco-DRR). This new DIIS Working Paper focuses on nature-based solutions to climate change adaptation, EbA. It provides an overview of selected lessons learnt from EbA in the context of development cooperation, with a particular emphasis on the opportunities and risks regarding poverty alleviation and rights. It generates learning for Danish development cooperation, including future programming under Denmark’s 2021 development strategy, in which NbS approaches are emphasised. However, the paper can also be read as a general discussion of experiences with EbA in the development context. The three-legged EbA approach focuses on human well-being, ecosystem management, and climate change adaptation. EbA has already been applied to a range of ecosystems, including the restoration of mangroves to shield them against storm and sea-level rises, the management of watersheds to protect against droughts and flooding, the management of rangelands to inhibit desertification and land degradation, and more sustainably managed fisheries and forestry to tackle food insecurity. EbA thus not only addresses the restoration of already degraded ecosystems, but also the sustainable use, management, and conservation of intact ecosystems. The paper provides a conceptual overview of EbA in relation to NbS, outlines the potential in using EbA approaches, and describes the landscape of the institutions and agencies that fund, promote and implement EbA. The paper then provides a synthesis of lessons learned from PES and REDD+ schemes that are of relevance to EbA. For instance, it is emphasised that many REDD+ measures have effectively existed as project islands that were not anchored in national or subnational planning and governance mechanisms. As a result, the conservation activities and socioeconomic benefits were often not effectively integrated or scaled up beyond small project sites. If comprehensively implemented, the EbA approach builds on these experiences by insuring full inclusion of stakeholders from all relevant sectors, as well as demanding full integration in existing policies, planning and governance practices from the ministry levels to sub-national governments. Among the final recommendations and possible entry points for Danish development cooperation, the paper highlights that the support must have a strong focus on ensuring that EbA is pro-poor (i.e. supports poverty alleviation) and rights-based (i.e. supports the rights of local resource users). Experience from EbA and related efforts show that EbA is not automatically pro-poor or supportive of local rights to natural resources and ecosystem services. In particular, there is insufficient attention to and knowledge of rights issues in EbA. Therefore, Danish development cooperation should help lead the way in ensuring that EbA takes a rights-based approach and supports poverty alleviation.
  • Topic: Agriculture, Climate Change, Development, Environment, Poverty, Natural Resources, Water, Food, Governance, Inequality, Investment, Land Rights
  • Political Geography: Global Focus
  • Author: Gary King, Melissa Sands
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Weatherhead Center for International Affairs, Harvard University
  • Abstract: Universities require faculty and students planning research involving human subjects to pass formal certification tests and then submit research plans for prior approval. Those who diligently take the tests may better understand certain important legal requirements but, at the same time, are often misled into thinking they can apply these rules to their own work which, in fact, they are not permitted to do. They will also be missing many other legal requirements not mentioned in their training but which govern their behaviors. Finally, the training leaves them likely to completely misunderstand the essentially political situation they find themselves in. The resulting risks to their universities, collaborators, and careers may be catastrophic, in addition to contributing to the more common ordinary frustrations of researchers with the system. To avoid these problems, faculty and students conducting research about and for the public need to understand that they are public figures, to whom different rules apply, ones that political scientists have long studied. University administrators (and faculty in their part­time roles as administrators) need to reorient their perspectives as well. University research compliance bureaucracies have grown, in well­meaning but sometimes unproductive ways that are not required by federal laws or guidelines. We offer advice to faculty and students for how to deal with the system as it exists now, and suggestions for changes in university research compliance bureaucracies, that should benefit faculty, students, staff, university budgets, and our research subjects.
  • Topic: Education, Science and Technology, Labor Issues, Bureaucracy, Academia
  • Political Geography: Global Focus
  • Author: Andrew Shaver, Leonardo Dantas, Amarpreet Kaur, Robert Kraemer, Tristan Jahn, Grady Thomson, Hank Cheng, Katherine Gan, Jazmin Santos-Perez
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Empirical Studies of Conflict Project (ESOC)
  • Abstract: We consider how the U.S. news media reports on international affairs. Analyzing ≈40 million news articles published between 2010 and 2020, we explore whether the American news media report differently on various international affairs topics based on partisan leanings. We then analyze ≈25 million articles published by top online news sites to determine whether collective reporting shows disparities between the level of attention afforded major global issues and objective measures of their human costs (e.g. numbers of individuals killed). We find that left- and right-leaning news outlets tend to report on international affairs at similar rates but differ significantly in their likelihood of referencing particular issues. We find further strong evidence that the frequency of reporting on the international issues we study tracks only modestly with their associated human costs. Given evidence U.S. public and policymakers dependence on news reports for foreign affairs information, our findings raise fundamental questions about the influence of these reporting biases.
  • Topic: International Relations, Communications, Media, Internet
  • Political Geography: United States, Global Focus
  • Author: Selma Talha-Jebril, Mirka Martel
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Institute of International Education
  • Abstract: International Higher Education Scholarships and Fellowships for Social Justice: The Role of Foundations explores philanthropy's role in funding international scholarship and fellowship programs committed to reducing long-standing disparities in higher education. The research paper addresses a gap in the literature regarding U.S. and non-U.S. foundations that have funded international scholarship and fellowship programs that focus on social justice, namely equity and access. The research paper is framed by the Ford Foundation International Fellowships Program (IFP) and the IFP Alumni Tracking Study, administered by the Institute of International Education (IIE). It brings in the perspectives of IFP and other scholarship and fellowship programs for social justice. The findings indicate four elements that contributed to growing interest in funding international higher education programs: (1) The push from multilateral agencies such as the U.N. and World Bank; (2) The rise of personal wealth during the past two decades; (3) The growing global youth population and access to higher education; and (4) The increasing liberal government policies encourage non-state actors to contribute and play a more significant role in the field of higher education. The research paper reveals that higher education scholarship and fellowship programs with common agendas – whether between donors and academic institutions or between government and international partners – often lead to sustainable partnerships and better program outcomes because they are supported by more than one entity and are grounded in common goals and visions.
  • Topic: Social Justice, Higher Education, Philanthropy , Scholarships, Fellowships
  • Political Geography: Global Focus
  • Author: Pascal Blickle, Angela Min Yi Hou, Laura Störi
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
  • Abstract: This TradeLab project analyses the domestic legislation of 14 developing countries in implementing the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The present memo summarises the main findings across the 14 Parties. This memo finds that most assessed Parties have implemented the CITES' core requirements, and recommendations provided in the resolutions of the Conference of the Parties (CoP). The project identifies a minority of three African countries for which the CITES Secretariat may wish to review their Category 1 status. These Parties fall short of all or several of the following elements: they failed to appropriately designate Management and Scientific Authorities by law, circumscribe the Authorities' tasks and responsibilities, or – by exclusively regulating native species – appear not to comprehensively cover species listed in the Convention's three Appendices.
  • Topic: Environment, International Trade and Finance, Science and Technology, Trade, Ecology, Biology
  • Political Geography: Africa, Global Focus
  • Author: Anna Liz Thomas, Jarrod Suda, Gaia Grasselli
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
  • Abstract: Since the 1990s, more free trade agreements have come to include social clauses, which make reference to domestic and international labour standards. As this international legal web continues to grow, so too will the questions and concerns from employers and businesses. This Tradelab report, for the International Organisation of Employers, provides practical guidance for those employers and businesses. It does so by taking the diverse array of actors, the tensions within, and the opportunities set forth by free trade agreements and elaborating upon them using three case studies.
  • Topic: International Political Economy, International Trade and Finance, Treaties and Agreements, Labor Issues, Free Trade, Trade, International Business, Labor Market
  • Political Geography: Global Focus
  • Author: Simon Happersberger, Eleanor Mateo, Selcukhan Ünekbas
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
  • Abstract: Fossil fuel subsidies have negative consequences on the climate change, public budgets and and the transition to an environmentally friendly economy. Nevertheless, governments do not keep up with their commitments to phase out fossil fuel subsidies but misallocate again COVID-19 recovery funds in fossil fuel subsidies. This article provides an analysis of the current obstacles for phasing out fossil fuel subsidies and the potential of the WTO to advance a reform on fossil fuel subsidies. It argues that the WTO can contribute to a fossil fuel subsidies reform by its technical expertise in regulating subsidies, by its broad membership and by its institutional setting. Under the current framework of the ASCM, WTO member can use existing mechanisms, such as the TPRM, to increase transparency in the short term and facilitate discussions on the scope of subsidies while mitigating impacts on vulnerable groups or sectors. This would provide the ground for governments to work towards a new and ambitious agreement to stop producer fossil fuels subsidies and phase out consumer fossil fuels subsidies in the mid-to-long-term. However, the phase out of consumer subsidies needs to be carefully designed and embedded, to avoid unintended consequences on energy access and vulnerable households.
  • Topic: Climate Change, Environment, International Trade and Finance, Natural Resources, Trade, Fossil Fuels, COVID-19, WTO, Ecology
  • Political Geography: Global Focus
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: International Foundation for Electoral Systems
  • Abstract: Environmental disasters such as fires, droughts, floods, hurricanes and rising sea levels displace more and more people each year. According to the University of Oxford, the scale of displacement related to climate change is difficult to forecast but has been “estimated at between 50 and 200 million people by 2050, mostly in developing countries.” Climate change, other environmental crises and migration resulting from environmental displacement increase the likelihood of insecurity and conflict – and put democratic rights at risk. A new paper from the International Foundation for Electoral Systems, Electoral Rights of Environmentally Displaced Persons, examines these questions and provides recommendations for election management bodies, governments, international organizations, political parties, the media, civil society organizations and displaced persons. Environmental challenges can exacerbate pre-existing vulnerabilities, including marginalization due to race, gender, disability and other identity factors. Widely ratified international treaties and resolutions obligate the state to provide accessible electoral processes, including special measures for women, persons with disabilities, youth, Indigenous peoples and racial and other minorities who may be at increased risk of marginalization. They also are critical agents to address the consequences of climate change. Electoral Rights of Environmentally Displaced Persons emphasizes how environmental challenges can exacerbate pre-existing vulnerabilities, including marginalization due to race, gender, disability and other identity factors. Displaced persons are key stakeholders. Those most affected by environmental problems need to be able to vote, run for office and engage with candidates and elected representatives to influence agendas, challenge policies and hold governments accountable. Political participation is particularly important in integrating them into their new environments to avoid conflict with host communities. Displaced persons can also bring skills, insights and talents that benefit their new communities.
  • Topic: Climate Change, Environment, Elections, Displacement, Humanitarian Crisis
  • Political Geography: Global Focus
  • Author: David Hoffman
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: The Conference Board
  • Abstract: Many China organizations of western multinational companies (MNCs) report increasing friction and misalignment with headquarters (HQ) across a range of China issues. We observe three primary sources of tension and misalignment: a differing appraisal of risks, including, importantly, confidence in abilities to protect IP; a differing calculus on the evaluation of opportunities; and concerns, at HQ and Board level, about the control implications of increasingly divergent, if not more autonomous, China operations.
  • Topic: Economy, Business , Multinational Corporations, Private Sector
  • Political Geography: China, Asia, Global Focus
  • Author: Yannis Dafermos
  • Publication Date: 09-2021
  • Content Type: Working Paper
  • Institution: School of Oriental and African Studies - University of London
  • Abstract: It is now increasingly accepted that central banks and financial supervisors can no longer ignore climate change. However, there is no consensus on how they should address climate issues. On the one hand, there is a view that central banks and financial supervisors should mainly contribute to the assessment of the exposure of the financial system to climate-related financial risks, considering at the same time the possibility of incorporating climate risks into monetary policy and financial supervision and regulation. On the other hand, it is argued that central banks and financial supervisors need to take action such that they contribute directly to the decarbonisation of our economies and the prevention of climate systemic risks. In this paper, I analyse the main premises and implications of these two approaches and I explain why a systemic risk approach is necessary in the age of climate emergency. I also discuss the challenges involved in a policy agenda aiming at the reduction of climate systemic risks and I outline how these challenges can be tackled.
  • Topic: Climate Change, Finance, Risk, Banking
  • Political Geography: Global Focus
  • Author: Paige Arthur, Céline Monnier
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: After experimenting with months of lockdown and imposed social distancing measures in response to the COVID-19 pandemic, people everywhere now have a more immediate understanding of how prolonged crisis can create challenges for both individuals’ mental health as well as maintaining the social fabric of communities. However, social fragmentation and mental distress created by adverse environments are not new, nor are they limited to COVID-19. Gross social injustices or armed conflicts have provoked wide-spread mental suffering, broken down social norms, and undermined social cohesion since time immemorial. Generations grow up in the midst of violence, normalizing it, or losing capacity to trust others or their institutions. Hence, neglecting the psychosocial impacts of social injustices and violence on the individual and society undermines other efforts to build peaceful societies. Nevertheless, the use of mental health and psychosocial support (MHPSS) approaches to build peace or prevent violent conflict remains anecdotal and ad hoc. This paper summarizes the existing arguments for why MHPSS should be more systematically used to sustain peace, and offers four opportunities to use MHPSS approaches in sustaining peace efforts at the UN: Support national capacities; Integrate MHPSS as a normal part of sustaining peace strategies; Increase expertise on MHPSS as part of sustaining peace; Creative partnerships to support an integrated approach.
  • Topic: Mental Health, Peace, COVID-19, Health Crisis
  • Political Geography: Global Focus
  • Author: Gabriel Felbermayr, Alexander Tarasov
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: The distribution of transport infrastructure across space is the outcome of deliberate government planning that reflects a desire to unlock the welfare gains from regional economic integration. Yet, despite being one of the oldest government activities, the economic forces shaping the endogenous emergence of infrastructure have not been rigorously studied. This paper provides a stylized analytical framework of open economies in which planners decide non-cooperatively on transport infrastructure investments across continuous space. Allowing for intra- and international trade, the resulting equilibrium investment schedule features underinvestment that turns out particularly severe in border regions and that is amplified by the presence of discrete border costs. In European data, the mechanism explains about 16% of the border effect identified in a conventionally specified gravity regression.
  • Topic: Economics, Infrastructure, Governance, Borders, Trade
  • Political Geography: Global Focus
  • Author: Christopher Bohringer, Sonja Peterson, Thomas F. Rutherford, Jan Schneider
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: This article summarizes insights of the 36th Energy Modeling Forum study (EMF36) on the magnitude and distribution of economic adjustment costs to greenhouse gas emission reduction targets. Under the Paris Agreement countries voluntarily committed themselves to emission reductions – so-called Nationally Determined Contributions (NDCs) – in order to combat global warming. The study suggests that tightening of NDCs in line with the commonly agreed 2°C temperature target will induce global economic costs of roughly 1% in 2030 – yet, these costs are unevenly spread across regions with fossil fuel exporting countries being most adversely affected from the transition towards a low-carbon economy. In order to reduce adjustment costs at the global and regional level, comprehensive emissions trading which exploits leastcost abatement options is strongly desirable as it can relax contentious normative debates on equitable burden sharing. Lump-sum recycling of revenues from emissions pricing in equal amounts to every household appeals as an attractive strategy to mitigate regressive effects and thereby make stringent climate policy more acceptable on societal fairness grounds.
  • Topic: Climate Change, Energy Policy, Environment, Recycling, Carbon Emissions
  • Political Geography: Global Focus
  • Author: Jens Bohm, Sonja Peterson
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: Different reports including the broadly cited OECD fossil fuel subsidy inventory arrive at high monetary values of fossil fuel subsidies and suggest that phasing out these subsidies has a high potential to increase the efficiency of climate policies. We show that the inventory approach gives misleading information about this potential since there is little correlation with net carbon prices that actually reflect the stringency of climate policies. We use data on net fossil fuel taxation from the OECD´s Taxing Energy Use report and augment it with data on subsidies and emission permits, to calculate national and sectoral net carbon prices for the top six emitters (China, US, India, Russia, Japan and Germany) and for Poland and Sweden, two European countries perceived as examples of opposing environmental policies. Our results show that in high-income countries, subsidies mainly relate to reduced fuel tax rates for certain uses, so that e.g. Sweden, for which the OECD inventory reports subsidies per ton of CO2 26 times higher than the US, has a 770% higher national net carbon price than the US. While Germany and Russia have similar subsidy levels in the OECD inventory, the national net carbon price in Germany is 50 €/tCO2, while producer subsidies lead to a negative net carbon price of -6€/tCO2 in Russia. Our results illustrate that raising taxes on fossil fuels will often lead to higher reported inventory subsidies. Inventory measures thus give little information about the efficiency of climate policy. Our analysis also shows the large differences in net carbon prices across countries and across sectors within countries. Net carbon prices should replace fossil fuel subsidies in the policy debates and become the basis for national energy tax reforms and international agreements on minimum carbon prices.
  • Topic: Climate Change, Energy Policy, Environment, Natural Resources, Fossil Fuels
  • Political Geography: Global Focus
  • Author: Samuel Kling, Alexander Hitch
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Chicago Council on Global Affairs
  • Abstract: A recent poll from the Chicago Council on Global Affairs and The Harris Poll shows urban and suburban residents cities are looking to sustainable mobility to forestall a potential long-term shift to solo driving. With public transit ridership down sharply during the COVID-19 pandemic, cities are looking to sustainable mobility to forestall a potential long-term shift to solo driving. Sustainable mobility options such as public transit, cycling, and e-scooters can offer safe, affordable travel to residents. They can make transportation networks more resilient. Significantly, they can also reduce emissions from transportation, the source of about one-third of total carbon emissions in C40 member cities. Because many urban trips are short–in Chicago, half are less than three miles–advocates have long noted the potential for some solo car trips to be replaced with cycling, walking, e-scooters, or the bus. But how willing are urban residents to replace car trips with more sustainable modes? A recent poll conducted by the Chicago Council on Global Affairs and The Harris Poll surveyed urban and suburban residents in six large US metropolitan regions: New York City, Chicago, Los Angeles, Philadelphia, Houston, and Phoenix. The survey data represent the aggregated responses of residents across these metropolitan regions.
  • Topic: Infrastructure, Public Opinion, Cities, Survey
  • Political Geography: North America, Chicago, Global Focus, United States of America
  • Author: Gianluca Grimalda, David Pipke
  • Publication Date: 06-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: Redistribution differs widely across countries, but our understanding of why this is the case is limited. In democracies, the extent of redistribution should ultimately reflect citizens’ preferences. We measure preferences for redistribution in six developed countries through internationally standardized questions in which respondents are faced with realistic budgetary constraints on their choice. We also measure a broad array of demographic, attitudinal, and ideological characteristics and examine their correlations with the preferred pattern of redistribution. As expected, individual income is associated with lower demand for redistribution, but this relationship loses significance once other factors are controlled for. Beliefs on social mobility have, in the aggregate, the largest effect in reducing demand for redistribution, the effect being largest in the US but insignificant in Italy and Slovenia. Trust in government has a negative effect on demand for redistribution across all countries. In line with other studies, we interpret this result as evidence that people believing that the political élite is corrupt demand more redistribution. Financial security, a proxy for the Prospect of Upward Mobility hypothesis, is also a significant correlate of preferences for redistribution, the effect being largest in Japan but small in the UK and Slovenia. Finally, discrimination of racial minorities is associated with lower demand for redistribution, but the effect is only significant in the US and Germany. Overall, the main theories that have been proposed to account for preferences for redistribution are confirmed to be valid, but with significant variation across countries.
  • Topic: Minorities, Democracy, Economic Mobility, Social Order, Redistribution
  • Political Geography: Global Focus
  • Author: Dennis J. Snower, Colm Kelly
  • Publication Date: 07-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: This paper examines major forces that have decoupled economic and business prosperity from social prosperity and explores how recoupling can be promoted. Economists have specified well-known conditions under which free market enterprise with shareholder value maximization is efficient. These conditions are systematically violated by three forces – globalization, technological advance and financialization (GTF) – that have weakened the connections between economies and societies over the past four decades. Consequently, the recoupling process requires abandoning the default premise of economic decision making that social progress follows financial performance. For business, it calls for a move from shareholder to stakeholder value. For government, it calls for setting legal obligations, targets and incentives to ensure that stakeholder value is compatible with a rigorously defined concept of “societal and planetary value.”
  • Topic: Economics, Globalization, Science and Technology, Capitalism, Economic Theory
  • Political Geography: Global Focus
  • Author: Michael Bayerlein, Vanessa A. Boese, Scott Gates, Katrin Kamin, S. Mansoob Murshed
  • Publication Date: 07-2021
  • Content Type: Working Paper
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: Populist parties and actors now govern various countries around the world. Often elected by the public in times of crises and over the perceived failure of ‘the elites’, the question stands as to how populist governments actually perform once elected, especially in times of crisis. Using the pandemic shock in the form of the COVID-19 crises, our paper answers the question of how populist governments handle the pandemic. We answer this question by introducing a theoretical framework according to which populist governments (1) enact less far-reaching policy measures to counter the pandemic and (2) lower the effort of citizens to counter the pandemic, so that populist governed countries are (3) hit worse by the pandemic. We test these propositions in a sample of 42 countries with weekly data from 2020. Employing econometric models, we find empirical support for our propositions and ultimately conclude that excess mortality in populist governed countries exceeds the excess mortality of conventional countries by 10 percentage points (i.e., 100%). Our findings have important implications for the assessment of populist government performance in general, as well as counter-pandemic measures in particular, by providing evidence that opportunistic and inadequate policy responses, spreading misinformation and downplaying the pandemic are strongly related to increases in COVID-19 mortality.
  • Topic: Governance, Populism, Public Health, Pandemic, COVID-19
  • Political Geography: Global Focus
  • Author: Tara Moayed
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: Communities are not homogenous. Within a single community, there are often divisions along class, ethnic, and gender lines. Further, not all communities are the same. Dynamics from one community to the next can widely differ, including power relations, land allocations, gender dynamics, mobility, and the level of government influence. James Scott, in Seeing Like A State, showed how much of the vocabulary of state administration carries with it the mechanisms to disempower local authority and invest it in state agents who can then wield state authority. Rebalancing this relationship requires finding ways to overcome the monopolies over information, decision-making, and convening power that state agents have, particularly in systems that emerged from an extractive colonial context. Ignoring these dynamics when designing a CDD project will most likely result in elite capture, and possibly lead to local conflict, increased inequality, and erode trust between citizens and the state. This research paper argues the importance of the role of the community within the Pathfinders for Peaceful, Just and Inclusive Societies discussion over inequality. The paper’s case studies are based largely on government-led community-driven development (CDD) programs that aim to ensure recognition of the complicated dynamics within the community itself. Unless the heterogeneity of communities is considered and fostered through an inclusive design and facilitation process, no program or project can hope to impact inclusion, empowerment, and the citizen-state relationship. A deep understanding of community dynamics and good facilitation are prerequisites for any CDD model to have a positive social impact.
  • Topic: Citizenship, State, Community, Society, Inclusion
  • Political Geography: Global Focus
  • Author: Paul von Chamier
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: There is nothing equal about COVID-19. It is now well established that poor and underprivileged social groups have absorbed most of the pandemic’s negative impact. However, the connection between COVID-19 and inequality might run even deeper. During the first wave of the COVID-19 pandemic, one additional point of the Gini coefficient correlated with a 1.34 percentage point higher rate of weekly new infections across countries. This difference in infection rates compounds like interest every week. This means that after twenty-one weeks of the pandemic, just one additional Gini å correlates with an approximately 1/3 higher overall number of cases in a country. More equal countries might enjoy an “equality dividend” that is associated with more shock resilience during the ongoing crisis. This new research from CIC sought to understand if pre-existing systemic inequities could be linked to higher COVID-19 infection rates, examining infection rates in 70 countries from mid-March 2020 through early August 2020, or what is widely seen as the first 21 weeks of the pandemic. It also studied these nations’ levels of inequality and other potential predictive variables: government efficiency (a measure indicating quality of public services and civil service capability), urban population share, share of the population over the age of 65, lockdown measures (calculated by stringency), and geographic mobility (a population’s physical movements as measured by Google’s COVID-19 Community Mobility Reports). The study tracked inequality by using the “Gini Coefficient,” a commonly used metric for measuring income inequality within nations--or, specifically, how far a country’s wealth or income distribution deviates from a completely equal distribution. Under this calculation, the higher the coefficient, the greater the income inequality within that country.
  • Topic: Inequality, Resilience, COVID-19, Health Crisis, Society
  • Political Geography: Global Focus
  • Author: Attiya Waris
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: There are multiple examples of solidarity taxes imposed across country contexts over previous decades. The solidarity taxes that were levied were done to mitigate effects of a crisis such as a pandemic, as well as rebuilding of nations that had been affected by world wars (examples include Zimbabwe and Germany). Considering the renewed interest in solidarity taxes in the wake of COVID-19, author Attiya Waris reviews the history of solidarity taxes, and discusses key lessons from the past, in addition to drawing these lessons and findings into policy reccomendations moving forward.
  • Topic: Tax Systems, Pandemic, COVID-19, Economic Recovery
  • Political Geography: Germany, Zimbabwe, Global Focus
  • Author: Ricardo Fuentes-Nieva
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: “Taxes are what you pay for a civilized society” stated US Supreme Court Justice Oliver Wendell Holmes in 1927. Time has shown that “civilized” means better lives and livelihoods for people where there is a solid tax base and collection–a necessary although insufficient condition for a society where people feel safe, heard, and participant in the decisions of the nation. A government that can efficiently collect taxes is a government with a solid administration and with legitimacy based on the fact that citizens pay their taxes by a combination of laws and a sense of duty and belonging. Paying taxes involves legal and moral obligations. The standard economic model for tax compliance assumes a cost-benefit calculation where someone balances the cost of being caught cheating the tax systems versus the benefit keeping some money hidden to the tax authorities. Yet there are other important reasons why people pay taxes that are not captured by a purely rational calculation. This background paper provides a framework that channels tax morale via trust and fairness directly and three elements for each one indirectly; trustworthiness of the government, reciprocity, and transparency/accountability for trust and three types of justice for fairness: distributive, procedural and retributive. This paper also makes a special distinction to the issue of corruption and how it relates to the elements within this framework. This paper will discuss the evidence on voluntary tax compliance, trust, and fairness, and the set of policies and actions that affect different mechanisms. It will provide a new framework based on the literature about the drivers of trust and fairness, with particular attention to the issue of corruption and also provide historical examples where specific interventions have successfully strengthened the tax system. Finally, it will provide ideas on how to identify the best sequence of interventions for increased tax morale in a specific context.
  • Topic: Citizenship, Tax Systems, Peace, Inclusion
  • Political Geography: Global Focus
  • Author: Sanjay Reddy
  • Publication Date: 07-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: Shared capital, defined as a broadly distributed pattern of rights over productive assets, can be a powerful instrument to address economic and social inequalities. We argue that initiatives to bring about shared capital can foster both redistribution and recognition, and thereby bring about more inclusive and peaceful societies. Based on experience, we suggest moreover that they are feasible and can be advanced by suitable policies and actions—at local, national, and global levels. Shared capital can involve distribution of various rights of an asset, including those of use, control, income, and transfer. This paper considers nine cases which feature some experience of shared capital involving various kinds of rights being distributed and relate these to different kinds of assets. In almost every case, the state has an important role to play in facilitating the distribution of rights.
  • Topic: Regulation, Inequality, Peace, Sustainability, Capital, Redistribution , Inclusion
  • Political Geography: Global Focus
  • Author: Ian Goldin
  • Publication Date: 09-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: Social contracts determine what is to be provided and by whom. In democracies, political processes determine these outcomes, with the extent to which individuals, communities, cities, businesses, governments, and other actors and institutions provide education, health, security, infrastructure, and justice to shape what comes to be understood as the social contract. Whether prevailing social contracts produce desirable consequences, such as human rights, individual freedom, self-determination, human development, prosperity, and equality reflects their efficacy. What is considered an effective contract in the US or Europe, may however be viewed very differently in China, with the priorities and norms associated with shaping social contracts, as well as the means to achieve them, varying from country to country and over time. In this brief, author Ian Goldin shows that many existing social contracts are inadequate and require renewal to overcome countries’ failures to address the needs of the majority of their citizens. New pressures on societies arising from the pace of change associated with the technological and energy revolutions have created an urgent need to build new social contracts which ensure that no one is left behind. This need has been made all the more urgent by the COVID-19 pandemic, which has shown the extent to which large parts of society—informal sector workers, uninsured self-employed, unemployed, migrants, and others—have fallen by the wayside due to outdated or non-existent social contracts. Establishing secure and comprehensive social contracts is not synonymous with the establishment of a welfare state, as this is only one way to secure effective social contracts. How welfare states adapt to meet the new technological and energy transition, and which other models may serve to build effective social contracts is a key question.
  • Topic: Energy Policy, Science and Technology, Peace, Justice, Social Contract, Transition, Inclusion
  • Political Geography: Global Focus
  • Author: Ian Goldin
  • Publication Date: 09-2021
  • Content Type: Working Paper
  • Institution: Center on International Cooperation
  • Abstract: The world of work is undergoing a fundamental transformation that will impact on workers and job seekers everywhere. Among the key drivers of this change are the climate emergency, demographic shifts and technological revolutions. Far from heralding better lives, the employment transition which was created by the industrial revolution led to immense hardships, rapidly rising pollution and heightened levels of poverty, malnutrition, and civil strife, culminating in the French and other revolutions. Today we are faced with an even more rapid, radical, and wide-ranging transformation of work, which threatens to be as disrupting. This time, however, we have the means to analyze and prepare for change. The purpose of this research paper is to identify how employment is being transformed and to examine the options for a just transition, which will lead to improvements for workers around the world. Author Ian Goldin begins this paper by identifying the challenge we are facing. It then defines employment transitions and lays out the weaknesses of current models of employment. Finally, it suggests policy options which tackle transitional assistance for workers, aiming to draw overall conclusions on what works in different economies.
  • Topic: Science and Technology, Employment, Transition, Workforce
  • Political Geography: Global Focus
  • Author: Servaas Storm
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: The Rebuilding Macroeconomic Theory Project, led by David Vines and Samuel Wills (2020), is an important, albeit long overdue, initiative to rethink a failing mainstream macroeconomics. Professors Vines and Wills, who must be congratulated for stepping up to the challenge of trying to make mainstream macroeconomics relevant again, call for a new multiple-equilibrium and diverse (MEADE) paradigm for macroeconomics. Their idea is to start with simple models, ideally two-dimensional sketches, that explain mechanisms that can cause multiple equilibria. These mechanisms should then be incorporated into larger DSGE models in a new, multiple-equilibrium synthesis – to see how the fundamental pieces of the economy fit together, subject to it being ‘properly micro-founded’. This paper argues that the MEADE paradigm is bound to fail, because it maintains the DSGE model as the unifying framework at the center of macroeconomic analysis. The paper reviews 10 fundamental weaknesses inherent in DSGE models which make these models irreparably useless for macroeconomic policy analysis. Mainstream macroeconomics must put DSGE models, once and for all, in the Museum of Implausible Economic Models – and learn important lessons from non-DSGE macroeconomic approaches.
  • Topic: Economics, Economic Growth, Macroeconomics, Money, Demand, Models
  • Political Geography: Global Focus
  • Author: Servaas Storm
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Based on comparative empirical evidence for 22 major OECD countries, I argue that country differences in cumulative mortality impacts of SARS-CoV-2 are largely caused by: (1) weaknesses in public health competence by country; (2) pre-existing country-wise variations in structural socio-economic and public health vulnerabilities; and (3) the presence of fiscal constraints. The paper argues that these pre-existing conditions, all favorable to the coronavirus, have been created, and amplified, by four decades of neoliberal macroeconomic policies – in particular by (a) the deadly emphasis on fiscal austerity (which diminished public health capacities, damaged public health and deepened inequalities and vulnerabilities); (b) the obsessive belief of macroeconomists in a trade-off between ‘efficiency’ and ‘equity’, which is mostly used to erroneously justify rampant inequality; (c) the complicit endorsement by mainstream macro of the unchecked power over monetary and fiscal policy-making of global finance and the rentier class; and (d) the unhealthy aversion of mainstream macro (and MMT) to raising taxes, which deceives the public about the necessity to raise taxes to counter the excessive liquidity preference of the rentiers and to realign the interests of finance and of the real economy. The paper concludes by outlining a few lessons for a saner macroeconomics.
  • Topic: Global Recession, Economic Inequality, Macroeconomics, Austerity, Public Health, COVID-19, Health Crisis, Public Spending
  • Political Geography: Global Focus
  • Author: Walter Paternesi Meloni, Davide Romaniello, Antonella Stirati
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: The paper critically examines the New Keynesian explanation of hysteresis based on the role of long-term unemployment. We first examine its analytical foundations, according to which rehiring long-term unemployed individuals would not be possible without accelerating inflation. Then we empirically assess its validity along two lines of inquiry. First, we investigate the reversibility of long-term unemployment. Then we focus on episodes of sustained long-term unemployment reductions to check for inflationary effects. Specifically, in a panel of 25 OECD countries (from 1983 to 2016), we verify by means of local projections whether they are associated with inflationary pressures in a subsequent five-year window. Two main results emerge: i) the evolution of the long-term unemployment rate is almost completely synchronous with the dynamics of the total unemployment rate, both during downswings and upswings; ii) we do not find indications of accelerating or persistently higher inflation during and after episodes of strong declines in the longterm unemployment rate, even when they occur in country-years in which the actual unemployment rate was estimated to be below a conventionally estimated Non-Accelerating Inflation Rate of Unemployment (NAIRU). Our results call into question the role of long-term unemployment in causing hysteresis and provide support to policy implications that are at variance with the conventional wisdom that regards the NAIRU as an inflationary barrier.
  • Topic: Inflation, Macroeconomics, Unemployment, Labor Market
  • Political Geography: Global Focus
  • Author: Tarek A. Hassan, Jesse Schreger, Markus Schwedeler, Ahmed Tahoun
  • Publication Date: 03-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: We construct new measures of country risk and sentiment as perceived by global investors and executives using textual analysis of the quarterly earnings calls of publicly listed firms around the world. Our quarterly measures cover 45 countries from 2002-2020. We use our measures to provide a novel characterization of country risk and to provide a harmonized definition of crises. We demonstrate that elevated perceptions of a country's riskiness are associated with significant falls in local asset prices and capital outflows, even after global financial conditions are controlled for. Increases in country risk are associated with reductions in firm-level investment and employment. We also show direct evidence of a novel type of contagion, where foreign risk is transmitted across borders through firm-level exposures. Exposed firms suffer falling market valuations and significantly retrench their hiring and investment in response to crises abroad. Finally, we provide direct evidence that heterogeneous currency loadings on global risk help explain the cross-country pattern of interest rates and currency risk premia.
  • Topic: Economics, Employment, Investment, Risk, Contagion
  • Political Geography: Global Focus
  • Author: Claudia Fontanari, Antonella Palumbo, Chiara Salvatori
  • Publication Date: 05-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper extends to different indicators of labor underutilization the Updated Okun Method (UOM) for estimation of potential output proposed in Fontanari et al (2020), which, from a demand-led growth perspective, regards potential output as an empirical approximation to fullemployment output, as in A.M.Okun’s (1962) original method. Based on the apparent incapability of the official rate of unemployment to fully account for labor underutilization, in this paper we offer estimates of Okun’s law both with broad unemployment indicators and with an indicator of ‘standardized hours worked’ which we propose as a novel measure of the labor input. The paper reflects on the possible different empirical measures of full employment. The various measures of potential output that we extract from our analysis show greater output gaps than those produced by standard methods, thus highlighting a systematic tendency of the latter to underestimate potential output. Output gaps that underestimate the size of the output loss or that tend to close too soon during recovery, may produce a bias towards untimely restriction.
  • Topic: Economics, Labor Issues, Economic Growth, Demand, Unemployment
  • Political Geography: Global Focus
  • Author: Laurent Le Maux
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Walter Bagehot (1873) published his famous book, Lombard Street, almost 150 years ago. The adage “lending freely against good collateral at a penalty rate” is associated with his name and his book has always been set on a pedestal and is still considered as the leading reference on the role of lender of last resort. Nonetheless, without a clear understanding of the theoretical grounds and the institutional features of the British banking system, any interpretation of Bagehot’s writings remains vague if not misleading—which is worrisome if they are supposed to provide a guideline for policy makers. The purpose of the present paper is to determine whether Bagehot’s recommendation remains relevant for modern central bankers or whether it was indigenous to the monetary and banking architecture of Victorian times.
  • Topic: Economics, History , Central Bank, Lending
  • Political Geography: Global Focus
  • Author: Marc Flandreau, Stefano Pietrosanti, Carlotta E. Schuster
  • Publication Date: 10-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper explores the reasons why sovereign borrowers post collateral. Such behavior is paradoxical because conventional interpretations of collateral stress repossession of the assets pledged as the key to securing lenders against information asymmetries and moral hazard. However, repossession is generally difficult in the case of sovereign debt and in some cases impossible. Nevertheless, such sovereign “hypothecations” have a long history and are again becoming very popular today in developing countries. To explain sovereign collateralization, we emphasize an informational channel. Posting collateral produces information on opaque borrowers by displaying borrowers’ behavior and resources. We support this interpretation by examining the hypothecation “mania” of 1849-1875, when sovereigns borrowing in the London Stock Exchange pledged all kinds of intangible revenues. Yet, at that time, sovereign immunity fully protected both sovereigns and their assets and possessions. Still, we show that hypothecations significantly decreased the cost of sovereign debt. To explain how, we stress the pledges’ role in documenting sovereigns’ wealth and the management of revenue streams. Based on an exhaustive library of bond prospectuses collected from primary sources, matched with a panel of sovereign bond yields and an innovative measure of sovereign fiscal transparency, we show that collateral minutely described in debt covenants served to document and monitor sovereign resources and development prospects. Encasing this information in contracts written by lawyers served to certify the quality of the resulting data disclosure process, explaining investors’ readiness to pay a premium.
  • Topic: Economics, Finance, History , Innovation, Contracts, Sovereign Debt, Collateral
  • Political Geography: Global Focus
  • Author: Arturo Chang, Thomas Ferguson, Jacob Rothschild, Benjamin I. Page
  • Publication Date: 09-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Spontaneous, open-ended survey responses can sometimes better reveal what is actually on people’s minds than small sets of forced-choice, closed questions. Our analysis of closed questions and trade-related open-ended responses to 2016 ANES “likes” and “dislikes” prompts indicate that Americans held considerably more complex, more ambivalent, and – in many cases – more negative views of international trade than has been apparent in studies that focus only on closed-ended responses. This paper suggests that contrast between open- and closed-question data may help explain why the effectiveness of Donald Trump’s appeals to trade resentments surprised many observers.
  • Topic: International Trade and Finance, Public Opinion, Free Trade, Donald Trump, Data
  • Political Geography: Global Focus, United States of America
  • Author: Lance Taylor, Nelson H. Barbosa-Filho
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Recognizing that inflation of the value of output and its costs of production must be equal, we focus on a cost-based macroeconomic structuralist approach in contrast to micro-oriented monetarist analysis. For decades the import and profit shares of cost have risen, while the wage share has declined to around 50% with money wage increases lagging the sum of growth rates of prices and productivity. Conflicting claims to income are the underlying source of inflationary pressure. Inflation affects income (labor’s spending power) and wealth. Monetarist theory around 1900 concentrated on the latter (Bryan and the “Cross of Gold)” leading to the standard Laffer curve. It was replaced by the Friedman-Phelps model which has incorrect dynamics (labor payments do not fall during an expansion – they go up). Samuelson and Solow introduced a version of the Phillips curve that violates macroeconomic accounting. Rational expectations replaced Friedman but was immediately falsified by output drops after the Volcker shock treatment around 1980. There followed a complicated transition from rational expectations to inflation targeting, anchored by economists’ misunderstanding of the physical meaning of ergodicity and ontological blindness. It did not help that the real balance effect is irrelevant because money makes up a small part of wealth. Rather than issuing veiled threats of disaster if its policy advice is not followed, the Fed now announces inflation targets which it cannot meet. Contemporary structuralist theory suggests that conflicting income claims set the inflation rate. Firms can mark up costs but workers have latent bargaining power over the labor share that they can exercise. Import costs and policy repercussions complicate the picture, but a simple vector error correction model and visual analysis suggest that money wages would have to grow one percentage point faster than prices plus productivity for several years if the Fed is to meet a three percent inflation target. The results pose a Biden policy trilemma: (i) the only path toward a more egalitarian size distribution of income is through a rising labor share (money wage growth exceeds price plus productivity growth), (ii) which would provoke faster inflation with feedback to rising interest rates, and (iii) the resulting asset price deflation likely facing political resistance from Wall Street and affluent households.
  • Topic: Economics, Labor Issues, Inflation, Imports, Structuralism
  • Political Geography: Global Focus
  • Author: Anton Korinek, Joseph E. Stiglitz
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: Progress in artificial intelligence and related forms of automation technologies threatens to reverse the gains that developing countries and emerging markets have experienced from integrating into the world economy over the past half century, aggravating poverty and inequality. The new technologies have the tendency to be labor-saving, resource-saving, and to give rise to winner-takes-all dynamics that advantage developed countries. We analyze the economic forces behind these developments and describe economic policies that would mitigate the adverse effects on developing and emerging economies while leveraging the potential gains from technological advances. We also describe reforms to our global system of economic governance that would share the benefits of AI more widely with developing countries.
  • Topic: Development, Globalization, Science and Technology, Inequality, Artificial Intelligence, Redistribution
  • Political Geography: Global Focus
  • Author: Mark Glick, Gabriel A. Lozada
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: The fundamental originating principle of law and economics (L&E) is that legal decisions should be (and are) based on maximizing efficiency. But L&E proponents do not define “efficiency” in the way agreed to by most economists, as Pareto Efficiency. A Pareto optimal condition is obtained when no one can be made better off without making someone worse off. Pareto Improvements are win-win changes where no losers exist. In the judicial system, however, there are always winners and losers, because under Article III § 2 of the Constitution a legal case does not exist unless there is a justiciable “case or controversy” in need of resolution. Unable to use Pareto Efficiency, L&E scholars have been forced to adopt alternative definitions of efficiency. Most L&E scholars claim to define “efficiency” based on the work of Kaldor and Hicks, but (perhaps unwittingly) instead use a definition of “efficiency” derived from the 19th century idea of consumer surplus, which encompasses L&E notions such as “wealth maximization,” and “consumer welfare” in antitrust. Neither of these alternative definitions is viable, however. Outside of L&E, the Kaldor-Hicks approach has long been recognized to be riddled with logical inconsistencies and ethical failures, and the surplus approach is even more deficient. Remarkably, virtually none of the numerous L&E textbooks even hint at such problems. Critically, all definitions of efficiency improvements in economics are biased in favor of wealthy individuals or firms, either because they are dependent on the status quo ante distribution of assets, or because they bestow large advantages on parties with political influence or who can afford to bring lawsuits quickly. Many L&E practitioners treat efficiency improvements instead as being objectively good, an error revealing that L&E is primarily motivated by its neoliberal policy agenda.
  • Topic: Economics, Law, Neoliberalism, Efficiency
  • Political Geography: Global Focus
  • Author: Paula Reisdorf
  • Publication Date: 06-2021
  • Content Type: Working Paper
  • Institution: Centre for Global Political Economy, University of Sussex
  • Abstract: This paper examines the debates surrounding industrial capitalism’s origins, critiquing the Eurocentrism in the Political Marxist approach. Instead, using a dialectical framework, I argue that the transition from agrarian to industrial capitalism in Britain required the existence of slavery and settler colonialism in the New World. The reason for this is threefold: Firstly, the removal of surplus populations either to colonies or domestically by employing them in colony- related industries was necessary to avoid stagnation in capitalist development. Secondly, the cheapening of basic commodities leading to a reduction in wages (i.e. relative surplus value extraction) in Britain necessitated enslaved labour in the New World. Thirdly, British industrialisation itself required settler colonialism and slavery because of: 1) the importation of slave-produced raw materials that were manufactured in Britain, 2) the exportation of manufactured products to settler colonies in the Americas, 3) the investment into industry by slaveowners and 4) the credit provision by banks that were tightly linked to the slave trade. I, therefore, conclude by suggesting that taking seriously the links between capitalism and slavery/colonialism could unify post-colonialism and Marxism by demonstrating the interconnectedness between post-colonialism’s principal object of analysis – colonialism – and Marxism’s main object of analysis – capitalism.
  • Topic: Post Colonialism, Socialism/Marxism, Capitalism, Slavery, Colonialism, Settler Colonialism, Eurocentrism
  • Political Geography: Britain, Global Focus
  • Author: Rachel Stohl
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: The rate at which states are joining the 2013 Arms Trade Treaty (ATT) has naturally slowed. Universalization efforts have been carried out through a variety of different frameworks, both within the ATT regime—including the Working Group on Treaty Universalization (WGTU), a sponsorship programme and the Voluntary Trust Fund (VTF)—and by the United Nations, regional organizations and civil society. Universalization of the ATT contributes to the development of standards and norms in the international arms trade. If a party flouts the treaty’s require­ments, it undermines the treaty and makes universal­ization less meaningful. Thus, universalization means both expanding the number of states parties and ensuring that they live up to their obligations. This is one of a series of five papers that are being produced as part of a wider project aimed at taking stock of specific aspects of the ATT—its scope, the application of the risk-assessment criteria, its processes and forums, universalization efforts, and international assistance to support ATT implementation.
  • Topic: Arms Control and Proliferation, Treaties and Agreements, United Nations, Arms Trade, Risk
  • Political Geography: Global Focus
  • Author: Paul Holtom
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: The scope of the 2013 Arms Trade Treaty (ATT) refers to the conventional arms, ammunition/munitions, and parts and components that are covered by the treaty. ATT stakeholders are providing guidance and assistance for states parties to implement provisions on scope contained in Articles 2–5 of the Treaty. ATT Article 17(4) provides for the Conference of States Parties (CSP) to review the treaty’s scope to take into account relevant technological developments in the field of conventional arms. Now is an opportune moment to explore mechanisms to review the scope of the Treaty to keep it in line with, at least, the coverage of the United Nations Register of Conventional Arms (UNROCA). This is one of a series of five papers that are being produced as part of a wider project aimed at taking stock of specific aspects of the ATT—its scope, the application of the risk-assessment criteria, its processes and forums, universalization efforts, and international assistance to support ATT implementation.
  • Topic: Arms Control and Proliferation, Treaties and Agreements, Arms Trade
  • Political Geography: Global Focus
  • Author: Roberto Dondisch
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: The 2013 Arms Trade Treaty (ATT) has a number of attached processes and forums that are aimed at enabling and promoting both the effective implementation of the treaty by states parties and its further universalization. In order to operate effectively these processes and forums need to be designed and operated in ways that reflect the ATT’s unique status as a trade treaty with a core humanitarian objective. The ATT states parties must consider the current support architecture and the challenges that it faces. These include effectively transitioning from a negotiation to an implementation framework; avoiding inherent risks to the treaty’s objective; implementing the risk-mitigation clause; maintaining the balance between exporters and importers; preserving transparency; and implementing possible good practice options. This is one of a series of five papers that are being produced as part of a wider project aimed at taking stock of specific aspects of the ATT—its scope, the application of the risk-assessment criteria, its processes and forums, universalization efforts, and international assistance to support ATT implementation.
  • Topic: Arms Control and Proliferation, Treaties and Agreements, Arms Trade
  • Political Geography: Global Focus
  • Author: Giovanna Maletta, Sibylle Bauer
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: The provision of international assistance is key to achieving the effective implementation of the 2013 Arms Trade Treaty (ATT). Assistance instruments include the ATT’s own Voluntary Trust Fund (VTF), mechanisms established by the United Nations and the European Union (EU), and efforts by other international and regional organizations and non-governmental organizations (NGOs). The donors, implementers and ATT states parties should reflect on the role played by the assistance instruments in improving implementation of the treaty. To strengthen the role of international assistance in supporting implementation of the ATT, the ATT Secretariat and ATT-related processes and assistance programmes should enhance the sustainability and effectiveness of assistance efforts and further improve coordination. This is one of a series of five papers that are being produced as part of a wider project aimed at taking stock of specific aspects of the ATT—its scope, the application of the risk-assessment criteria, its processes and forums, universalization efforts, and international assistance to support ATT implementation.
  • Topic: Arms Control and Proliferation, Treaties and Agreements, Arms Trade
  • Political Geography: Global Focus
  • Author: Nan Tian, Alexandra Marksteiner, Diego Lopes da Silva
  • Publication Date: 04-2021
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: World military expenditure in 2020 is estimated to have been $1981 billion, the highest level since 1988—the earliest year for which SIPRI has a consistent estimate for total global military spending. World military expenditure in 2020 was 2.6 per cent higher in real terms than in 2019 and 9.3 per cent higher than in 2011. The global military burden—world military expenditure as a share of global gross domestic product—rose by 0.2 percentage points in 2020, to 2.4 per cent. This increase was largely due to the fact that most countries in the world experienced severe economic downturns in 2020 related to the Covid-19 pandemic, while military expenditure continued to rise overall. This Fact Sheet highlights the regional and national military expenditure data for 2020 and trends over the decade 2011–20. The data is from the updated open-access SIPRI Military Expenditure Database, which provides military spending data by country for the years 1949–2020.
  • Topic: Military Affairs, Military Spending, Disarmament
  • Political Geography: Global Focus
  • Author: Elise Remling, Amar Causevic
  • Publication Date: 01-2021
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: Nationally determined contributions (NDCs) are the central instrument for states to communicate their con­tribution to the 2016 Paris Agreement on climate change and reflect their wider approach to climate mitigation and adaptation. This SIPRI Insights paper analyses how the 2020 updated NDCs (16 submissions as of October 2020) discuss climate-related security risks and compares them with 2015. It finds that climate change is mainly seen as a risk to socio-economic development and human security and almost never as a risk to societal stability or the functioning of the state. The assessment of risks in NDCs largely focuses on direct climate impacts. This suggests that countries are currently not considering the risks from indirect climate impacts, including those that cross national borders, or the unintended adverse con­sequences of adaptation or mitigation responses. Going forward, countries will need to take account of the multi­faceted and transboundary character of climate risks in their NDCs in order to meet global expectations and goals.
  • Topic: Security, Climate Change, Development, Risk, Peace
  • Political Geography: Global Focus
  • Author: Andreas Tsamados
  • Publication Date: 07-2021
  • Content Type: Working Paper
  • Institution: Hellenic Foundation for European and Foreign Policy (ELIAMEP)
  • Abstract: Artificial Intelligence (AI) is slowly moving past the public bewilderment phase that is common to most revolutionary technologies. In the past decade, AI has often been portrayed as either a sentient technology with an apocalyptic destiny, or as a silver bullet for most if not all conceivable problems ranging from the climate emergency to global crime prevention. This article contributes to a more recent and realistic assessment that is beginning to see the light: AI is a powerful technology that can help us address a wide range of well-defined problems given proper design, development, integration and monitoring.
  • Topic: Science and Technology, Innovation, Artificial Intelligence
  • Political Geography: Global Focus
  • Author: Gianluca Orefice, Hillel Rapoport, Gianluca Santoni
  • Publication Date: 06-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: How does immigration affect export performance? To answer this question, we propose a unified empirical framework allowing to disentangle various mechanisms put forth in previous literature. These include the role of networks in reducing bilateral transaction costs as well as productivity shifts arising from migration-induced knowledge diffusion and increased workforce diversity. While we find evidence supporting all three channels (at both the intensive and the extensive margins of trade), our framework allows to gauge their relative importance. We then focus on diversity and find stronger results in sectors characterized by more complex production processes and more intense teamwork cooperation. This is consistent with theories linking the distribution of skills to the comparative advantage of nations. The results are robust to using a theoretically grounded IV approach combining three variations on the shift share methodology.
  • Topic: Labor Issues, Immigration, Immigrants, Diversity, Trade
  • Political Geography: Global Focus
  • Author: Cécile Couharde, Carl Grekou
  • Publication Date: 10-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: This paper proposes a new de facto classification of exchange rate regimes, the synthesis classification. The proposed framework has several advantages over existing de facto classifications. First, it offers a unified framework based on the most divergent classifications, the RR and LYS classifications, leading not only to a broader coverage but also to encompass a broad spectrum of exchange systems. Second, it fits better with the known history of exchange rate regimes developments in the post-Bretton Woods era. Among others, it brings an interesting nuance to the so-called hollowing-out hypothesis by showing that the evolution of de facto regimes —especially in emerging economies since the late 1990s— has essentially involved movement toward more tightly “managed” intermediate regimes and not a shift away from such regimes. As an illustration of the insightfulness of our classification, we empirically revisit the nexus between currency crises and exchange rate regimes. In addition to associate a higher probability of currency crisis to both intermediate and floating regimes, our classification, also displays better statistical performances than other classifications in predicting currency crises.
  • Topic: Economics, International Cooperation, International Trade and Finance, Exchange Rate Policy, Currency
  • Political Geography: Global Focus
  • Author: Enzo Dia, Jacques Melitz
  • Publication Date: 11-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: We show that the heavy use of legal services relative to output in the US is not a peculiarity of the country but applies to common law countries in general. It stems largely from better ability to contract and easier access to justice. Yet in close association, common law also opens significantly more room for rentseeking by lawyers than civil law. Thereby the costs could outweigh the benefits. Both real GDP per capita and openness emerge as further factors making room for lawyers.
  • Topic: International Cooperation, International Law, Labor Issues, Law
  • Political Geography: Global Focus
  • Author: Christophe Gouel, Sébastien Jean
  • Publication Date: 12-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: This paper shows how gains from trade are conditioned by love of variety, defined as the extent to which an additional product variety generates benefits in either final or intermediate consumption. We develop a multi-country, multisector gravity trade model where love of variety is parameterized separately from product substitutability using a generalized CES demand function, and show analytically how gains from trade depend on love of variety through different channels that we identify and interpret. In this context, except for very specific parameterizations, gains from trade differ between a heterogeneous- and a homogeneous-firm model. Counterfactual simulations based on a calibrated version of this model show that, all other things being equal, the assessed gains from trade commonly vary by a proportion of one to three depending on the value of the love-of-variety elasticity, in a way that differs significantly across countries. Trade war simulations also point to the strong sensitivity of the assessed impacts. We conclude that love of variety is a key determinant of the gains from trade, an aspect that has so far been overlooked for the sake of convenience in the modeling framework and due to lack of empirical estimates.
  • Topic: International Cooperation, International Trade and Finance, Trade Wars, Models
  • Political Geography: Global Focus
  • Author: Thierry Mayer, Hillel Rapoport, Camilo Umana Dajud
  • Publication Date: 12-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: Many of the measures to contain Covid-19 severely reduced business travel. Using provisions to ease the movement of business visitors in trade agreements, we show that removing barriers to the movement of business people promotes trade. To do this, we first document the increasing complexity of Free Trade Agreements. We then develop an algorithm that combines machine learning and text analysis techniques to examine the content of FTAs. We use the algorithm to determine which FTAs include provisions to facilitate the movement of business people and whether those provisions are included in dispute settlement mechanisms. Using these data and accounting for the overall depth of FTAs, we show that provisions facilitating business travel indeed facilitate business travel (but not permanent migration) and, eventually, increase bilateral trade flows.
  • Topic: International Cooperation, International Trade and Finance, Migration, Business , Free Trade, Pandemic, COVID-19
  • Political Geography: Global Focus
  • Author: Keith Head, Thierry Mayer
  • Publication Date: 12-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: Constant elasticity of substitution (CES) demand for monopolistically competitive firm-varieties is a standard tool for models in international trade and macroeconomics. Inter-variety substitution in this model follows a simple share proportionality rule. In contrast, the standard toolkit in industrial organization (IO) estimates a demand system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO approach comes at the expense of requiring richer data and greater computational challenges. This paper uses the dataset of Berry et al. 1995, who established the modern IO method, to simulate counterfactual trade policy experiments. We use the CES model as an approximation of the more complex underlying demand system and market structure. Although the CES model omits key elements of the data generating process, the errors are offsetting, leading to reasonably accurate counterfactual predictions. For aggregate outcomes, it turns out that incorporating non-unitary pass-through matters more than fixing over-simplified substitution patterns. We do so by extending the commonly used methods of Exact Hat Algebra and tariff elasticity estimation to take into account oligopoly.
  • Topic: Economics, Business , Monopoly, Trade, Models
  • Political Geography: Global Focus
  • Author: Lionel Fontagné, Erica Perego, Gianluca Santoni
  • Publication Date: 12-2021
  • Content Type: Working Paper
  • Institution: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
  • Abstract: What will the global economy look like in a generation? The answer depends on the multiple forces driving long-term growth (demography, education, diffusion of technical progress, energy costs, investment and saving behaviour, international capital mobility) and requires a comprehensive framework to conceptualise them. We re-estimate the three-factor (capital, energy, labour) MAcro-econometric model of the Global Economy (MaGE), initially developed by Fouré et al. (2013), with a database covering 170 countries using state-of-the-art methods. We thus establish the long-term structural relationships that drive the dynamics of the World economy. The model projections to 2050 illustrate the expected changes in the World economy and their driving forces. In light of the projected volume of energy consumption, making these projections compatible with climate imperatives calls for increased technology sharing at the international level in order to decouple economic growth from energy use.
  • Topic: Economics, Energy Policy, International Trade and Finance, Macroeconomics
  • Political Geography: Global Focus
  • Author: Karen Eggleston, Yong Suk Lee, Toshiaki Lizuka
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Walter H. Shorenstein Asia-Pacific Research Center
  • Abstract: In one of the first studies of service sector robotics using establishment-level data, we study the relationship between robots and staffing in Japanese nursing homes. We utilize variation in robot subsidies across prefectures as an instrumental variable to explore the impact of robot adoption on nursing homes’ staffing decisions. We find that robot adoption appears to decrease difficulty in staff retention and to increase employment by augmenting the number of care workers and nurses on flexible employment contracts. Robot adoption is negatively correlated with the monthly wages of regular nurses, consistent with reduced burden of care such as fewer night shifts. Our findings suggest that robots may not be detrimental to labor and may help to remedy challenges posed by rapidly aging populations.
  • Topic: Science and Technology, Labor Issues, Services, Innovation, Artificial Intelligence, Robotics, Emerging Technology, Labor Cost
  • Political Geography: Global Focus
  • Author: Oliver Hart
  • Publication Date: 02-2021
  • Content Type: Working Paper
  • Institution: Walter H. Shorenstein Asia-Pacific Research Center
  • Abstract: A quarter-century ago in a seminal paper, Hart, Shleifer, and Vishny (NBER1996, QJE1997) developed a theory of the ‘Proper Scope of Government.’ Oliver Hart, 2016 Nobel Laureate, reflects on that framework and its place in economics, as well as the inspiration for his more recent work on norms, guiding principles, and contracts as reference points. In discussion with Karen Eggleston, Hart answers questions posed by economists who have built upon Hart, Shleifer and Vishny (1997) and offers insights on how the theory applies to understanding public and private roles in healthcare, education, and other publicly-financed services.
  • Topic: Education, Privatization, Political Theory, Governance, Health Care Policy, Social Services, Public Service
  • Political Geography: Global Focus
  • Author: Gary White, Natalia Alejandra Escobar Cadena
  • Publication Date: 08-2021
  • Content Type: Working Paper
  • Institution: Geneva Centre for Security Sector Governance (DCAF)
  • Abstract: The use of police force, either in the context of management of public assemblies and demonstrations or in the context of more routine police functions such as searches, seizures or arrests, has come under increased scrutiny around the world. Latin America, in particular, has become the epicentre of a wave of police reforms triggered by incidents involving the use of force. This publication aims to provide guidance on the key pillars that shape governance of police use of force. The paper focuses on the three main dimensions of the use of force: rule of law, human resources, and accountability. The document was built upon the work that DCAF has undertaken with police organisations in different regions and is informed by DCAF’s decades of experience supporting police reform processes across a range of countries. It offers specific examples to illustrate the context-dependent nature of each countries’ practices. While some of the examples come from countries with relatively low levels of crime and violence, the rationale behind their use of force practices is still worth considering as the underlying principles can often be adapted even to contexts that are more fragile or complex.
  • Topic: Crime, State Violence, Violence, Police, Power
  • Political Geography: Global Focus
  • Author: Trevon Logan, Peter Temin
  • Publication Date: 01-2020
  • Content Type: Working Paper
  • Institution: Institute for New Economic Thinking (INET)
  • Abstract: This paper records the path by which African Americans were transformed from enslaved persons in the American economy to partial participants in the progress of the economy. The path was not monotonic, and we organize our tale by periods in which inclusiveness rose and fell. The history we recount demonstrates the staying power of the myth of black inferiority held by a changing white majority as the economy expanded dramatically. Slavery was outlawed after the Civil War, and blacks began to participate in American politics en masse for the first time during Reconstruction. This process met with white resistance, and black inclusion in the growing economy fell as the Gilded Age followed and white political will for black political participation faded. The Second World War also was followed by prosperity in which blacks were included more fully into the white economy, but still not completely. The Civil Rights Movement proved no more durable than Reconstruction, and blacks lost ground as the 20th century ended in the growth of a New Gilded Age. Resources that could be used to improve the welfare of whites and blacks continue to be spent on the continued repressions of blacks.
  • Topic: Economics, Race, History, Capitalism, Slavery
  • Political Geography: United States, Global Focus
  • Author: Gordan Akrap
  • Publication Date: 01-2020
  • Content Type: Working Paper
  • Institution: Institute for Development and International Relations (IRMO)
  • Abstract: Hybrid threats and hybrid conflicts and wars are one of those terms that have suddenly entered in public knowledge, raising many concerns. This is not surprising because there is no common and generally accepted definition of hybrid threats by which these processes are defined. The emergence of this term in the the complexity of this issue. Specifically, hybrid threats are not a new phenomenon to theorists of conflicts and wars. What makes hybrid warfare different from previous wars is the change in the importance and intensity of the individual components of the conflict, such as information or influence warfare component. In fact, until regional media space was, in the beginning, connected with journalist’s perception that intention of the state is to impose censorship of writing and publishing. Over time, fear in the media receded and gave way to understanding the end of the 20th century, information and media operations, that could be called influence or cognitive operations, were in the function of military operations.
  • Topic: Foreign Policy, Military Strategy, Conflict
  • Political Geography: Global Focus