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81. Dollar Colonisation: The Destructive Policy Implications of Modern Monetary Theory

Author:
Photis Lysandrou
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
Modern monetary theory argues that all governments that issue their own currency have the same policy space. The present paper argues that this position is wrong. For it to be valid, abstraction must be made from the gravitational force of the US dollar that stems from its backing mass of securities and is transmitted through international investment flows. On recognition of this gravitational force, it becomes clear that the huge size disparity separating the US financial market from those of other markets, and most notably those of the EMEs, translates into an equally huge disparity regarding policy space. The policy implications for EME governments are that they should, where possible, join their financial markets into regional blocs of sufficient sizes as can give their regional currencies enough backing mass to allow them to resist the gravitational pull of the dollar. Only by pooling their currency sovereignty can EME governments retain some scope for pursuing policies independently of those pursued by the US government. On the contrary, any such scope is destroyed if EME governments in countries with small financial markets follow the MMT's advice to retain their local currencies because that advice condemns these currencies to entrapment in the dollar's gravitational field and even possibly to outright dollar colonisation.
Topic:
Currency, Dollar, Colonization, and Modern Monetary Theory
Political Geography:
Global Focus

82. Black Intergenerational Mobility, Libertarian Capitalism, and Authoritarian Government, 1877–1941: A Case Study

Author:
Patrick L. Mason
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
There are persistent multigenerational Black-white gaps in occupational attainment. These racial differences in intergenerational mobility are not caused by differences in family values and behavior (Mason, 2007). For three decades, I have gathered evidence on my family’s intergenerational transition from enslavement to present social and economic circumstances. Charles and Susan Rollins were 32 and 29 years-old, respectively, as enslavement ended in 1865. During Reconstruction, they accumulated wealth, established a successful dairy and other farming, helped found a church and religious organizations, helped found multiple civic organizations, served on boards affiliated with the local university and high school, were elected to County and State public office, had savings and bank accounts for the entire family, and were leaders among an extensive social network. Jim Crow in the South and anti-black racism in the north stymied upward mobility for the Rollins family for the three generations after Charles and Susan, despite the fact that their descendants obtained greater education than their ancestors, displayed a willingness to relocate 100s of miles away from their home, possessed a culture of achievement (hard work, future orientation, married couple families, etc.), were blessed with exceptional social capital, and, perhaps, the relative advantage of being mulattoes.
Topic:
History, Authoritarianism, Capital, Libertarianism, and Social Mobility
Political Geography:
North America and United States of America

83. Fracking or No Fracking? How a Green Transition Can Work for Workers

Author:
Robert Pollin and Jeannette Wicks-Lim
Publication Date:
02-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Throughout the 2024 U.S. Presidential campaign, the only climate-related issue to achieve prominence was the question of whether to ban fracking operations in the United States. Donald Trump is a long-time climate denier, and therefore had no qualms in supporting fracking and all other techniques for extracting fossil fuels from the ground. By contrast, Kamala Harris had supported a nationwide ban on fracking during her 2019 presidential campaign. This was due to the severe negative environmental and public health impacts of this natural gas extraction technique and because burning natural gas to produce energy generates CO2 emissions that cause climate change. But Harris opposed a fracking ban in 2024 on the assumption that the ban would impose major costs to the economy of Pennsylvania, which has the second-largest fracking operations among U.S. states, after Texas only. Such negative economic outcomes in Pennsylvania would indeed result if fracking were banned in the U.S. and no large-scale alternative economic activities were introduced into Pennsylvania’s economy. But banning fracking must be understood as one component of a much larger program to advance a viable climate stabilization program, in Pennsylvania, and everywhere else. We find that building a clean energy-dominant infrastructure in Pennsylvania—focused on investments in energy efficiency and renewable energy sources—will generate approximately 160,000 jobs in the state. Meanwhile, phasing down fracking and all other fossil fuel activities by 50 percent between 2026 – 35 will entail job losses in the range of 1,700 per year within the state. We argue that these 1,700 displaced fossil fuel workers should receive just transition policies that include pension, employment and income guarantees, in addition to, as needed, retraining and relocation support. We estimate that such a just transition program for these workers will cost in the range of $240 million per year. This amounts to about 0.02 percent of Pennsylvania’s current GDP. Thus, we show how, between 2026 – 2035, Pennsylvania could phase out 50 percent of all its fossil fuel production activities—including fracking operations—while also providing generous support for workers to transition out of their fossil fuel industry jobs and into activities that both raise public health and environmental standards in the state and contribute toward a viable global climate stabilization project.
Topic:
Climate Change, Elections, Green Transition, and Fracking
Political Geography:
North America and United States of America

84. Employment in Child Care and Early Education in the U.S. 2000-2021

Author:
Aritra Basu and Nancy Folbre
Publication Date:
02-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Accurate assessment of trends in the availability and affordability of childcare services in the U.S. hinges on accurate assessment of a paid labor force that is difficult to precisely measure, because it spans a wide range of informal and formal institutional arrangements. This paper calls attention to these measurement problems and traces significant changes in the composition of child care and early education employment from 2000 to 2021 based on data from the American Community Survey (ACS). It shows that employment in the Child Day Care Services industry has become an increasingly poor measure of the number of those employed in Child Care and Preschool/Kindergarten occupations, due to increased provision in both Private Household Services and Elementary and Secondary Education industries. Comparisons of worker characteristics and median annual earnings across occupations and industries highlight the effects of institutional context, including differences in the composition of demand for paid care services. Consideration of these issues points to the need for specific improvements in labor force survey design.
Topic:
Labor Issues, Employment, Survey, and Child Care
Political Geography:
North America and United States of America

85. IMF, Structural Adjustment, and Poverty: A Cross-National Difference-in-Differences Analysis, 1980-2018

Author:
Shih-Yen Pan, Lawrence P. King, and Elias Nosrati
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The International Monetary Fund (IMF) has been one of the world’s most powerful international organizations in setting the parameters for economic reforms in the developing world. In this study, using data from 1980-2018 from 57 countries, we test competing hypotheses surrounding the impact of the IMF’s lending programs on poverty incidence in participant countries. Departing from the prevailing practice of relying on instrumental variables, we employ a novel difference-in-differences approach that ensures clean comparisons between “treatment” and “control” units based on their program participation histories. Besides providing a quantitative estimate of the average program effect, we evaluate whether the IMF’s alleged anti-poverty focus in recent decades has made any difference. We find that IMF program participation leads to large increases (3.6-5.7 percentage points) in the proportion of a country’s population living under the $3.65/day and $6.85/day international poverty lines (2017 PPP) and the countryspecific Societal Poverty Line. We also find that the poverty reduction measures incorporated by the IMF into its programs have not been effective in mitigating the poverty-increasing program effects. Overall, our findings show that IMF programs have been detrimental to the welfare of vulnerable populations in participant countries.
Topic:
Development, Economics, International Organization, and IMF
Political Geography:
Global Focus

86. Oil and the Cameroonian Economy: A Story of Unfulfilled Potential

Author:
Léonce Ndikumana, Hans Tino Mpenya Ayamena, and Juste Lokossou
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
While Cameroon is one of the most endowed African countries in a wide range of overground and underground natural resources, it has struggled to leverage these resources to secure a decent living standard for the majority of its population. Instead of boasting impressive development outcomes, Cameroon is among African resource rich countries that are known for suffering high financial hemorrhage through capital flight. In a sense, capital flight from Africa has become a chronic manifestation of the ‘resource curse’ that tends to plague countries that are endowed with vast amounts of resources in a context of poor institutions and weak regulatory frameworks. This study provides a detailed analysis of the historical emergence of an externally dominated oil sector and the institutional and regulatory arrangements governing the sector to shed light on the causes of the country’s failure to fulfill its potential considering its impressive resource endowment. The evidence may shed light on strategies to usher a new path towards a Cameroonian economy beyond oil.
Topic:
Oil, Natural Resources, and Economy
Political Geography:
Africa and Cameroon

87. Do alternative households improve paid employment outcomes? A comparative analysis of same-sex partnerships in Brazil

Author:
Cicero Braga and James Heintz
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper explores the labor market implications of household formation among same-sex married couples in Brazil, comparing them with different-sex married couples and unpartnered individuals. Using data from the Pesquisa Nacional por Amostra de Domicílios Contínua (PNADC) from 2016 to 2019, the study provides a descriptive overview of same-sex households and analyzes patterns of partnership formation, racial and educational endogamy/homogamy, and paid employment outcomes. Despite data limitations, findings suggest that same-sex couples may benefit from household formation by adopting alternatives to traditional patriarchal dynamics. Women in same-sex partnerships exhibit greater labor market participation and earnings, while men may experience reduced pressure to conform to traditional breadwinner roles. All married/partnered individuals earn a wage premium, relative to unpartnered individuals, but this premium varies by type of couple, sex, and the partner’s education and employment status. The paper highlights the importance of recognizing diverse household structures to fully understand economic well-being and inequities. Further research on the broader spectrum of "families of choice" is necessary to better capture the economic experiences of the LGBTI community in Brazil.
Topic:
Employment, LGBT+, Economic Inequality, Labor Market, Household, and Gender Roles
Political Geography:
Brazil and South America

88. Investing in a Green Future: Finance, Industrial Policy and the Green transition

Author:
Ramaa Vasudevan
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
We present a framework to assess green climate finance and the pathways to building a climate aligned financial system. This would involve the strategic reorientation of central bank interventions, national development banks and multilateral and regional banks and coherent purposive collaborations between these institutions and interventions to decisively reshape the contemporary global financial system that is out of tune with the long-term imperatives of climate action. Aligning finance to climate goals at the necessary scale, pace and direction requires the calibration of financial flows across three axes: ‘public-private’; ‘real-financial’ and ‘national-international’. Along the first axis the naturedepleting, climate imperiling logic of short-term private profitability needs to be contained in order to pursue the public priorities of climate action. Along the second axis, policy efforts have to be geared to ensuring that financial flows are financing investments in climate mitigation and adaptation and not simply providing more fodder for the global portfolio glut and financial accumulation. Finally, along the third axis warding global funding and support on appropriate terms has to be provided to the most vulnerable countries while buttressing national ownership of the green mission.
Topic:
Climate Change, Industrial Policy, Banking, and Green Transition
Political Geography:
Global Focus

89. The Distribution of Climate Finance among Annex-II Countries: A CBDR-RC Approach for Partial Funding of the Developing Countries

Author:
Shouvik Chakraborty
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Developing nations face the significant challenge of reconciling their efforts in climate change mitigation with the urgent need for financial resources to adapt to climate-related disasters, achieve sustainable development, and stabilize their economies. The financial requirements for addressing climate impacts span various sectors, including energy transition, energy efficiency, transportation, agriculture, forestry, other land use (AFOLU), and adaptation strategies. Estimates provided by reputable international organizations, such as the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), and the Intergovernmental Panel on Climate Change (IPCC), suggest that the annual global climate finance needs may range from $4.2 trillion to $5.7 trillion. Within this framework, the share allocated to developing countries is estimated to constitute approximately $1.9 trillion to $2.0 trillion annually, mainly to support mitigation efforts. It is widely acknowledged that developing countries are unlikely to meet these financial demands independently. Consequently, it is projected that around $1 trillion must be sourced from advanced economies, particularly the AnnexII countries. This paper introduces a methodology grounded in the principles of common but differentiated responsibility and respective capability (CBDR-RC). It facilitates a structured distribution of financing responsibilities among Annex II nations. The methodology incorporates the notion of historical responsibility, quantified as carbon debt, while also measuring capability through a balanced consideration of the wealth and gross domestic product (GDP) of the AnnexII countries. The analysis conducted reveals that the United States of America (USA) is required to contribute nearly half of the total financial obligations among the AnnexII countries, with the remaining funds to be apportioned among other nations within this group.
Topic:
Development, Finance, Climate Finance, and Burden Sharing
Political Geography:
Global Focus

90. Navigating Debt Sustainability: An In-Depth Analysis of the IMF's Debt Sustainability Framework and Its Critique

Author:
Hasan Cömert, Güney Düzçay, and T. Sabri Öncü
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper evaluates the IMF's debt sustainability analyses (DSAs), delving into their methodologies and implications and highlighting their problems. Since 2002, the DSAs have been the cornerstone of the IMF programs, providing the primary analytical tool to justify and determine the paths and targets specified. Although the DSAs evolved significantly over time, they have severe foundational problems. They rely heavily on strong assumptions and staff judgments, and thereby, they are primarily non-transparent. Secondly, there are significant issues regarding the conduct of DSAs. They have grown excessively complex, hindering consensus on components without necessarily improving assessment quality. Thirdly, the IMF makes very high-stakes decisions with low precision, relying on persistent over-optimism in growth forecasting and paving the way for tighter fiscal policies. Fourthly, the debt dynamics equation of DSAs is inconsistent with stock flow dynamics because it focuses heavily on the primary balance as the main driver. Fifthly, the IMF's framework does not pay enough attention to the underlying reasons for accumulating external debt in developing nations. It often treats external borrowing as a substitute for domestic debt without accounting for the asymmetric international financial architecture.
Topic:
Debt, Fiscal Policy, Sustainability, and IMF
Political Geography:
Global Focus