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Begin New Search Topic Development Content Type Working Paper

1. The Implications of Financial Development for Economic Growth in CEMAC

Author:
Jean-Cedric Kouam
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
In recent years, the Economic and Monetary Community of Central Africa (CEMAC) has experienced sluggish economic growth. This has fallen from 4.86% in 2010 to 0.04% in 2021 (World Bank, 2021), a drop of 4.82 percentage points in a decade. In addition to the high vulnerability of economies to exogenous shocks, several economists such as Asteriou & Spanos (2019) attribute the slowdown in growth to the underdevelopment of the financial sector. In CEMAC, the access of populations to mobile money or commercial bank deposit services has undoubtedly become insufficient to keep economies on a sustainable and inclusive growth path. This article reviews the evolution of financial development indicators in the CEMAC zone since 2013, and its impact on the performance of states in terms of economic growth. We use secondary data collected from the World Bank and the Bank of Central African States (BEAC), between 2013 and 2021. The analysis provides public authorities in CEMAC with arguments to promote financial development in the sub-region to boost economic growth, and better take advantage of the opportunities of the African Continental Free Trade Area (AfCFTA). The paper is structured in two sections. Section 1 presents the evolution of financial development indicators in CEMAC and section 2, the implications for economic growth and sustainable development.
Topic:
Development, Regional Cooperation, Finance, Economic Growth, and CEMAC (Central African Economic and Monetary Community)
Political Geography:
Africa and Central Africa

2. Financial Autonomy of Decentralized Local Authorities and Local Development

Author:
Herve Ondoua, Bin Meh, Boris Andzanga Ndzana, and Jean-Cedric Kouam
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The financial autonomy of Decentralized Territorial Collectivities (DTCs) is today considered as the foundation of local governance. It confers decision-making power in financial matters to municipalities and regions, as well as a certain level of independence in the management of the resources at their disposal. In Cameroon, the general principles of financial autonomy are defined in the law on the General Code of DTCs, in particular in the Fifth Book, which repeals the law establishing the financial regime of local authorities and that on the financial regime of the State. Thus, financial autonomy should enable DTCs to develop by using their own resources in improving the living conditions of their populations. Despite these powers, DTCs still depend for the most part on income from municipal taxes and income transferred by the State. However, DTCs in Cameroon have real economic and financial potential but not a degree of financial autonomy that would allow them to accelerate the development of their locality. This reflection is aimed at local elected officials, political authorities, government authorities and civil society, with the aim of examining the effectiveness of financial autonomy in the face of the economic and financial potential of DTCs and their ability to implement their own local development projects. This article relates financial autonomy and local governance, on the one hand, and shows how financial autonomy is a factor of valorization of local resources, on the other hand.
Topic:
Development, Government, Finance, Local, Decentralization, and Autonomy
Political Geography:
Africa and Cameroon

3. Who Learns More from Afar? Spatial Empirical Evidence on Manufacturing and Services

Author:
Nina Vujanović
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper investigates spatial dependence of FDI knowledge spillovers in manufacturing and services using spatial panel techniques applied to the 2006-2014 Bureau Van Dijk’s Amadeus firm-level dataset for Croatia and Slovenia. The paper finds diverse results across the two sectors. The distance between regions does not hinder the absorption of foreign knowledge in manufacturing despite the strong market-stealing effects operating within regions as well as spatially. On the other hand, FDI knowledge spillovers decrease service productivity within regions, because of market-stealing effects operating strongly across a smaller geographical scale. However, its impact is lost as knowledge spillovers from more distant neighbours are accounted for, because the poaching of local labour is impeded by distance due to rising costs of labour mobility. The research indicates that for knowledge absorption, geographic distance plays differing roles in manufacturing and services, due to the different nature of the production process.
Topic:
Development, International Trade and Finance, Foreign Direct Investment, Manufacturing, Econometrics, and Competition
Political Geography:
Europe, Croatia, and Slovenia

4. Iraq’s Quest for a Social Contract: An Approach to Promoting Social Cohesion and State Resilience

Author:
Wolfgang Mühlberger
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This study sets out to examine state-society relations in Iraq through the conceptual lens of the social contract and also provides a starting point for deriving potential areas of activity for external actors, such as German development cooperation (DC) and technical cooperation (TC). These players could provide support for the re-negotiation of this fraught mesh of relationships. This analysis is founded on a concept of the social contract in which the relationship between the government and those it governs is viewed primarily as a process of negotiation and can be operationalised, for instance, on the basis of the three Ps (participation, provision and protection). As such, the concept is informed both by contemporary approaches and by traditional reflections of French and Anglo-Saxon thinkers, who focus on the restriction of individual freedoms in return for the provision of legal certainty by the state. This study is divided into three sections. The first section explores weak statehood and the breakdown of society in the heuristic context of the social contract. The role of external actors in Iraq’s post-2003 development is then examined in the next section, which takes a closer look at the political system of proportional representation and its socio-political implications. Finally, the third section synthesises the first two by considering how external actors from the development cooperation sector might contribute to the peaceful negotiation of Iraq’s dysfunctional social contract. These reflections are made against the systemic backdrop of a rentier state with a hybrid form of governance and take account of the extremely fragile government-society relationship on the one hand, and external interventions, which have largely failed to date, on the other. In this context, the shortcomings of the largely dysfunctional Iraqi social contract become apparent and at the same time provide starting points for its improvement and renegotiation.
Topic:
Development, Social Cohesion, Social Contract, Resilience, and Cooperation
Political Geography:
Iraq, Middle East, and Germany

5. The Future of EU Blended Finance and Guarantees: An Assessment of Cooperation Strategies with Least Developed Countries in Africa

Author:
Erik Lundsgaarde
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The European Fund for Sustainable Development Plus (EFSD+) is a core element of EU development cooperation and reflects the EU’s strong commitment to deploying blended finance and guarantees as development financing tools. This discussion paper examines the EU’s intentions concerning how the EFSD+ will be integrated into geographic programmes, focussing on the least developed countries (LDCs) in Africa. Based on a review of the Multiannual Indicative Programmes (MIPs) for 30 African LDCs as well as the regional MIP for Sub-Saharan Africa covering the period 2021-2027, the paper provides an overview of funding reserved for EFSD+ implementation in geographic programmes, identifies the expected EFSD+ sectoral priorities and summarises references to development finance institutions (DFIs) as EFSD+ implementation partners. This descriptive review highlights issues for the future monitoring and assessment of the EFSD+. The paper points to uncertainty about the magnitude of the management challenge that EU institutions face in EFSD+ implementation given the difficulties of predicting the scale of guarantee-backed operations in individual countries, the lack of information on the expected volume of blended finance operations, and the limited analysis of how EFSD+ tools relate to other EU funding approaches. The paper also notes that EU institutions should be more explicit about the criteria shaping EFSD+ resource commitments to clarify relevant prerequisites for the effective deployment of EFSD+ tools. Finally, the broad thematic scope for EFSD+ use implies that knowledge about how blended finance and guarantees function and how the financing approaches interact with other interventions needs to increase throughout the EU system.
Topic:
Development, European Union, Finance, Sustainability, and Cooperation
Political Geography:
Africa and Europe

6. The Politics of “What Works”: Evidence Incentives and Entrepreneurship in Development Organisations

Author:
Pablo Yanguas
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Over the last two decades, national development agencies have committed to results-based approaches and to putting evidence at the centre of their decision-making. For evidence “optimists”, this is a much-needed corrective to past practice; in contrast, “pessimists” worry about ideology masquerading as science, and results-based approaches contributing to the further depoliticisation of development. This paper argues that reality falls somewhere in between these two extreme interpretations, and that the experiences of development organisations are varied enough to warrant further interrogation, not into whether evidence shapes policymaking, but into how it does so, and whose evidence matters most. The paper seeks to address these questions through an analytical framework that highlights the process of contestation between evidence agendas against a backdrop of policy complexity, professional barriers, and organisational incentives. A brief review of evidence from development cooperation agencies – with spotlight cases from Germany, Spain and the United Kingdom – reveals that institutionalisation and entrepreneurship play a critical role in enabling and shaping evidence-based policymaking. This leads to clear implications for practitioners, whose focus should be not only on getting the right kind of evidence, but on getting the politics of evidence right.
Topic:
Development, Entrepreneurship, and Incentives
Political Geography:
United Kingdom, Germany, and Spain

7. (R)evolution? Exploring the Potential of Post-Development Approaches for Reforming Development Cooperation

Author:
Patrick Köllner
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The concept and mainstream approaches of development cooperation (DC) have been criticised since the early beginning of their existence. Post-development (PD) scholars have been criticising international DC since 1990 for both its Western perspective and the lack of reflection on asymmetrical power structures. Since also today DC has to face a variety of criticisms, we perceive PD approaches as a starting point for efforts towards change. We asked (1) to what extent and how elements of post-development approaches are reflected in the current policy initiatives of international DC, and (2) what potential do PD approaches have to reform DC. We analysed three examples: German feminist development policy (FemDP) as a relatively new idea of transformation, the locally led development approach as a long-standing concept and Global Public Investment (GPI) as an approach towards a new concept of international cooperation. By means of a content analysis, four commonly used PD elements were selected and slightly adapted to examine whether and how the three policy initiatives acknowledge PD aspects in order to reform DC: (1) the concept of alternatives to development, (2) pluralism of knowledge and power dynamics, (3) user-centred approaches and a critical stance towards the established scientific discourse and (4) the promotion of grassroots movements and local ownership. We discovered a variation in the use of the different PD elements. Although aspects related to power relations, post-colonial structures and knowledge management are prominent in all three initiatives, elements such as grassroots movements are given less consideration in all three cases. Even though FemDP does not focus on an alternative to development, as defined by PD approaches, it puts a strong emphasis on a transformative approach when it comes to its user-centred empowerment and tackles power imbalances by approaching decolonisation. Subsequently, the efforts of German Development Minister Svenja Schulze do not just describe a rhetorical reorientation but involve actual transformative efforts. However, further implementation efforts need to be analysed. The locally led development approach seems to be a suitable springboard for the inclusion of local knowledge and grassroots movements. Whereas the approach mostly uses descriptions of change as a means to reach its objectives, the GPI concept in particular uses PD elements as a reformative approach, as per the PD definition, putting the objective of the transformation of international public finance in international cooperation at its centre. Valuing PD approaches, we conclude that they do influence public initiatives in one way or another. In the future, if inner-systemic change should become an option, we see the greatest added value when PD scholars succeed in underpinning their approaches with instruments that can be used as tools in DC practice.
Topic:
Development, Public Investment, and Cooperation
Political Geography:
Germany and Global Focus

8. Tax Expenditures in OECD Countries: Findings from the Global Tax Expenditures Database

Author:
Martin Beznoska
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The Global Tax Expenditures Database (https://GTED.net/) collects national reports on tax expenditures for 101 countries for the period from 1990 to the present. Based on these data, the development of tax expenditures in the 38 OECD countries between 1999 and today is examined. A look at the data shows that even in countries with high GDP and comprehensive tax coverage, reporting is often incomplete. For a subset of 16 OECD countries for which (relatively) continuous reporting over the period is available, we look at the development of tax benefits for households and firms. We can show that data availability improves over time. For the development of business tax expenditures, a weakly significant positive trend can be identified in terms of tax revenues foregone, driven mainly by the Netherlands and Ireland. Both countries are known for wanting to strengthen their business location through generous tax expenditures for businesses. Tax expenditures for private households, which are on average higher than the level of tax expenditures for businesses in the countries under review, do not show any significant time trend, even though they were increasingly used to relieve the burden on private households and businesses during the financial crisis of 2008/09. In order to compare tax expenditures between countries and to better assess their effectiveness, regular reporting at the national level, transparent definitions and ideally uniform standards would be helpful. Regular monitoring by a commission of experts could contribute to the consistency and comparability.
Topic:
Development, Business, Tax Systems, and OECD
Political Geography:
Global Focus

9. Nigeria’s 2023 Election: Democratic Development and Political Fragmentation

Author:
Sa'eed Husaini
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Nigerians will go to the polls on February 25 to elect a new president and members of the National Assembly. This marks the 7th in an unbroken sequence of presidential elections held since the country’s return to democracy in 1999. With President Muhammadu Buhari unable to compete in the election having served two full terms, the unpopular ruling All Progressives Congress (APC) party will face a formidable challenge, not only from its traditional rival, the People’s Democratic Party (PDP), but also from an unprecedented ‘third party’ challenger – a previously marginal but now surging Labour Party. This paper analyzes Nigeria’s 2023 election not only in the context of this unique partisan configuration, but also considering the wider set of factors that will, in all probability, influence the organization and the outcome of the election. These factors include the preparedness of the Independent National Electoral Commission and especially its capacity to properly deploy its newly acquired biometric and result transmission technologies. In addition, the analysis explores the ways in which the voting process and result will also reflect the limitations and risks imposed by Nigeria’s current climate of chronic insecurity, resulting from active armed militia and criminal groups operating across nearly all regions, but particularly in the Northeast, Southeast, and South-south. Insecurity has likewise coincided with rising elite polarization and the breakdown of the “zoning’ consensus ahead of the election, elevating the importance of identitarian political rhetoric in the campaigns. While insecurity appears likely to contribute to the trend of declining voter turnouts observed in previous elections, the apparent increase in political interest, particularly among young voters, as reflected in the spike in the collection of voters cards ahead of the election might mark a countervailing trend. Against this backdrop, the paper also considers the major parties, candidates, their political projects as well as their target constituencies. It finds that the parties articulated moderately divergent emphases while remaining largely consonant on the contentious economic questions of the period. It also considers possible elections scenarios that may result from the varying institutional and political characteristics of the main parties. Ultimately, it finds that the 2023 poll will represent the continued evolution of Nigerian electoral institutions and political participation in a context of lingering social division and insecurity.
Topic:
Development, Democracy, Political Parties, Presidential Elections, and Fragmentation
Political Geography:
Africa and Nigeria

10. Japan and the Pacific Islands Countries. Longstanding Strategic Interests, Recent Strategic Engagement

Author:
Celine Pajon
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Institut français des relations internationales (IFRI)
Abstract:
Japan has recently stepped up its engagement with the Pacific Island Countries (PICs), building on its historical ties and strategic interests in the region. The wealth of these territories in fishery resources and raw materials, the crucial importance of the maritime routes, and the strategic geographical location of PICs in the context of Sino-American rivalry have been key factors behind Tokyo's expanding engagement. Despite these strategic interests, the cooperation with the PICs in the postwar era up until the emergence of the Indo-Pacific narrative has been quite fragmented, reflecting the rather low priority given to the region, the multiplicity of the objectives pursued, and the diversity of engaged actors. Nevertheless, the Japan-Pacific Islands Leaders Meeting (PALM) process initiated in 1997 provided an innovative multilateral framework to coordinate with the Pacific Islands Forum (PIF) over economic cooperation, improve Japan’s communications and iron out tensions, starting with nuclear. The incorporation of the PICs into Japan’s Free and Open Indo-Pacific (FOIP) vision cements their position in Tokyo’s efforts to preserve a rules-based international order and counterbalance China’s growing influence. Security issues of Asia have thus started to appear on the agenda of the PALM Summits. In addition, Japan has stepped up its cooperation with its closest allies and partners – the US and Australia – as part of the operationalization of a FOIP in Oceania. Finally, a major provider of development aid, Tokyo has also become a diplomatic and security partner for the Pacific Islands. Japan has stepped up naval diplomacy and defense dialogues in the region, in addition to being very active in maritime capacity-building, as well as humanitarian aid and disaster relief assistance. Despite the rise of Japanese cooperation, which is now truly multidimensional and strategic, Tokyo's ability to influence the Pacific islands and in particular to counterbalance China remains to be seen. Indeed, the PICs feel little concerned by major geopolitical projects and are careful not to create enemies. With the US and its other partners increasing their presence in the area, there is a strong impetus for Japan to reinvest in the Pacific. However, Tokyo has yet to develop a formal strategy or vision for the region. This could be announced at the next PALM summit in 2024, which will mark the 10th iteration of this meeting and could be a significant milestone.
Topic:
Development, Cooperation, and Strategic Engagement
Political Geography:
Japan, Asia, Indo-Pacific, and Pacific Islands