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151. Paying Off Populism: How Regional Policies Affect Voting Behavior

Author:
Robert Gold and Jakob Lehr
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper shows that regional policies can decrease populist support. We focus on the “development objective” (Objective-1) of the European Regional Development Fund (ERDF), meant to support lagging-behind regions. For causal inference, we exploit three sources of quasi-exogenous variation in a Regression-Discontinuity-Design (RDD), a Difference-in- Differences framework (DiD), and with matching techniques. Using NUTS3-level panel data on the outcomes of elections to the EU parliament, observed over the period 1999-2019, we consistently find that Objective-1 transfers reduces the vote share of right-fringe parties by about 2.5 pp. Left-fringe party support is not affected. Complementary analyses of individual-level survey data from the Eurobarometer show that the European Regional Policy increases trust in democratic institutions and decreases discontent with the EU.
Topic:
Political Economy, European Union, Populism, Regional Integration, Currency, and Regional Politics
Political Geography:
Europe

152. What role for Chinese FDI in Africa? New survey evidence from Ethiopia and Ghana

Author:
Charles Ackah, Alemayehu Geda, Holger Görg, and Federico Merchan
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Foreign investments bring in not only new employment but also novel technology, managerial skill and know-how, that may also dissipate into the local economy. It is not clear whether this effect differs by the nationality of source countries, in particular between Chinese and non-Chinese firms. Based on a firm level survey on Ethiopia and Ghana, we found that all types of firms are engaged in limited R&D and innovation activity and their transfer to host countris in both countries. There is little difference between Chinese and non-Chinese foreign firms in such technology and managerial skill transfer once controlling for firm size and industry characteristics in the majority of metrices (R&D activities, horizontal & vertical spillover, directly adopting techniques). However, we found for Ghana that Chinese firms have more suppliers but are less likely to transfer technology to them. Chinese firms are more likely to transfer managerial skills than non-Chinese firms in Ghana though not in Ethiopia. Also, there is little evidence that foreign firms transfer technology via horizontal or backward spillovers in either countries. Finally, Chinese firms are much more likely to receive host country policy support than other foreign firms in Ghana but not in Ethiopia.
Topic:
Science and Technology, Foreign Direct Investment, Economy, and Technological Transfer
Political Geography:
Africa, China, Ethiopia, and Ghana

153. New Trade Models, Same Old Emissions?

Author:
Robin Sogalla, Joschka Wanner, and Yuta Watabe
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper investigates the elusive role of productivity heterogeneity in new trade models in the trade and environment nexus. We contrast the Eaton-Kortum and the Melitz models with firm heterogeneity to the Armington and Krugman models without heterogeneity. We show that if firms have a constant emission share in terms of sales — as they do in a wide range of trade and environment models — the three models’ emission predictions exactly coincide. Conversely, if firms have a constant emission intensity per quantity — a prominent alternative in the literature — the emission equivalence between the three models breaks. We provide a generalization that nests both constant emission shares in sales and constant quantity emission intensities as special cases. We calibrate the models to global production and trade data and use German firm-level data to estimate the key elasticity of how emission intensity changes with productivity. Our multi-industry quantification demonstrates that the role of firm heterogeneity depends both on the model and the estimated parameters. Moving from the Armington model to the EK model increases the emissions effect on trade, while moving from the Krugman model to the Melitz model decreases the emission effects on trade.
Topic:
Climate Change, Globalization, International Trade and Finance, Carbon Emissions, and Sustainable Development
Political Geography:
Global Focus

154. The Motives for Chinese and Western Countries’ Sovereign Lending to Africa

Author:
Eckhardt Bode
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper is one of the first to show systematically that the motives for sovereign lending to African countries differed considerably between China and Western countries during the last two decades. While Chinese lending mainly served its own economic or geopolitical objectives, which is well-known from the existing literature, Western countries’ lending also pursued objectives that appear to be at odds with their self-interests but whose precise nature is not yet well-understood. Using a new, da-taset on loans from China, Western countries and multilateral organizations to African countries, I empirically examine a broad variety of potential motives, aim at separating the motives pursued by the national governments from those pursued by their lending agencies, and employ an estimation strategy with increasingly complex fixed effects that yields additional interesting insights into the specificities of the motives.
Topic:
Economics, Emerging Markets, International Trade and Finance, Financial Crisis, Geopolitics, and Sovereign Lending
Political Geography:
Africa, China, and Global West

155. Sovereign Haircuts: 200 Years of Creditor Losses

Author:
Clemens M. Graf von Luckner, Josefin Meyer, Carmen M. Reinhart, and Christoph Trebesch
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We study sovereign external debt crises over the past 200 years, with a focus on creditor losses, or "haircuts". Our sample covers 327 sovereign debt restructurings with external private creditors over 205 default spells since 1815. Creditor losses vary widely (from none to 100%), but the statistical distribution has remained remarkably stable over two centuries, with an average haircut of around 45 percent. The data also reveal that “serial restructurings”, meaning two or more debt exchanges in the same default spell, are on the rise. To account for this trend toward serial renegotiation, we introduce the “Bulow-Rogoff haircut” – a cumulative measure that captures the combined creditor loss across all restructurings during a single debt crisis. Using this measure, we show that longer debt crises deliver larger haircuts and that interim restructurings provide limited debt relief. We further examine past predictors of the size of haircuts and identify “rules of thumb” applicable to future defaults. Poorer countries, first-time debt issuers, and those that borrowed heavily from external creditors all record significantly higher haircuts in case of a default. Geopolitical shocks – such as wars, revolutions, or the break-up of empires – deliver the deepest haircuts. Sovereign debt investment disasters are often linked to (geo-)political disasters.
Topic:
Monetary Policy, Financial Crisis, Geopolitics, Credit, Sovereign Debt, Emerging Economies, Debt Restructuring, and Sovereign Default
Political Geography:
Global Focus

156. International investment income: patterns, drivers, and heterogeneous sensitivities

Author:
Giovanni Donato and Cedric Tille
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Financial globalization has led to a large increase in international asset holdings. While the rise of associated dividend and interest flows has until now been muted by the decreasing trend in interest rates, this pattern could change, leading to a larger role of investment income flows in the balance of payments. We use a broad sample of countries to document the heterogeneous evolution of the various components of investment income flows, with a rising role of FDI and equity income, especially in advanced economies. We then assess the impact of various variables on yields with a panel analysis. Various drivers have highly heterogeneous effects across investment categories and country groups, often impacting the yields on both assets and liabilities. This translates into substantial heterogeneity in the response of countries’ income balance, due to different compositions of asset and liabilities. This heterogeneity is amplified if we consider country-specific estimates in complement to the panel ones. Focusing on the impact of changes in interest rates, we find that higher rates only had a limited impact in the 2013 taper tantrum, investment income balances are likely to benefit from higher US rates in the current phase of higher rates, with offsetting effects of higher domestic rates.
Topic:
International Trade and Finance, Foreign Direct Investment, Financial Markets, Investment, Interest Rates, and Financial Integration
Political Geography:
Global Focus

157. Optimal Investments in Africa’s Road Network

Author:
Sebastian Krantz
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper characterizes economically optimal investments into Africa's road network in partial and general equilibrium - based on a detailed topography of the network, road construction costs, frictions in cross-border trading, and economic geography. Drawing from data on 144 million trans-continental routes, it first assesses local and global network efficiency and market access. It then derives a large network connecting 447 cities and 52 ports along the fastest routes, devises an algorithm to propose new links, analyzes the quality of existing links, and estimates link-level construction/upgrading costs. Subsequently, it computes market-access-maximizing investments in partial equilibrium and conducts cost-benefit analysis for individual links and several investment packages. Using a spatial economic model and global optimization over the space of networks, it finally elicits welfare-maximizing investments in spatial equilibrium. Findings imply that cross-border frictions and trade elasticities significantly shape optimal road investments. Reducing frictions yields the greatest benefits, followed by road upgrades and new construction. Sequencing matters, as reduced frictions generally increase investment returns. Returns to upgrading key links are large, even under frictions.
Topic:
Emerging Markets, Globalization, International Trade and Finance, Infrastructure, Economic Growth, Investment, and Roads
Political Geography:
Africa

158. Beyond Borders: Do Gender Norms and Institutions Affect Female Businesses?

Author:
Holger Görg and Ina C. Jäkel
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
In this paper, we investigate whether gender norms and institutions act as a constraint to the performance of female businesses. We exploit novel and unique micro data on start-ups in Denmark, which we combine with information on individual-level characteristics of the entrepreneur as main decision maker of the firm. We overcome the challenge of disentangling norms and institutional biases against women from other constraints and hurdles that female businesses might face by exploiting detailed trade data. In this trade context, we study the relative performance of firms across markets with varying institutions, while controlling for other factors that affect female businesses uniformly across all markets. We provide evidence that gender inequality and institutional biases against women in trade partner countries play an important role in explaining gender differences in export and import behaviour. We also perform an event study of a concrete policy change in a destination market – the introduction of quotas for the share of females on the boards of directors in Norway – and how it has affected the gender gap in trade participation.
Topic:
Globalization, International Trade and Finance, Inequality, Startup, Gender, Opportunity, and Firm Internationalization
Political Geography:
Global Focus

159. Urbanized and Savvy – Which African Firms are Making the Most of Mobile Money?

Author:
Charles Ackah, Aoife Hanley, Lars Hecker, and Michael Kodom
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Our analysis of over 500 Ghanaian firms sheds light, for the first time, on how certain firms managed to extract value from mobile money. Our regressions point to the usefulness of this form of cashless payments in stabilizing sales during the COVID pandemic. Perhaps the most important message from our analysis is the recognition that the benefits from mobile money extend beyond its purpose as a tool for transacting cashless payments. We reveal that firms using these additional tools supported by MoMo (e.g. for planning or saving purposes) report higher sales resilience, all things equal. Our findings appear to echo the literature on private householders (e.g. Jack and Suri, 2014). However, while the latter report a positive effect due to remittances, our finding is more likely driven by enhanced ability of businesses to streamline their planning and sales.
Topic:
Emerging Markets, Globalization, Urbanization, Money, Innovation, and Digitalization
Political Geography:
Africa

160. The EU and military AI governance: Forging value-based coalitions in an age of strategic competition

Author:
Katja Creutz, Ville Sinkkonen, Mahmoud Javadi, and Michal Onderco
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
The use of Artificial Intelligence (AI) has increased dramatically, driving discussion on the best way to govern it. While much of the discussion has focused on AI in the civilian domain, its usage in military applications raises distinct ethical and legal questions that actors increasingly seek to address. Governance initiatives are becoming more common, even though strategic competition between major powers remains a challenge. The EU navigates this governance landscape more hesitantly than in the civilian domain with its Artificial Intelligence Act (AIA). More information is needed regarding what kind of regulation, and especially with whom the Union could pursue such avenues. This paper seeks to address these questions by presenting and analyzing results from an expert survey conducted in autumn 2023 by researchers at Erasmus University Rotterdam. It argues that the EU needs to pursue a broad range of cooperation formats to advance its values and interests in the context of military AI. Strategic multilateralism is needed, especially with like-minded states that share values with the Union.
Topic:
Science and Technology, Governance, European Union, Artificial Intelligence, and Strategic Competition
Political Geography:
Europe

161. The EU’s accidental geopolitics: Europe’s geopolitical adaptation and its limits

Author:
Niklas Helwig
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
This Working Paper develops the idea that the EU is engaged in accidental geopolitics. There is a lack of consensus among EU institutions and members on the extent of the EU’s geopolitical role. The Union’s structures and strategic culture do not reflect a focus on geostrategy and power. Instead, the environment of strategic competition has pushed the EU to act in geopolitical ways, for example through the financing of military aid or the imposition of sanctions. The paper argues that these actions have been accidental rather than intentional. To substantiate this argument, the paper draws on an analysis of several key foreign and security policy developments during the EU’s outgoing institutional cycle (2019–2024). The analysis reveals the EU’s shortcomings in becoming an intentional geopolitical actor, and highlights the role of foreign policy agents within the Union in driving decisions. Accidental geopolitics and the reactive deployment of the EU’s international leverage underline the impact of the Union’s top jobs on its role in international politics.
Topic:
Foreign Policy, European Union, Geopolitics, and Adaptation
Political Geography:
Europe

162. Addressing the impacts of climate change in Africa: New urgency for international action

Author:
Maija Salonen and Antto Vihma
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
The drought in the Horn of Africa in 2020–2023 and the floods in Libya in September 2023 are recent examples of climate change-induced disasters that were exacerbated by a lack of adaptive capacity. In the Horn of Africa, up to 2.7 million people were displaced by extreme weather events, and the catastrophic floods in Derna, Libya, killed approximately 11,000 people. In addition to the direct impacts, there is a need to understand the cascading impacts of climate change, which are likely to increasingly affect societal security. At present, the risks are growing faster than societal preparedness. The EU should raise political awareness of climate disasters and their cascading impacts. The ground needs to be prepared for decisive and ambitious climate change mitigation, and developed countries should offer continuous support for adaptation and capacity building.
Topic:
Security, Climate Change, Natural Disasters, European Union, and Climate Governance
Political Geography:
Africa

163. From Gallipoli to Gaza: How Pan-Islamism Took Over Turkey’s Secular Education System

Author:
Hay Ertan Cohen Yanarocak
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In the latest issue of Turkeyscope, Dr. Hay Eytan Cohen Yanarocak analyzes new educational initiatives led by the ruling AKP, including a recent pro-Palestinian classroom activity that links the ongoing conflict with Hamas in Gaza to the Ottoman defense of Gallipoli during the First World War.
Topic:
Education, History, AKP, Ottoman Empire, 2023 Gaza War, and Gallipoli
Political Geography:
Turkey, Middle East, Israel, and Palestine

164. Erdoğan and Asad’s Slow Rapprochement: Too Weak to Make a Deal

Author:
Joel Parker
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In our latest edition of Turkeyscope, Joel Parker discusses the chances of a rapprochement between Turkey and Syria. He argues that the Syrian regime will not accept full normalization without an end to Turkish military presence in northeastern Syria, which is unlikely to happen.
Topic:
Foreign Policy, Bilateral Relations, Syrian War, Recep Tayyip Erdoğan, Normalization, Rapprochement, and Bashar al-Assad
Political Geography:
Turkey, Middle East, and Syria

165. The Seesaw Relationship between Turkey and Israel

Author:
Selin Nasi
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In our latest issue of Turkeyscope, Dr. Selin Nasi discusses how Erdogan has limited Turkey's relevance to the Israeli-Palestinian conflict by openly supporting Hamas in recent months.
Topic:
Bilateral Relations, Recep Tayyip Erdoğan, Hamas, and 2023 Gaza War
Political Geography:
Turkey, Middle East, Israel, and Palestine

166. Comparing Israeli-Turkish Relations: The 1990s versus post-October 7

Author:
Jonathan Ghariani
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In our latest issue of Turkeyscope Dr. Jonathan Ghariani analyzes the changes in Turkey's approach to Israel since October 7, 2023 in contrast to the pre-Erdogan era led by Necmettin Erbakan.
Topic:
Foreign Policy, Bilateral Relations, Partnerships, October 7, and 2023 Gaza War
Political Geography:
Turkey, Middle East, Israel, and Palestine

167. Antisemitism: The “New Normal” in Turkey

Author:
Betsy Penso
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In our latest issue of Turkeyscope, Adv. Betsy Penso explains how antisemitism has risen in recent months in Turkey since the outbreak of the war in Gaza. From the government to the media and online networks, virulent anti-Israel speech increasingly threatens Turkey's Jewish minority.
Topic:
Minorities, Jewish community, October 7, 2023 Gaza War, and Antisemitism
Political Geography:
Turkey, Middle East, Israel, Palestine, and Gaza

168. Beyond the Battlefields: Practical Strategies to Halving Global Violence in Our Homes, Streets, and Communities

Author:
Center on International Cooperation
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Center on International Cooperation (CIC)
Abstract:
In the report, “Beyond the Battlefields: Practical Strategies to Halving Global Violence in Our Homes, Streets, and Communities,” the Halving Global Violence Task Force at NYU’s Center on International Cooperation (CIC) presents a comprehensive roadmap to cut global violence by half. This pivotal analysis culminates a three-year collaborative effort involving international policymakers, distinguished researchers, field experts, and activists. The report emphasizes that halving global violence is not only a visionary goal but an actionable imperative. It outlines practical, evidence-based strategies to tackle violence across all spheres of society, underscoring the potential for significant economic and societal benefits. By adopting these strategies, the global community can forge a safer, more equitable society for future generations. Key highlights reveal that most violence occurs outside conflict zones, affecting diverse demographics worldwide. It also provides detailed strategies that have proven successful in various global cities, emphasizing low-cost, innovative solutions that can radically reduce violence. It is an essential read for leaders and policymakers committed to fostering international peace and security.
Topic:
Conflict Prevention, Security, International Cooperation, Violence, and Peace
Political Geography:
Global Focus

169. The Liquidity Crisis at the United Nations: How We Got Here and Possible Ways Out

Author:
Eugene Chen
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Center on International Cooperation (CIC)
Abstract:
The United Nations (UN) is suffering from an acute liquidity crisis because its member states have not been paying the assessed contributions required to finance the budgets they have approved. A major part of the problem is the fact that the United States does not pay in full or on time. However, late payments in recent years by China and the closure of several large peacekeeping operations are exacerbating the liquidity challenges. The Secretary-General has proposed several measures to improve the financial position of the organization, but these are stopgap measures at best. The ongoing financial difficulties can only be resolved by member states paying in full and on time but getting there requires understanding the policy decisions and member state dynamics that led us to the current situation and developing recommendations designed around the constraints of the intergovernmental process.
Topic:
United Nations, Budget, Finance, and Liquidity
Political Geography:
China and Global Focus

170. Contemporary Trends in Militarisation

Author:
Institute for Economics and Peace (IEP)
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for Economics & Peace (IEP)
Abstract:
This report provides two new approaches to understand the capabilities of the world’s militaries by country. The first analyses and tracks changes in a range of militarisation indicators. The main finding of this approach is that while military expenditure is rising in absolute terms, as a percentage of GDP it has fallen and is around half of the peaks seen at the height of the Cold War. Concurrently, as military sophistication increases, troop numbers are declining, highlighting a growing reliance on technology. The second approach is the development of a new and original methodology that calculates the military capacity of countries by weighting the generations of their military assets. These capability scores substantially change the ranking of countries when compared to traditional approaches that count just the number of military assets, or compare military expenditure. The US has the highest capability score, well ahead of China, which ranks second. Russia follows China closely in third. Countries such as Iran and North Korea, despite having large fleets of fixed wing planes, drop considerably in the rankings, because their assets represent older technology. These trends occur as the world is at a crossroad with the number of conflicts, 59, at an all-time high since WWII. These conflicts are becoming more internationalised, with 92 countries involved in a conflict beyond their borders, rising competition between the major powers, and more middle level powers also becoming more assertive. Unresolved conflicts are at the highest levels since WWII, opening more opportunity for major conflicts to erupt.
Topic:
Armed Forces, Military Affairs, Conflict, Militarization, and Defense Spending
Political Geography:
Global Focus

171. Regressive income shocks during COVID‑9: Evidence from India

Author:
Amit Basole, Anand Shrivastava, Jay Kulkarni, and Akshit Arora
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
Studies based on the Consumer Pyramids Household Survey (CPHS) in India have shown that the impact of the Covid-19 lockdown on household incomes was progressive in nature - richer households suffered more. But several media reports as well as purposive surveys carried out during the pandemic suggest that the poor suffered more than the rich. We use nationally representative panel data for urban India from the official Periodic Labour Force Survey (PLFS) to show that households that were relatively richer prior to the start of the pandemic suffered relatively less during the lockdown compared to households that were poorer. That is, the shock was regressive in nature. We also confirm that, as per CPHS, richer households did indeed experience higher drops in income than poorer ones. But we show that this progressivity is much less than what prevailed prior to the pandemic. Thus the pandemic either disrupted ongoing progressive income changes or was outright regressive in its impacts.
Topic:
Employment, COVID-19, Lockdown Policies, and Income Distribution
Political Geography:
South Asia and India

172. Exploring the Potential of Minilateralism for the Europe-Mediterranean Partnership

Author:
Roee Kibrik
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
The Mediterranean and Europe, as interconnected regions sharing geographical spaces and proximity, severe challenges, common interests and intertwined goals, present a compelling opportunity to explore minilateralism as a framework for fostering cooperation and developing resilience. This research examines the potential of minilateralism to contribute to the Europe-Mediterranean partnership, highlighting the rationale, objectives, potential areas of focus, and expected outcomes of promoting minilateral frameworks in this context. Two minilateral frameworks will be examined: Israel-Greece-Cyprus and Israel-Morocco-European Union (EU). Based on this examination, the research will discuss particular insights regarding these specific configurations, and general insights regarding characters, opportunities and challenges of minilateralism in the region as a way to foster the Europe-Mediterranean partnership.
Topic:
Regional Cooperation, European Union, Partnerships, Resilience, and Minilateralism
Political Geography:
Europe, Israel, Greece, Morocco, Cyprus, and Mediterranean

173. Europe as a Geopolitical Actor: Reforming the EU’s Narrative in North Africa

Author:
Zine Labidine Ghebouli
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
This paper will examine the gap between the promises and self-perception of the EU and its member states in North Africa, and the realities of implemented policies. It is true that the founding principle of the EU, i.e., to promote peace and prosperity, has never been more pivotal in policy frameworks. However, Europe on the level of both the EU and its member states is confronting complex post-COVID dynamics such as major life changes, further weakening of vulnerable economies, and deeper sociopolitical fractures. Added to this dangerous mix of challenges, the invasion of Ukraine is not only a violation of the latter’s territorial integrity and sovereignty but is also a symptom of an overall weakened security order both in Europe and abroad (De Clerck-Sachsse, 2022). At a time of multiple crises, it is imperative to reassess Europe’s partnerships in North Africa to develop a new narrative that is based on realistic advantages and limitations.
Topic:
Sovereignty, Reform, European Union, Geopolitics, and Russia-Ukraine War
Political Geography:
Europe and North Africa

174. Mask Off: Implications of the EU’s “Geopolitical Awakening” for its Relations with the MENA Region

Author:
Johannes Späth
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
Russia’s invasion of Ukraine has forced European foreign policy-makers to reassess their view of international relations and reconceptualise the European Union (EU)’s approach to it. A broad consensus has emerged that the foreign policy of the EU needs to become more geopolitical. A sentiment echoed and championed by Ursula von der Leyen, who, since assuming the role of President of the European Commission in December 2019, has actively advocated for a more assertive and strategic EU presence on the global stage (Bayer, 2019). The High Representative of the European Union for Foreign Affairs and Security Policy, Josep Borrell, has labelled these developments as “the awakening of geopolitical Europe” (Borrell, 2022). He further insisted that a more geopolitical European outlook on the world should not be temporary but should become the “new normal” (Borrell, 2022). This suggests a fundamental and lasting shift in the EU’s approach to external relations. Given the ambiguity of the term ‘geopolitics’, which has at least five different meanings (Kundani, 2023), many questions about the EU’s new normal remain to be answered: What does a more geopolitical foreign policy entail? What would be the implications of such a new approach regarding the European Neighbourhood, in particular the Middle East and North Africa (MENA) region? And how can such an approach be reconciled with the EU’s liberal principles? This paper aims to assess these questions from a realist perspective. The article proceeds as follows. The first part examines the different conceptualisations of geopolitics and assesses which of them EU policy-makers refer to. The second part examines whether a more geopolitical EU foreign policy towards the MENA region can be seen as a paradigm shift or rather a continuation of existing policies. The third part considers how the “geopolitical awakening” can be reconciled with the EU’s liberal principles. The paper concludes by drawing on the findings to develop concrete recommendations.
Topic:
International Relations, Foreign Policy, European Union, Geopolitics, and Russia-Ukraine War
Political Geography:
Middle East and North Africa

175. Türkiye-EU Relations and the European Political Community in the Aftermath of Russian Invasion: Is the Transactional Turn Here to Stay?

Author:
Başak Alpan
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
Bilateral relations between Türkiye and the European Union (EU) acquired an EU conditionality dimension with the 1999 Helsinki decision, granting the country the EU candidacy status. Nevertheless, especially since the March 2016 EU-Turkey Statement, also known as Türkiye-EU Refugee Deal, what we see is a thorough shift in Türkiye-EU relations from a conditionality perspective to transactionalism, coupled with several domestic and international developments. In the aftermath of the Russian invasion of Ukraine, the significance of geopolitics and the heightened relevance of realpolitik also contributed to a renewed focus on strategic and pragmatic issues, relegating normative concerns to the background within Türkiye-EU relations. All in all, the shift from a conditionality perspective to a security-based logic within the framework of Türkiye-EU relations was mainly determined and characterised by the so-called “transactional turn”. Within this very transactionalist paradigm, both the EU and Türkiye want to pursue their short-term interests at the expense of a long-term principled engagement for some time. The launch of the European Political Community (EPC) on 6 October 2022 with 44 European heads of state and government (including all 27 EU member states as well as Türkiye) also contributed to this transactional tide, which aimed to “emphasise European geopolitical cooperation in light of Russia’s aggression against Ukraine; to remedy enlargement fatigue by providing an additional forum for exchange between EU candidates and member states; as well as create a forum for exchange with non-EU security actors” (Tcherneva, 2023). The EPC’s rather flexible structure and focus on mini-lateralism, which could provide greater freedom for leaders to focus on their immediate concerns, also raises eyebrows about whether the EPC would be attentive enough (and even have the mandate) to safeguard human rights, democracy, and the rule of law (Jurkovic, 2023). In light of these debates, the aims of this paper are twofold. First, it aims to explore how recent transactional initiatives between Türkiye and the EU in general and the EPC initiative in particular have unfolded and have been perceived by the Turkish diplomats and foreign policy experts. This endeavour to understand the Turkish perceptions of Türkiye-EU relations mainly focusing on recent transactionalism between the parties will be explored with a particular focus on three thematic layers, namely the foreign policy, migration and energy through semi-structured interviews with Turkish diplomats and foreign policy experts. The main rationale behind picking up these thematic layers is to identify, analyse and describe better the complex nature of Türkiye-EU relations with a particular focus on these policy fields (namely foreign policy, migration and energy), which recently witnessed the highest intensity of interactions between two parties. Second, the paper discusses the significance of the EPC within this very transactional turn and aims to understand whether the EPC is another repercussion of the increasing transactionalism. The final aim of the paper will be to understand whether the EU foreign policy, on the one hand, and the bilateral Türkiye-EU relations, on the other, would evolve in a completely transactional and security-based manner leaving no room for normativity amidst the current global uncertainties and challenges, as well as bringing together policy recommendations for the future.
Topic:
Foreign Policy, Migration, Bilateral Relations, European Union, and Russia-Ukraine War
Political Geography:
Europe, Turkey, and Middle East

176. Securing European Interests from the Mediterranean to the Persian Gulf: Rethinking EU Strategic Autonomy at Sea

Author:
Jean-Loup Samaan
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
The discussion about the implications of an objective like strategic autonomy has primarily circled around the question, could the Europeans defend themselves against a Russian offensive without US support? (Barrie et al., 2019; Meijer & Brooks, 2021). This scenario is a critical one, especially considering the long-term implications of the Russia-Ukraine war. Nevertheless, it presents a narrow view of European security interests shaped only by challenges from its eastern flank. As a result, the debate tends to put an emphasis on the need to invest in European ground and air capabilities for a Cold War-like scenario of military operations on the continent. This paper does not discount the demands of the Russian challenge on Europe’s military posture, but it offers a different perspective by looking at an under-researched topic: the concurrent need to secure European interests in the maritime domain vis-à-vis threats originating from the area going from the Mediterranean to the Strait of Hormuz.
Topic:
Defense Policy, European Union, and Strategic Autonomy
Political Geography:
Europe and Mediterranean

177. The Migration Agreements in Euro-Mediterranean Relations for a Geopolitical Europe

Author:
Ezgi Irgil
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
The discussion about the implications of an objective like strategic autonomy has primarily circled the question, could the Europeans defend themselves against a Russian offensive without US support? (Barrie et al., 2019; Meijer & Brooks, 2021). This scenario is a critical one, especially considering the long-term implications of the Russia-Ukraine war. Nevertheless, it presents a narrow view of European security interests shaped only by challenges from its eastern flank. As a result, the debate tends to emphasize the need to invest in European ground and air capabilities for a Cold War-like scenario of military operations on the continent. This paper does not discount the demands of the Russian challenge on Europe’s military posture, but it offers a different perspective by looking at an under-researched topic: the concurrent need to secure European interests in the maritime domain vis-à-vis threats originating from the area going from the Mediterranean to the Strait of Hormuz.
Topic:
Security, Migration, Geopolitics, and Strategic Autonomy
Political Geography:
Europe and Mediterranean

178. Mapping Fragility – Functions of Wealth and Social Classes in US Household Finance

Author:
Orsola Costantini and Carlo D'Ippoliti
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Which households are more exposed to financial risk and to what extent is their debt systemically relevant? To provide an answer, we advance a new classification of the population, adapted from Fessler and Schürz (2017), based on the type of wealth families own and their sources of income. Then, we investigate data from eleven waves of the Survey of Consumer Finances (SCF), a triennial survey run by the U.S. Federal Reserve, to explore the association of different debt configurations and motives to get into debt with our class distinctions. Our new approach allows us to assess competing hypotheses about debt and financial vulnerability that have so far been analyzed separately in disconnected strands of literature. The results of our study reinforce and qualify the controversial hypothesis that relative poverty and inequality of income and access to services have been important factors explaining household indebtedness and its relationship with economic growth over time.
Topic:
Debt, Poverty, Inequality, Finance, Fragility, and Income Distribution
Political Geography:
North America and United States of America

179. Labor Market Volatility and Worker Financial Wellbeing: An Occupational and Gender Perspective

Author:
Julie Yixia Cai
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
One emerging but underexplored factor that is likely to contribute to group racial earnings disparity is unstable work schedules. This is often detrimental for hourly workers when volatility is frequent, involuntary, or unanticipated. Using data from 2005-2022 monthly Current Population Survey and its panel design, this study follows a group of hourly workers across a four-month period to assess whether labor market volatility relates to their financial well-being, focusing on low-wage care and service occupations as well as female workers and workers of color. The findings are threefold: In general, during economic expansion periods, nonwhite workers often benefit more in terms of wage growth compared to their white counterparts. Second, net of other characteristics, on average, greater volatility is associated with lower earnings, and this is mostly driven by those holding jobs in low-wage service sectors and healthcare support roles. Last, the earnings consequences of volatility vary significantly by the type of low-wage jobs a worker holds and their gender and race, but this is only true when volatility happens in a job. Specifically, when working within the same employment spell, female workers, particularly those of color and those working in low-wage service and care jobs, earn significantly less when facing greater volatility than their male counterparts or those working in non-service, non-care occupations.
Topic:
Economics, Inequality, Finance, Labor Market, and Gender
Political Geography:
Global Focus and United States of America

180. Bagehot’s Classical Money View: A Reconstruction

Author:
Perry Mehrling
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Bagehot is difficult for modern economists to read with understanding, for three reasons. He was a classical economist not neoclassical, his orientation was global not national, and, most importantly, his intellectual formation was as a practicing country banker not an academic. This paper adopts all three perspectives, and uses this frame to reinterpret his mature work, both Lombard Street and the unfinished Economic Studies, as the origin of the key currency tradition which continues as a minority view in modern economics.
Topic:
Globalization, History, Macroeconomics, and Walter Bagehot
Political Geography:
Global Focus

181. Monetary Policy and Illiquidity

Author:
Jan Toporowski
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The discussion of financial stability, and the role of monetary policy, is incoherent because there is very little agreement on what constitutes financial stability (and, by implication, instability) - exchange rate stability, asset price stability, absence of debt default. By implication, there is a gap between the claims of various authors to the general applicability of their respective analyses, and the actual applicability of their conclusions, let alone the usefulness of some of their policy recommendations. The paper argues that the key issue is the regulation of the liquidity of all financial markets, and not just that of the banking system, through the markets for government securities. The paper examines the sources of this liquidity in the financial portfolios of the private sector, and how that liquidity may be managed through the open market operations of central banks and the debt management operations of governments. An implication of this approach is yield curve control and the use of (government) debt management to control the liquidity of the markets. These elements of monetary policy have been neglected in theory and policy since the 1950s.
Topic:
Debt, Economics, Monetary Policy, Banking, and Liquidity
Political Geography:
Global Focus

182. Considering Returns on Federal Investment in the Negotiated “Maximum Fair Price” of Drugs Under the Inflation Reduction Act: an Analysis

Author:
Edward W. Zhou, Paula G. da Silva, Debbie Quijada, and Fred D. Ledley
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Inflation Reduction Act (IRA) of 2022 contained landmark provisions authorizing government to negotiate a “maximum fair price” for selected Medicare Part D drugs considering the manufacturer’s research and development costs, federal support for discovery and development, the extent to which the drugs address unmet medical needs, and other factors. This working paper describes federal investment in the discovery and development of the ten drugs selected for price negotiation in the first year of the IRA as well as the health value created through Medicare Part D spending on these drugs. We identified $11.7 billion in NIH funding for basic or applied research leading to approval of these drugs with median investment costs of $895.4 million/drug. This early public investment provided a median cost savings to industry of $1,485 million/drug, comparable to reported levels of investment by industry. From 2017-2021, Medicare Part D spent $126.4 billion (median $10.7 billion) for these products before rebates. Excluding two products for diabetes, Medicare Part D spending was $97.4 billion and the total health value created was 650,940 QALYs or $67.7 billion (WTP/QALY=$104K) representing a negative residual health value of -$29.7 billion (before rebates). We argue that a negotiated fair price should provide returns on both private and public investments in these products commensurate with the scale and risk of these investments, with the principal return on public sector investments being the residual health value (net price) accruing to those using the product. These empirical data provide a cost basis for negotiating a fair price that rewards early government investments in innovation and provides social value for the public.
Topic:
Economics, Health, Public Health, Pharmaceuticals, and Public Investment
Political Geography:
North America and United States of America

183. Tilting at Windmills: Bernanke and Blanchard’s Obsession with the Wage-Price Spiral

Author:
Servaas Storm
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Bernanke and Blanchard (2023) use a simple dynamic New Keynesian model of wage-price determination to explain the sharp acceleration in U.S. inflation during 2021-2023. They claim their model closely tracks the pandemic-era inflation and they confidently conclude that “… we don’t think that the recent experience justifies throwing out existing models of wage-price dynamics.” This paper argues that this confidence is misplaced. The Bernanke and Blanchard is another failed attempt to salvage establishment macroeconomics after the massive onslaught of adverse inflationary circumstances with which it could evidently not contend. It misrepresents American economic reality, hides distributional issues from view, de-politicizes (monetary and fiscal) policy-making, and sets monetary policymakers up to deliver significantly more monetary tightening than can be justified on the basis of more realistic model analyses.
Topic:
Economics, Monetary Policy, Inflation, Macroeconomics, and Wages
Political Geography:
North America and United States of America

184. The Diffusion of New Technologies

Author:
Aakash Kalyani, Nicholas Bloom, Marcela Carvalho, Tarek A. Hassan, Josh Lerner, and Ahmed Tahoun
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We identify phrases associated with novel technologies using textual analysis of patents, job postings, and earnings calls, enabling us to identify four stylized facts on the diffusion of jobs relating to new technologies. First, the development of economically impactful new technologies is geographically highly concentrated, more so even than overall patenting: 56% of the most economically impactful technologies come from just two U.S. locations, Silicon Valley and the Northeast Corridor. Second, as the technologies mature and the number of related jobs grows, hiring spreads geographically. But this process is very slow, taking around 50 years to disperse fully. Third, while initial hiring in new technologies is highly skill-biased, over time the mean skill level in new positions declines, drawing in an increasing number of lower-skilled workers. Finally, the geographic spread of hiring is slowest for higher-skilled positions, with the locations where new technologies were pioneered remaining the focus for the technology’s high-skill jobs for decades.
Topic:
Development, Economics, Science and Technology, Innovation, and Labor Market
Political Geography:
North America and United States of America

185. Implications of the Inflation Reduction Act for the Biotechnology Industry

Author:
Cody Hyman, Henry Dao, Gregory Vaughan, and Fred D. Ledley
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Inflation Reduction Act of 2022 contains landmark provisions authorizing the government to negotiate the price of selected drugs covered by Medicare Part D. The biopharmaceutical industry has criticized these provisions as a threat to innovation arguing that reducing future revenues could disincentivize equity investment in biotechnology. This research examines the sensitivity of private and public equity investment in the biotechnology industry to drug price indices and market conditions from 2000-2022. The analysis shows that equity financing and valuation in the biotechnology industry were strongly associated with equity market conditions but not indices of either producer or consumer drug prices. These results do not support claims of an association between changing drug prices and the availability of equity capital to emerging biotechnology companies, which currently sponsor the majority of all clinical trials. These results add to evidence that the IRA may not have a negative impact on pharmaceutical innovation.
Topic:
Economics, Health, Inflation, Innovation, Biotechnology, Public Investment, and Inflation Reduction Act
Political Geography:
North America and United States of America

186. Scale and Scope in Early American Business History: The “Fortune 500” of 1812

Author:
Richard Sylla and Robert E. Wright
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Fortune magazine began publishing annual rankings of U.S. corporations by revenue in 1955. Ever since, scholars and forecasters have analyzed changes in the Fortune 500 to help inform their judgments about industry concentration and the relative importance of different sectors of the economy. Unfortunately, earlier data are scarce, especially before the Civil War. Through extensive research we have created a sort of historical “Fortune 500” going back to 1812, ranked by corporate capitalization, which we share here. Numerous insights can be drawn from this dataset, including the historical dominance of the banking and finance sectors and the early importance of manufacturing. Perhaps the larger significance of being able to come up with a Fortune 500 for 1812, though, is the fact that even with a population of only about 7.5 million, U.S. already had more business corporations than any other country, and possibly more than all other countries put together, securing its role as the world’s first “corporation nation.” The ease of incorporating businesses released a lot of entrepreneurial energy that helped to build an ever-expanding economy and by the end of the 19th century, the U.S. would be the world’s largest national economy with tens of thousands of corporations.
Topic:
Economics, History, Business, and Industry
Political Geography:
North America and United States of America

187. Tesla as a Global Competitor: Strategic Control in the EV Transition

Author:
Matt Hopkins and William Lazonick
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
In this paper, we assess the implications of Elon Musk’s strategic control over Tesla, the pioneering company that has become central to the electric vehicle transition. We document how, as Tesla’s CEO for 16 years, Musk has exercised strategic control to direct the transformation of the company from an uncertain startup to a global leader. Now that Tesla is profitable corporate predators (aka hedge-fund activists) may challenge Musk’s strategic control—a possibility of which the CEO is well aware. To retain his control over Tesla as a publicly listed company, Musk depends on holding a sufficient proportion of Tesla’s shares outstanding to possess the voting power to fend off predatory value extractors. In addition to accumulating Tesla shares by investing $291.2 million at early stages of the company’s evolution, Musk has relied upon massive stock-option grants from the Tesla board, under the guise of “compensation”, in 2009, 2012, and 2018, to boost his shareholding and, with it, his voting power. Hence the Delaware Court of Chancery’s decision in January 2024 to rescind Musk’s 2018 stock-option package—by far the largest ever granted to a corporate executive—poses a threat to Musk’s strategic control at Tesla. As the “Technoking” of Tesla strategizes to maintain his control over the company’s decision-making, anyone concerned with the role that Tesla will play in the evolving EV transition should be asking how CEO Musk might use, or abuse, his powerful position.
Topic:
Science and Technology, Economic Competition, Electric Vehicles, Tesla, and Energy Transition
Political Geography:
Global Focus and United States of America

188. Setting Pharmaceutical Drug Prices: What the Medicare Negotiators Need to Know About Innovation and Financialization

Author:
Öner Tulum and William Lazonick
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Mandated by the Inflation Reduction Act of 2022, the U.S. government through the Centers for Medicare and Medicaid Services (CMS) is negotiating with pharmaceutical companies over the “maximum fair price” of ten drugs in wide use by Medicare patients. Over the next few years, the number of drugs whose prices are subject to negotiations will increase. The pharmaceutical companies contend that a “fair” price would be a “value-based price” that enables the companies’ shareholders to capture the value that the drug creates for society. Invoking the dominant “maximizing shareholder value” ideology, the argument for value-based pricing assumes that it is only a pharmaceutical company’s shareholders who make the risky investments that fund drug innovation. Pharmaceutical executives and their lobbyists warn that a lowering of drug prices will reduce investments in new drugs. The purpose of this paper is to enable CMS negotiators to respond to these arguments by showing a) why drug-price regulation is required, given the relation between scale economies in supplying drugs and price inelasticity of drug demand; b) how the pharmaceutical companies with which they are negotiating prices are, in general, not using their profits from unregulated drug prices to fund drug innovation but rather to fund distributions to shareholders in the form of cash dividends and stock buybacks; c) that publicly listed pharmaceutical companies do not typically rely upon investment by shareholders to fund drug innovation; and d) that investment in drug innovation entails “collective and cumulative learning” in foundational and translational research that is both antecedent and external to the investments in clinical research that a pharmaceutical company may make to bring a safe and effective drug to market.
Topic:
Economics, Health, Finance, Innovation, Pharmaceuticals, and Medicare
Political Geography:
North America and United States of America

189. Good Policy or Good Luck? Why Inflation Fell Without a Recession

Author:
Thomas Ferguson and Servaas Storm
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes claims that the Federal Reserve is principally responsible for the decline of inflation in the U.S. We compare several different quantitative approaches. These show that at most the Fed could plausibly claim credit for somewhere between twenty and forty percent of the decline. The paper then examines claims by central bankers and their supporters that a steadfast Fed commitment to keeping inflationary expectations anchored played a key role in the process. The paper shows that it did not. The Fed’s own surveys show that low-income Americans did not believe assurances from the Fed or anyone else that inflation was anchored. Instead, what does explain much of the decline is the simple fact that most workers nowadays cannot protect themselves by bargaining for higher wages. The paper then takes up the obvious question of why steep rises in interest rates have not so far led to big rises in unemployment. We show that recent arguments by Benigno and Eggertson that shifts in vacancy rates can explain this are inconsistent with the evidence. The biggest factor in accounting for the strength in the economy is the continuing importance of the wealth effect in sustaining consumption by the affluent. This arises, as we have emphasized in several papers, from the Fed’s quantitative easing policies. Absent sharp declines in wealth, the continuing importance of this factor is likely to feed service sector inflation in particular.
Topic:
Economics, Monetary Policy, Federal Reserve, Inflation, and Macroeconomics
Political Geography:
North America and United States of America

190. Concentrating Intelligence: Scaling and Market Structure in Artificial Intelligence

Author:
Anton Korinek and Jai Vipra
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper examines the evolving structure and competition dynamics of the rapidly growing market for foundation models, focusing on large language models (LLMs). We describe the technological characteristics that shape the industry and have given rise to fierce competition among the leading players. The paper analyzes the cost structure of foundation models, emphasizing the importance of key inputs such as computational resources, data, and talent, and identifies significant economies of scale and scope that may create a tendency towards greater market concentration in the future. We explore two concerns for competition, the risk of market tipping and the implications of vertical integration, and use our analysis to inform policy remedies to maintain a competitive landscape.
Topic:
Markets, Economy, Business, Innovation, Artificial Intelligence, and Large Language Models (LLMs)
Political Geography:
Global Focus

191. Macroeconomic Modeling in the Anthropocene

Author:
Yannis Dafermos, Andrew McConnell, Maria Nikolaidi, Servaas Storm, and Boyan Yanovski
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Recent years have seen an increasing use of environmental dynamic stochastic general equilibrium (E-DSGE) models for analyzing the macroeconomic effects of the climate crisis. This paper explores to what extent these models are fit for purpose. We identify the limitations of the benchmark E-DSGE framework and explain how these limitations restrict the ability of this framework to meaningfully capture the macroeconomics of the climate crisis. We then explain how the assumptions behind these limitations can be relaxed, but argue that simply relaxing some of these assumptions in isolation is insufficient to address the problem. We therefore call for a broader use of other macroeconomic models, such as ecological stock-flow consistent (E-SFC) and ecological agent-based (E-AB) models, that address these limitations simultaneously. We explain how these models do not suffer from the pitfalls of the E-DSGE framework and outline how they need to improve to increase their usefulness as tools that can inform macroeconomic policy making in the Anthropocene.
Topic:
Climate Change, Environment, Monetary Policy, and Macroeconomics
Political Geography:
Global Focus

192. Hitler and the German Coal Industrialists: Passing the Keys to A Kingdom

Author:
Karsten Heinz Schönbach
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Ever since the publication of Henry Turner’s German Big Business and the Rise of Hitler, most historians in both Germany and the United States have dismissed the idea that support from German major industry played a key role in bringing Hitler to power. This consensus is wrong, as I have shown in a series of works that began with my doctoral dissertation at the Free University of Berlin and now extends to more than ten different works, including two books. These works rely extensively on archival resources that were either inaccessible or only selectively open to earlier researchers. This paper analyzes in detail one of the most crucial episodes in Hitler’s rise to power – one that previous historians, particularly Turner, have profoundly misjudged thanks in part at least to the shortcomings in the documentary sources available to them. This is the history of the political relations between Hitler, the NSDAP leadership, and the German “coal industrialists” in the period from 1926 to 1933 and the key role these firms played in supporting and financing the eventual Nazi triumph.
Topic:
History, Business, Coal, Industry, and Adolf Hitler
Political Geography:
Europe and Germany

193. Synergising DPI and digital commons

Author:
Vy Dang, Aliasger Bootwalla, Eva Maria Lynders, and Wulf Reiners
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Gateway House: Indian Council on Global Relations
Abstract:
Digital Public Infrastructure (DPI) and digital commons have the potential to accelerate achievement of the sustainable development goals. Both India and the European Union recognise this: India is a pioneer in DPI, while the concept of digital commons is gaining better attention within the EU. The partners must now work towards a joint understanding of the core principles that govern digital resources.
Topic:
Infrastructure, European Union, Sustainable Development Goals, and Digital Policy
Political Geography:
Europe, South Asia, and India

194. The Washington Summit: Burden-sharing

Author:
Tony Lawrence
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. In the third brief of the series, Tony Lawrence looks at the perennial question of burden-sharing. The Allies will probably not agree to raise the 2% of GDP spending guideline. But in any case, their focus on this metric hides the real picture of how responsibility for security is shared across the Alliance. The European Allies certainly need to step up in all areas, but they should also consider reframing the burden-sharing discussion.
Topic:
NATO, Defense Spending, Russia-Ukraine War, and Burden Sharing
Political Geography:
Europe and United States of America

195. Lessons from China: How Soon Could Iran Get the Bomb? (Occasional Paper 2404)

Author:
Hui Zhang
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Nonproliferation Policy Education Center
Abstract:
It’s unclear when Iran might get the bomb. In July, Secretary of State Blinken revealed that Iran was only one to two weeks away from producing enough weapons grade uranium for several bombs. The New York Times quoted experts who estimated it would take Iran up to another year to make a missile-deliverable weapon. A conservative estimate would be no more than five months but could be much less. In the attached historical analysis of China’s nuclear weapons program, Hui Zhang pegs the number at three to five weeks, and possibly less. It makes for interesting reading, not only on what China was able to accomplish so quickly sixty years ago, but on what Iran may do.
Topic:
Nuclear Weapons, Weapons, and Nonproliferation
Political Geography:
China and Iran

196. War Game Reveals Chinese Attacks on Communications Could Paralyze Taiwan’s Efforts to Resist

Author:
Henry Sokolski
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Nonproliferation Policy Education Center
Abstract:
Top security analysts have long noted that if China disables Taiwan’s underseas cable and disrupts its microwave, cell and space-based communications systems, Beijing could secure a smokeless victory over the island. Over the last five to 10 years, however, private commercial space-based communications and internet services have grown dramatically in importance. The critical role of Starlink in supporting Ukrainian military operations amply demonstrates this point. This prompts several policy questions: What national security roles should governments require commercial space service providers to play during a security crisis or war? Should governments set minimum standards for cyber and physical hardening for commercial satcom providers to meet in order to be eligible to compete for government contracts? What is the proper response to repeated “accidental” or deniable assaults on commercial and military space systems? To find out, the Nonproliferation Policy Education Center conducted a space war game that focused on a near-term Taiwan-China scenario. It utilized the talents of current and retired officials, congressional staff, and outside experts to play the game. In the game, China cut communications cables, disrupted microwave and cellular services, attacked Taiwan’s electrical supply system locally and jammed its satellite communications. The United States and its space-faring allies acted slowly. Private space service providers were no quicker. Finally, the President of the United States authorized covert cyberattacks against China’s Beidou satellite ground stations. China responded by launching similar cyberattacks on U.S. GPS systems and the U.S., redoubling its attacks against the Beidou system. With U.S. naval forces closing in to disrupt a Chinese naval quarantine of Taiwan, Beijing called for a mutual ceasefire in exchange for bilateral talks to lock Taiwan’s future as a province of China. The U.S., allies and Taiwan rejected this offer, opening the door for further military escalation. In the hot wash, the players discussed three key findings: Washington, its space-faring allies and industry players must clarify how they might backfill Taiwanese communication systems well before China might try to disable them. The US and its allies must address Taiwan’s lack of legal recognition, which leaves it uniquely vulnerable to offensive Chinese space and terrestrial military actions against Taiwan’s communications systems. Washington and its space-faring allies must develop additional military space options with plausible deniability to deter and counter similar Chinese capabilities. The recommendations paired with each of these findings. Taiwan needs to be more vocal about its communications systems’ vulnerabilities and consider developing mechanisms to disable China’s satellites temporarily, in a deniable manner. The United States should lower the classifications associated with its non-kinetic anti-satellite systems and create an operational working group on space security that includes Taiwan.
Topic:
Nuclear Weapons, Communications, Nonproliferation, and War Games
Political Geography:
China and Taiwan

197. Gaming Israeli Nuclear Use: Pandora Unleashed

Author:
Henry Sokolski
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Nonproliferation Policy Education Center
Abstract:
With the continued fighting in Gaza, a nuclear rubicon of sorts has been crossed: Elected Israeli officials — a deputy minister and a ruling party member of Parliament—not only have publicly referenced Israel’s possession of nuclear weapons, but suggested how such weapons might be used to target Gaza. This is unprecedented. More recently, Iran directly attacked an Israeli-manned intelligence outpost in Iraq and publicized a staged missile strike against a mock Israeli air base. Iran also has inched within weeks of making several nuclear weapons and made its military ever more immune to first strikes against its key missile and nuclear facilities. Iran and its proxies also now have long-range, high-precision missiles that can easily reach key Israeli targets. None of these developments is positive. For decades, most security analysts assumed Israel’s undeclared nuclear weapons were only deployed to deter attacks and that Iran would not dare to attack Israel directly. The attached war game report, “Gaming Israeli Nuclear Use: Pandora Unleashed,” directly challenges these assumptions. The game starts in 2027 with Israeli intelligence reporting that Iran is mating nuclear warheads to its long-range missiles. This prompts Israel to ask Washington to collaborate in a conventional military strike against key Iranian nuclear facilities and missile bases. Not wanting to be drawn into a major war with Iran, the United States, however, demurs and instead offers Israel U.S. standoff hypersonic missiles. Several moves later, Israel, isolated and desperate, launches two nuclear strikes against Iran to which Iran replies with a nuclear strike of its own. The game raised several basic questions. Would Israel or Iran conduct further military nuclear operations? Might Israel target Tehran with nuclear weapons? Might Iran target Tel Aviv with nuclear arms? Would Russia or the United States be drawn into the war? These and other unknowns informed the game’s key findings. These included: 1. The strategic uncertainties generated after an Israeli-Iranian nuclear exchange are likely to be at least as fraught as any that might arise before such a clash. 2. Although Israel and Iran might initially avoid the nuclear targeting of innocents, such self-restraint is tenuous. 3. Multilateral support for Israeli security may be essential to deter Israeli nuclear use but will likely hinge on Israeli willingness to discuss regional denuclearization. 4. Little progress is likely in reducing Middle Eastern nuclear threats if the United States continues its public policy of denying knowledge of Israeli nuclear weapons.
Topic:
Nuclear Weapons, Weapons, Nonproliferation, and War Games
Political Geography:
Iran, Middle East, Israel, Palestine, and Gaza

198. Populist Neo-Nationalism: The Example of Austria

Author:
Maria Marczewska-Rytko
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Polish Political Science Association (PPSA)
Abstract:
This article aims to analyze the phenomenon of populist neo-nationalism in Austria and answer the following research questions: 1. How can populism and its type of populist neo-nationalism be characterized?; 2. What are the determinants of populist neonationalism in Austria? 3. What are the ways populist neo-nationalism has been utilized in Austria? The Chantal Mouffe thesis was verified, according to which the development of populism is a response to the shortcomings of liberal and deliberative democracies. The research process used a methodology typical of the social sciences, especially the political sciences. Since the 1980s, we have addressed the growing importance of radical right-wing populism in European politics. Some researchers refer to this phenomenon as new populism or populist neo-nationalism. The party’s growing importance since 1986 was related, among other things, to the principles of Euroscepticism it proclaimed and its demands to limit or even ban immigration. The FPÖ’s achieved the most tremendous success under the government of Jörg Haider. Its entry into the ruling coalition has confused international relations.
Topic:
Nationalism, Populism, and Neo-Nationalism
Political Geography:
Europe and Austria

199. Nuclear Verification’s Holy Grail: Verifying Nuclear Warheads — a new approach

Author:
Miles Pomper, William Moon, Marshall Brown, Ferenc Dalnkoki-Veress, Dan Zhukov, Dick Gullickson, and Yanliang Pan
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Nonproliferation Policy Education Center
Abstract:
This study is the culmination of four years of work to think through what would be required to track and monitor nuclear warheads in a verification process. It first began in 2021, shortly after President Joe Biden of the United States and President Vladimir Putin of Russia extended the New START Treaty until February 2026; the two presidents also announced the launch of bilateral strategic stability talks. This positive moment in the U.S.-Russian relationship, which became almost unimaginable after the 2022 Russian invasion of Ukraine, was the original impetus for the project. It also launched in the aftermath of the U.S. withdrawal from the Treaty Between the United States of America and the Union of Soviet Socialist Republics on the Elimination of Their Intermediate-Range and Shorter-Range Missiles, commonly known as the INF Treaty. The Russians had been violating the Treaty with the production and deployment of the 9M729 missile, also known in NATO parlance as the SSC-8. All NATO allies concurred with the withdrawal, which the United States completed in August 2019. The effort began with two strands of activity. The study team knew that when the United States and Russia decided to return to the negotiating table, the United States would place a high priority on seeking direct limits on warheads. Prior treaties had focused on controlling and eliminating missiles but had not focused directly on the warheads that armed them. It had long been a goal of the United States to seek direct limits on warheads, in order to more accurately constrain a Russian preponderance in warheads designated for theaterand shorter-range systems.1 However, if such an agreement were negotiated, the European allies would be ill-equipped to participate. On-site inspections under the INF Treaty had ended on May 31, 2001, so it had been twenty years since the allies had had to participate in verification activities. Most had lost expertise and institutional memory; some had never participated at all. “Raising the IQ” of the NATO allies about participating in arms control implementation was thus the first strand of activity. The second strand grew up around a conviction in the study team that the well-practiced verification techniques that had been exercised in INF and strategic arms control treaties since the 1980s could be augmented with new technology and innovative techniques. Thus emerged the emphasis on using cryptography to underpin a unique warhead tracking system. This work took advantage of some of the finest experts in the field of cryptography at Stanford University, and also the extensive experience gained during the Defense Threat Reduction Agency’s many years of work to strengthen warhead protection, control and accounting in Russian Ministry of Defense nuclear warhead storage facilities. This work, which spanned a period of over fifteen years from 1995- 2013, provided the study team with a great depth of knowledge about the normal operating procedures in Russian military warhead facilities. This deep knowledge was vital to developing a concept for the tracking system, providing it with a realism and accuracy that otherwise would not have been possible. These two strands of work culminated in 2022 in a significant study, “Everything Counts: Building a Control Regime for Non-Strategic Nuclear Warheads in Europe.”2 However, the team realized that only one element of warhead verification had been touched—the broad outlines of a system for maintaining and exchanging information over the life of an agreement. Other verification elements such as on-site inspections and particular verification technologies had not been considered. They therefore resolved to expand the scope of work to imagine an entire closed system for nuclear warhead verification. With the cryptographic element as its foundation, the team reviewed the extensive experience of treaties, agreements and other activities such as exhibitions and joint experiments that had been built up over the many years of U.S.-Soviet and Russian cooperation on nuclear weapons control. From this, they created a comprehensive menu of measures that could be considered for a future warhead control regime, calibrating the measures according to the level of their intrusiveness.
Topic:
Arms Control and Proliferation, Nuclear Weapons, and Nonproliferation
Political Geography:
Russia and United States of America

200. Generative AI and WMD Nonproliferation: Why Diplomats and Policymakers Need to Pay Attention Now and Develop AI Literacy

Author:
Natasha Bajema
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
James Martin Center for Nonproliferation Studies
Abstract:
The rapid advancement of generative AI (e.g., ChatGPT) has opened a Pandora’s box of opportunities and risks for nuclear, biological, and chemical weapons. A new primer from the James Martin Center for Nonproliferation Studies by Dr. Natasha E. Bajema cuts through the hype to explain what policymakers and diplomats really need to know about generative AI to understand its impact on the WMD domain. While media attention has focused on ChatGPT and other generative AI models potentially helping bad actors develop weapons, the reality for the WMD domain is more nuanced. Predictive AI tools are already being deployed in military applications. These narrow, task-specific systems can analyze data patterns to support decision-making, but also introduce new risks through cyber vulnerabilities and data biases. Meanwhile, current generative AI models still struggle with accuracy and reliability—they are prone to making up false information and are not yet capable of transferring the tacit knowledge needed for weapons development. However, this could change as the technology advances.
Topic:
Science and Technology, Weapons of Mass Destruction, Nonproliferation, Artificial Intelligence, and Generative Models
Political Geography:
Global Focus