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  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Aspen Institute
  • Abstract: The last 18 months have dealt a devastating blow to Americans' sense of financial security. Few have been untouched by the financial crisis. For many, wealth accumulated over years of saving and investing has disappeared almost overnight. For many more, the economic crisis has imperiled their jobs, their ability to provide for their families, and their optimism about the future.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: United States, America
  • Author: Kenneth Shadlen
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Global Development and Environment Institute at Tufts University
  • Abstract: National policies toward intellectual property (IP) were revolutionized in the 1990s, as countries adopted new systems to conform to the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). TRIPS-style IP regimes make patents available for more types of knowledge, grant long periods of patent protection, and endow patent owners with strong rights of exclusion. This paper analyzes two contrasting patterns of political mobilization and pressures for change that newly-introduced, TRIPS-style regimes became subject to by the early 21st Century. Most governments faced pressures to address aspects of their IP systems regarding pharmaceutical patents; governments came under pressure to reform their new patent systems, calling into question the appropriateness and utility of broad and strong private rights of exclusion as tools for disseminating knowledge. Most governments also faced pressures to modify aspects of their patent systems more broadly related to science, technology, and indigenous innovation (STI); governments came under pressure to reinforce their new patent systems, buttressing the role of private rights of exclusion as mechanisms to incentivize the creation and distribution of knowledge and technology. I provide a political explanation for the contrasting trajectories of reform and reinforcement by examining how different policy arrangements generate and mobilize interests for continuity and discontinuity. The focus is on asymmetric patterns of interest mobilization: those actors who benefit from policy interventions tend to mobilize more than those who suffer; those actors who suffer retain the capacities for mobilization and resistance more in the area of health-drugs than STI.
  • Topic: Economics, International Trade and Finance, Political Economy, Intellectual Property/Copyright
  • Political Geography: Latin America
  • Author: Lone Riisgaard
  • Publication Date: 06-2009
  • Content Type: Working Paper
  • Institution: Danish Institute for International Studies
  • Abstract: Sustainability initiatives have proliferated in many industries in recent years. This has led to a plethora of standards that exist in parallel to each other seeking to address more or less the same social and environmental issues. Sustainability standards are not neutral tools but institutional mechanisms that differ in the way they seek to implement their objectives and in the impact they have on intended beneficiaries and other value chain actors. In this paper I explore the emergence of multiple standards seeking to regulate the social conditions in the production of cut flowers aimed at the EU market. I investigate developments in the focus and function of these standards and the effect of standards and standard harmonization attempts on the terms of competition in the cut flower value chain. The analysis shows that the harmonization of flower standards has a potential to 'lift the standard bar' by transforming risk management standards into product differ-entiation standards. The paper also shows how the market for standards can shape competition in the market for flowers by altering the terms of participation in the growing market segment for 'sustainable' flowers. Through the new standard harmonization initiative Fair Flowers Fair Plants, Dutch growers are now able to compete in the market for socially labelled flowers which before was restricted to Southern producers.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: Europe
  • Author: Chen Taifeng
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: The simultaneous emergence of rapidly developing RTAs and a strengthened and more encompassing MTS attracts worldwide attention. “Complementary Competition” is the very essence of the RTA/MTS relationship. Both compete complementarily in trade liberalization and economic integration initiatives. Since joining the WTO, China has pursued a “three-pronged” economic and trade development strategy of pushing forward regional trade cooperation and bilateral trade cooperation while enhancing multilateral trade and cooperation. After joining the WTO, China has basically developed a spatial landscape of “focusing on Asia-Pacific and reaching out globally” with regard to its participation in the RTA.By participating in RTAs, China can obtain the same benefits of market openness and trade and investment liberalization as other countries do. It is important for China not to act too hastily, but to push forward regional cooperation step by step from adjacent to remote regions and level by level, from easy to difficult regions. Asia is especially important to China, and Asian economic cooperation is the foundation of China's RTA policy.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: China, Asia
  • Author: Jaya Prakash Pradhan
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Just over a year ago, outward foreign direct investment (OFDI) from India seemed to be on a path of rapid and sustained growth. Its annual average growth of 98% during 2004–07 had been unprecedented , much ahead of OFDI growth from other emerging markets like China (74%), Malaysia (70%), Russia (53%), and the Republic of Korea (51%), although from a much lower base. Much of this recent growth had been fuelled by large-scale overseas acquisitions, however, and it faltered when the global financial crisis that started in late 2007 made financing acquisitions harder.
  • Topic: Economics, International Political Economy, International Trade and Finance, Markets, Foreign Direct Investment, Financial Crisis
  • Political Geography: Russia, China, South Asia, Malaysia, Korea
  • Author: Michael Mortimore, Carlos Razo
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Despite the current economic crisis, outward foreign direct investment (OFDI) by Latin American and Caribbean enterprises continued its upward trend in 2008 (annex figure 1). OFDI by firms in the region reached nearly USD 35 billion in 2008, an increase of 42% with respect to 2007 (ECLAC, 2009a). However, several of the factors that fostered such growth have recently changed, possibly affecting OF DI prospects for 2009. This Perspective briefly explores these changes and their potential effects on firms' investing behavior, as well as some important countervailing factors that may cushion the effects of the economic crisis on Latin American firms' investment plan.
  • Topic: Development, Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Latin America, Mexico
  • Author: Luís Afonso Lima, Octavio de Barros
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The internationalization of Brazilian companies is a relatively recent phenomenon. From 2000 to 2003, outward foreign direct investment (OFDI) averaged USD 0.7 billion a year. Over the four-year period 2004−2008, this average jumped to nearly USD 14 billion. In 2008, when global FDI inflows were estimated to have fallen by 15%, OFDI from Brazil almost tripled, increasing from just over USD 7 billion in 2007 to nearly USD 21 billion in 2008 (annex figure 1 below). Central Bank data put the current stock of Brazilian OFDI at USD 104 billion, an increase of 89% over 2003. Caution is in order about these figures, however, as in Brazilian outflows it is difficult to separate authentic FDI from purely financial investment under the guise of FDI. According to the most recent data, 887 Brazilian companies have invested abroad
  • Topic: Development, Economics, International Political Economy, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Brazil, Latin America
  • Author: James J. Przystup
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Institute for National Strategic Studies
  • Abstract: From its earliest days, the United States has been engaged in trade with East Asia. In February 1784, the Empress of China left New York harbor, sailing east to China, arriving at Macau on the China coast in August of that year. The ship returned to the United States the following May with a consignment of Chinese goods, which generated a profit of $30,000. In 1844, China granted the United States trading rights in the Treaty of Wanghia.
  • Topic: Economics, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: United States, China, Asia, Australia/Pacific
  • Author: Stuart Harris
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Australian National University Department of International Relations
  • Abstract: Significant interest in Australia's uranium export industry has re-emerged in the face of increased energy demand, fears of eventual reduced supplies of traditional energy sources, further evidence of global climate change and prospective higher electricity prices. This paper examines how Australia will respond to that renewed interest and how it seeks to balance its economic and environmental interests with its traditional nuclear non- proliferation activism.
  • Topic: Economics, Energy Policy, Environment, International Trade and Finance
  • Political Geography: Australia
  • Author: Arvind Subramanian, Aaditya Mattoo
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper documents an unusual and possibly significant phenomenon: the export of skills, embodied in goods, services or capital from poorer to richer countries. We first present a set of stylized facts. Using a measure which combines the sophistication of a country's exports with the average income level of destination countries, we show that the performance of a number of developing countries, notably China, Mexico and South Africa, matches that of much more advanced countries, such as Japan, Spain and USA. Creating a new combined dataset on FDI (covering greenfield investment as well as mergers and acquisitions) we show that flows of FDI to OECD countries from developing countries like Brazil, India, Malaysia and South Africa as a share of their GDP, are as large as flows from countries like Japan, Korea and the US. Then, taking the work of Hausmann et al (2007) as a point of departure, we suggest that it is not just the composition of exports but their destination that matters. In both cross-sectional and panel regressions, with a range of controls, we find that a measure of uphill flows of sophisticated goods is significantly associated with better growth performance. These results suggest the need for a deeper analysis of whether development benefits might derive not from deifying comparative advantage but from defying it.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: United States, Japan, Malaysia, India, South Africa, Brazil, Spain, Korea
  • Author: Sambit Bhattacharyya, Jeffery G. Williamson
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Weatherhead Center for International Affairs, Harvard University
  • Abstract: Even though Australia has experienced frequent and large commodity export price shocks like the Third World, it seems to have dealt with the volatility better. Why? This paper explores Australian terms of trade volatility since 1901. It identifies two major price shock episodes before the recent mining-led boom and bust. It assesses their relative magnitude, their de-industrialization and distributional impact, and policy responses. In what way has Australia been different from other commodity exporters experiencing volatile prices?
  • Topic: Economics, International Trade and Finance
  • Political Geography: Australia/Pacific
  • Author: Jeffrey Frankel
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Weatherhead Center for International Affairs, Harvard University
  • Abstract: Andy Rose (2000), followed by many others, has used the gravity model of bilateral trade on a large data set to estimate the trade effects of monetary unions among small countries. The finding has been large estimates: Trade among members seems to double or triple, that is, to increase by 100-200%. After the advent of EMU in 1999, Micco, Ordoñez and Stein and others used the gravity model on a much smaller data set to estimate the effects of the euro on trade among its members. The estimates tend to be statistically significant, but far smaller in magnitude: on the order of 10-20% during the first four years. What explains the discrepancy? This paper seeks to address two questions. First, do the effects on intra-euroland trade that were estimated in the euro's first four years hold up in the second four years? The answer is yes. Second, and more complicated, what is the reason for the big discrepancy vis-à-vis other currency unions? We investigate three prominent possible explanations for the gap between 15% and 200%. First, lags. The euro is still very young. Second, size. The European countries are much bigger on average than most of those who had formed currency unions in the past. Third, endogeneity of the decision to adopt an institutional currency link. Perhaps the high correlations estimated in earlier studies were spurious, an artifact of reverse causality. We test the hypotheses regarding lags and size directly; and we address the endogeneity problem by means of a natural experiment involving trade between the CFA countries of Africa and the euro countries of Europe. Contrary to expectations, we find little evidence that any of these factors explains a substantial share of the gap, let alone all of it.
  • Topic: International Trade and Finance, Bilateral Relations, Monetary Policy
  • Political Geography: Europe
  • Author: Jeffrey A. Frankel
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Weatherhead Center for International Affairs, Harvard University
  • Abstract: We will likely see increasing efforts to minimize leakage of carbon to non-participating countries and to address concerns on behalf of the competitiveness of carbon-intensive industry. Environmentalists on one side and free traders on the other side fear that border measures such as tariffs or permit-requirements against imports of carbon-intensive products will collide with the WTO. There need not necessarily be a conflict, if the measures are designed sensibly. There are precedents -- the shrimp-turtle case and the Montreal Protocol -- that could justify border measures to avoid undermining the Kyoto Protocol or its successors, if the measures are carefully designed. But if the design is dominated by politics, as is likely, import penalties are likely to run afoul of the WTO, to distort trade, and perhaps even to fail in the goal of preventing leakage.
  • Topic: Climate Change, Environment, International Trade and Finance
  • Political Geography: China
  • Author: Jeffrey G. Williamson, Şevket Pamuk
  • Publication Date: 02-2009
  • Content Type: Working Paper
  • Institution: Weatherhead Center for International Affairs, Harvard University
  • Abstract: India and Britain were much bigger players in the 18th century world market for textiles than was Egypt, the Levant and the core of the Ottoman Empire, but these eastern Mediterranean regions did export carpets, silks and other textiles to Europe and the East. By the middle of the 19th century, they had lost most of their export market and much of their domestic market to globalization forces and rapid productivity growth in European manufacturing. Other local industries also suffered decline, and these regions underwent de-industrialization as a consequence. How different was Ottoman experience from the rest of the poor periphery? Was de-industrialization more or less pronounced? Was the terms of trade shock bigger or smaller? How much of Ottoman de-industrialization was due to falling world trade barriers—ocean transport revolutions and European liberal trade policy, how much due to factory-based productivity advance in Europe, how much to declining Ottoman competitiveness in manufacturing, how much to Ottoman railroads penetrating the interior, and how much to Ottoman policy? The paper uses a price-dual approach to seek the answers. It documents trends in export and import prices, relative to each other and to non-tradables, as well as to the unskilled wage. The impact of globalization, European productivity advance, Ottoman wage costs and policy are assessed by using a simple neo-Ricardian three sector model, and by comparison with what was taking place in the rest of the poor periphery.
  • Topic: Economics, Globalization, International Trade and Finance, Markets
  • Political Geography: Britain, Europe, Turkey, India, Egypt
  • Author: Andrei Panibratov, Kalman Kalotay
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Outward foreign direct investment (OFDI) from Russia often surprises outside observers by its landmark deals. One of them was the purchase in September 2009 of a 55% stake in General Motors' German affiliate Opel by a consortium of the Canadian car maker Magna and the Russian state-owned bank Sberbank. The latter is the largest creditor of the Russian car maker GAZ, and may represent its commercial interests in the contract. With this deal, Russia has bought into the industrial heartland of the world economy and could potentially access more advanced technology. This acquisition hints at the growth of Russian OFDI in general, which has prospered despite fears in many host countries that the investors are subject to Russian political interference, a fear that recently announced Russian policy intentions may allay.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Russia, Europe, Asia
  • Author: Martin S. Feldstein
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: This paper comments on the experience of the U.S. economy in the 1930s, its lessons for managing the current economic downturn, and the relation of U.S. economic conditions to our future national security. Some of the conclusions are: (1) Although the current recession will be long and very damaging, it is not likely to deteriorate into conditions similar to the Depression of the 1930s. Policy makers now understand better than they did in the 1930s what needs to be done and what needs to be avoided. (2) The focus on domestic economic policies in the 1930s and the desire to remain militarily neutral delayed the major military buildup that eventually achieved the economic recovery. (3) A well-functioning system of bank lending is necessary for economic expansion. We have yet to achieve that in the current situation. (4) Raising taxes, even future taxes, can depress economic activity. The administration's budget proposes to raise tax rates on higher income individuals, on dividends and capital gains, on corporate profits and on all consumers through the cap and trade system of implicit CO2 taxes. (5) Inappropriate trade policies and domestic policies that affect the exchange rate can hurt our allies, leading to conflicts that spill over from economics to impair national security cooperation. Reducing long-term U.S. fiscal deficits would reduce the risk of inflation and thereby reduce the fear among foreign investors that their dollar investments will lose their purchasing power. (6) The possibilities for domestic terrorism and of cyber attacks creates risks that did not exist in the 1930s or even in more recent decades. The scale and funding of the FBI and the Department of Homeland Security is not consistent with these new risks.
  • Topic: Economics, International Trade and Finance, Terrorism, Financial Crisis
  • Political Geography: United States
  • Author: Jeffry A. Frieden
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: Council on Foreign Relations
  • Abstract: When the leaders of the Group of 20 (G20) major economies met in Pittsburgh at the end of September 2009, the topic of “rebalancing” the world economy was high on the agenda. The final com- muniqué's first substantive commitment was “to work together as we manage the transition to a more balanced patter n of global growth.” There were good reasons for this focus. Global macroeconomic imbalances—massive borrowing by some countries and massive lending by others—drove the financial boom and bubble that eventually burs t into the current crisis. There is now nearly universal agreement that such imbalances cannot be sustained, and that the former deficit and surplus nations need to move toward macroeconomic balance.
  • Topic: Economics, International Trade and Finance, Markets, Political Economy, Financial Crisis
  • Author: Kimberly Ann Elliott
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world's poorest countries. Preferential market access programs were designed to spur larger and more diversified exports from developing countries, but product exclusions and burdensome rules undermined their usefulness, especially for the poorer countries. Most rich countries have made reforms since the UN Millennium Declaration in 2000 called for duty-free, quota-free market access for the least-developed countries. After the World Trade Organization ministerial communiqué called upon developing countries “in a position to do so” to also provide such access, key countries have moved toward that goal. But much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
  • Topic: International Trade and Finance, Poverty, United Nations
  • Publication Date: 03-2009
  • Content Type: Working Paper
  • Institution: Oxford Economics
  • Abstract: Ten years after the introduction of the euro, the onset of deep recession in the Eurozone has triggered concern that the single currency might impose intolerable strains upon some members. With some countries hit hard by the impact of the credit crunch, there are mounting concerns about a possible debt default by one or more member states, which in turn might threaten the euro and even the existence of the Eurozone. With the Eurozone economy forecast to contract by 3.1% this year, unemployment is starting to climb steeply and fiscal deficits are soaring. This has raised concerns about deteriorating public finances in a number of countries, leading to sharply wider spreads on government bonds and credit rating downgrades for Greece, Spain and Portugal, with Ireland maybe facing a similar fate soon. And repercussions from the growing economic crisis in Central and Eastern Europe are adding to the problem, with Austria particularly exposed. Rising bond spreads were always intended to be the mechanism that would restrain public spending by more profligate Eurozone countries. But the question now is whether the weaker economies can withstand the strains that a lengthy period of recession will impose and, at the same time, adopt credible medium-term spending plans to ward off the worst of the downturn and retain market confidence. With fiscal deficits already rising as a result of bank bailouts, fiscal packages and recession will push budget deficits far above the 3% of GDP target – Ireland, facing a deficit of 12% of GDP, and Spain will be worst hit. And with rising deficits and higher bond spreads pushing up the cost of debt, countries face a sharp rise in their level of indebtedness, with Greece and Italy seeing debt/GDP ratios around 100%. This deterioration could lead to a further downward spiral if the recession is prolonged and will be a test of countries' euro commitment, which has remained strong thus far despite rising social tensions in some countries. At this stage, the problems remain manageable and the risk of default or of countries leaving the euro is still very low. Bond spreads are still much lower than during much of the 1990s, when countries were striving to qualify for euro membership, and the currency risks attached to leaving the euro would be substantial. Moreover, EU countries that have been exposed to considerable currency strain over the past year are anxious to join the Eurozone as soon as possible, to take advantage of the benefits of a stable currency. While some smaller countries may experience financial difficulties, it seems inevitable that the larger Eurozone members would step in to stabilise the situation – failure to do so would risk contagion spreading to other countries, which in turn would cause even deeper problems for the euro. More policy action also seems likely to counter this threat – although the German government will probably remain reluctant to countenance the scale of expansionary fiscal policy really needed at this time. Current policies inevitably mean a long hard slog back towards fiscal rectitude in the years ahead, with monetary policy also tightening and growth slower than previously expected. Fiscal federalism may also have to be on the agenda. All this will undoubtedly lead to ongoing strains within the Eurozone. And any measures by governments that appear to be protectionist – such as the support for the French car industry – will only fuel these tensions.
  • Topic: Economics, International Trade and Finance, Regional Cooperation, Treaties and Agreements, Financial Crisis
  • Political Geography: Europe, Germany
  • Publication Date: 03-2009
  • Content Type: Working Paper
  • Institution: Oxford Economics
  • Abstract: Ports are vital for the health of the UK economy and the movement of its population. They are gateways into the UK for trade and travel. Over 95% of UK imports and exports by volume and 75% by value pass through the country's ports. In terms of tonnage handled, the UK ports sector is the largest in Europe. In 2007, UK ports handled 580 million tonnes of freight. In 2007, 24.8 million international sea passengers went through UK ports. Nearly three quarters of journeys were to France. Another 14 per cent were to the Republic of Ireland. In 2007, 24.2 million domestic sea passengers traveled between ports in the UK. Sea crossings comprised 4.0 million of these journeys. Inter island journeys the remaining 20.2 million. Of which 10.7 million trips were between Hampshire and Isle of Wight and 8.0 million between the Scottish islands.
  • Topic: Economics, International Trade and Finance
  • Political Geography: United Kingdom, Europe
  • Publication Date: 02-2009
  • Content Type: Working Paper
  • Institution: Oxford Economics
  • Abstract: Business for New Europe has requested Oxford Economics to undertake a study detailing the economic ties between the UK and the rest of the European Union (EU), and where possible, quantify them according to a number of parameters such as trade, labour force, tourism, FDI, portfolio investments and banking linkages. In the context of the current economic situation, there is a growing need for increased economic integration and cooperation between partner countries. Therefore, it is particularly relevant to review the importance of the economic links between the UK and the rest of the EU. These inter-relations have come to the fore since the outbreak of the financial crisis. Analysing the impact of the credit crunch on UK-EU relations is not within the scope of this report.
  • Topic: Economics, International Trade and Finance, Markets, Regional Cooperation
  • Political Geography: United Kingdom, Europe
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Economist Intelligence Unit
  • Abstract: Leo Abruzzese, Editorial Director for North America, discusses the latest EIU forecast for the world. Forward-looking economic indicators have continued to improve in many countries in recent months, suggesting that the worst of the contraction in global GDP is over. The improvement has triggered hopes of an imminent and sustained global economic recovery. But does this signal the start of a genuine strong recovery, or is it a false dawn, to be followed by months—or even years—of anemic growth? What is the outlook for the US, Canada, and Asia, as well as the major emerging markets, over the next couple of years? And what are the downside risks to this outlook?
  • Topic: Economics, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: United States, Canada, Asia, North America
  • Author: Olivier Jeanne, Pierre-Olivier Gourinchas
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: The textbook neoclassical growth model predicts that countries with faster productivity growth should invest more and attract more foreign capital. We show that the allocation of capital flows across developing countries is the opposite of this prediction: capital seems to flow more to countries that invest and grow less. We then introduce wedges into the neoclassical growth model and find that one needs a saving wedge in order to explain the correlation between growth and capital flows observed in the data. We conclude with a discussion of some possible avenues for research to resolve the contradiction between the model predictions and the data.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Author: Christopher D. Carroll, Olivier Jeanne
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: We model the motives for residents of a country to hold foreign assets, including the precautionary motive that has been omitted from much previous literature as intractable. Our model captures many of the principal insights from the existing specialized literature on the precautionary motive, deriving a convenient formula for the economy's target value of assets. The target is the level of assets that balances impatience, prudence, risk, intertemporal substitution, and the rate of return. We use the model to shed light on two topical questions: The “upstream” flows of capital from developing countries to advanced countries, and the long-run impact of resorbing global financial imbalances.
  • Topic: Economics, International Trade and Finance, Sovereign Wealth Funds
  • Author: Gary Clyde Hufbauer, Jisun Kim
  • Publication Date: 09-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: Trade and environment intersect in many ways. Aside from the broad debate as to whether economic growth and trade adversely affect the environment, there are linkages between existing rules of the World Trade Organization (WTO) and rules established in various multilateral environmental agreements. Controlling greenhouse gas emissions promises to be a top priority for both national and international agendas, and special attention must be given to the relationship between the WTO and the emerging international regime on climate change. This working paper examines the nexus of the WTO and climate change and discusses challenges and options.
  • Topic: Climate Change, Environment, International Organization, International Trade and Finance
  • Author: Matthew Adler, Gary Clyde Hufbauer, Jeffrey J. Schott, Claire Brunel
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: The Doha Round is the longest-running trade liberalization negotiation in the postwar era. Despite its longevity, the end is not yet in sight as parties disagree on the depth of liberalization necessary in agriculture and nonagricultural market access (NAMA). This rift is prolonging the Round's completion and hindering the discussion of other important issues on the negotiating agenda, particularly services. To shed light on the debate concerning the benefits from Doha, this paper first estimates, using three metrics, the potential gains from liberalization in agriculture and NAMA resulting from the specific “modalities” set forth in papers drafted by the chairs of the Doha negotiating groups. Next, the study estimates the benefits that could result from sector initiatives in chemicals, electronic/electrical goods, and environmental goods that go beyond the tariff cuts outlined in the negotiating modalities. Finally, prospective gains from liberalization of services barriers and improvements in trade facilitation are also analyzed. Overall, we estimate that the boost to global exports from concluding the Doha Round could range between $180 billion and $520 billion annually. Likewise, the potential GDP gains are significant, between $300 billion and $700 billion annually, and well balanced between developed and developing countries.
  • Topic: Agriculture, Economics, International Trade and Finance
  • Author: Jacob Funk Kirkegaard
  • Publication Date: 08-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: Th is paper expands on the methodology of Groshen and Potter (2003) for studying cyclical and structural changes in the US economy and analyzes the net structural and cyclical employment trends in the US economy during the last 10 trough-to-trough business cycles from 1949 to the present. It illustrates that the US manufacturing sector and an increasing number of services sectors, including parts of the fi nancial services sector, are experiencing structural employment declines. Structural employment gains in the US labor market are increasingly concentrated in the healthcare, education, food, and professional and technical services sectors and in the occupations related to these industries. Th e paper concludes that the improved operation of the US labor market during the 1990s has reversed itself in the 2000s, with negative long-term economic eff ects for the United States.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: United States
  • Author: Stephan Haggard, Marcus Noland
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: As a small country dependent on foreign trade and investment, North Korea should be highly vulnerable to external economic pressure. In June 2009, following North Korea's second nuclear test, the UN Security Council passed Resolution 1874, broadening existing economic sanctions and tightening their enforcement. However, an unintended consequence of the nuclear crisis has been to push North Korea into closer economic relations with China and other trading partners that show little interest in cooperating with international efforts to pressure North Korea, let alone in supporting sanctions. North Korea appears to have rearranged its external economic relations to reduce any impact that traditional sanctions could have.
  • Topic: Economics, International Trade and Finance, Sanctions
  • Political Geography: China, North Korea, United Nations
  • Author: Theodore H. Moran
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: The 2008 election rekindled debate about whether US multinationals shift technology across borders and relocate production in ways that might harm workers and communities at home. President Obama now pledges to end tax breaks for corporations that ship jobs overseas. The preoccupation about the behavior of American multinationals takes three forms: (1) that US-based multinational corporations may follow a strategy that leads them to abandon the home economy, leaving the workers and communities to cope on their own with few appealing alternatives after the multinationals have left; (2) worse, that US-based multinational corporations may not just abandon home sites but drain off capital, substitute production abroad for exports, and “hollow out” the domestic economy in a zero-sum process that damages those left behind; and (3) worst, that US-based multinational corporations may deploy a rent-gathering apparatus that switches from sharing supranormal profits and externalities with US workers and communities to extracting rents from the United States. Each of these concerns contains a hypothetical outcome that can be compared with contemporary evidence from the United States and other home countries.
  • Topic: Economics, International Political Economy, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: United States, America
  • Author: Pablo M. Pinto, Karl P. Sauvant, Petros C. Mavroidis, Curtis J. Milhaupt, Peter Rosenblum, Hans Smit
  • Publication Date: 01-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The international investment regime has grown rapidly over the past two decades, along with foreign direct investment (FDI) flows, which reached $1.8 trillion in 2007. Even in the absence of a single comprehensive multilateral investment treaty or institution, that regime is governed by principles and rules enshrined in some 2,600 bilateral investment treaties and another 250 free trade agreements that contain substantial investment provisions. These treaties are supplemented by a number of other relevant multilateral agreements and customary international law, along with complementary principles applied by international financial institutions such as the World Bank and the International Monetary Fund, that cover aspects of the activities of multinational enterprises as well as how states regulate them.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: United States
  • Author: Bryan Groves
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: U.S. Military Academy, Department of Social Science
  • Abstract: A number of important geopolitical events in the last three decades, Belgium's membership in the EU and its adoption of the Euro, along with its domestic responses have impacted recent developments in its economy. The nation has been marked by an increasing Real GDP, a balanced budget, a CA surplus, improved terms of trade, decreased openness, high unemployment, an ageing population, a pending social security crisis, and a contractionary fiscal and monetary policy meant to keep inflation low and increase national savings to avoid a social security disaster.
  • Topic: Economics, International Trade and Finance
  • Political Geography: Europe
  • Author: Robert A. Manning, Evan A. Feigenbaum
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Council on Foreign Relations
  • Abstract: President Barack Obama heads to Singapore in November for the 2009 Asia-Pacific Economic Cooperation forum (APEC) summit. It will be his first foray into the arcane world of Asian multilateralism. And if his administration adopts a new approach, it could yet fashion a more sustainable role for the United States in a changing Asia.
  • Topic: Development, Economics, Globalization, International Trade and Finance, Bilateral Relations
  • Political Geography: United States, Asia
  • Author: Timothy A. Wise
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Global Development and Environment Institute at Tufts University
  • Abstract: With the opening of the Mexican economy under the North American Free Trade Agreement (NAFTA), Mexican agriculture came under new competitive pressures from U.S. exports. It was widely recognized at the beginning of NAFTA that Mexico had geographically-based comparative advantages in supplying off-season fruits and vegetables to a hungry U.S. market. NAFTA's liberalization of agricultural trade produced the expected results, with more staple crops and meats flowing south and more seasonal fruits and vegetables flowing north. In agriculture, tariffs and quotas have now mostly been eliminated. Not so agricultural subsidies, which were left largely undisciplined by NAFTA. High U.S. farm subsidies for exported crops, which compete with Mexican products, have prompted charges that the level playing field NAFTA was supposed to create is in fact tilted heavily in favor of the United States.
  • Topic: Agriculture, International Trade and Finance, Treaties and Agreements
  • Political Geography: United States, North America
  • Author: Rachel McCulloch, Chad P. Bown
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: Critical appraisals of the current and potential benefits from developing country engagement in the WTO focus mainly on the Doha Round of negotiations. This paper examines a different aspect of developing country participation in the WTO: use of the WTO dispute settlement system to enforce foreign market access rights already negotiated in earlier rounds of multilateral negotiations. We examine data on developing country use from 1995 through 2008 of the WTO Dispute Settlement Understanding (DSU) to enforce foreign market access. The data reveal three notable trends: developing countries' sustained rate of self-enforcement actions despite declining use of the DSU by developed countries, developing countries' increased use of the DSU to self-enforce their access to the markets of developing as well as developed country markets, and the prevalence of disputes targeting highly observable causes of lost foreign market access, such as antidumping, countervailing duties, and safeguards. The paper also examines how introduction of the Advisory Centre on WTO Law (ACWL) into the WTO system in 2001 has affected developing countries' use of the DSU to self-enforce their foreign market access rights. A first pass at the data indicates that developing country use of the ACWL mirrors their use of the DSU more broadly; the ACWL has had little effect in terms of introducing new countries to DSU self-enforcement. A closer look at the data reveals evidence on at least three channels through which the ACWL may be enhancing developing countries' ability to self-enforce foreign market access: increased initiation of sole-complainant cases, more extensive pursuit of the DSU legal process for any given case, and initiation of disputes over smaller values of lost trade.
  • Topic: Development, Economics, International Trade and Finance, Markets
  • Author: Arvind Subramanian, Simon Johnson, William Larson, Chris Papageorgiou
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper sheds light on two problems in the Penn World Table (PWT) GDP estimates. First, we show that these estimates vary substantially across different versions of the PWT despite being derived from very similar underlying data and using almost identical methodologies; that this variability is systematic; and that it is intrinsic to the methodology deployed by the PWT to estimate growth rates. Moreover, this variability matters for the cross-country growth literature. While growth studies that use low-frequency data remain robust to data revisions, studies that use annual data are less robust. Second, the PWT methodology leads to GDP estimates that are not valued at purchasing power parity (PPP) prices. This is surprising because the raison d'être of the PWT is to adjust national estimates of GDP by valuing output at common international (PPP) prices so that the resulting PPP-adjusted estimates of GDP are comparable across countries. We propose an approach to address these two problems of variability and valuation.
  • Topic: Development, Economics, International Political Economy, International Trade and Finance, International Affairs
  • Author: Arvind Subramanian, Aaditya Mattoo, Dominique van der Mensbrugghe, Jianwu He
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: There is growing clamor in industrial countries for additional border taxes on imports from countries with lower carbon prices. A key factor affecting the impact of these taxes is whether they are based on the carbon content of imports or the carbon content in domestic production. Our quantitative estimates suggest that the former action when applied to all merchandise imports would address competitiveness and environmental concerns in high income countries but with serious consequences for trading partners. For example, China's manufacturing exports would decline by one-fifth and those of all low- and middle-income countries by 8 percent; the corresponding declines in real income would be 3.7 percent and 2.4 percent. In contrast, border tax adjustment based on the carbon content in domestic production, especially if applied to both imports and exports, would broadly address the competitiveness concerns of producers in high income countries without seriously damaging developing-country trade. Therefore, as part of a comprehensive agreement on climate change, new WTO rules could be negotiated that would prohibit the extreme form of action while possibly allowing trade actions based on domestic carbon content as a safety valve.
  • Topic: Climate Change, Environment, International Trade and Finance, Treaties and Agreements
  • Political Geography: China
  • Author: Stephen J. Ramos
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Belfer Center for Science and International Affairs, Harvard University
  • Abstract: To understand Dubai's modern history since its founding in 1833, one must go further back in time to explore the regional history that frames its foundation. European powers, beginning with the Venetians, and, then subsequently, the Portuguese, the Dutch, and finally the British, were interested in the Gulf region as a means to secure trade routes to and from the Indian Subcontinent and points eastward. This meant that from the fifteenth century through the late nineteenth century, if trade routes could move uninterrupted through the Gulf region, European powers were not involved in the societal affairs of settlements as a traditionally colonial ruling class, nor did European merchants bother to extensively explore trade within the region, believing that it required more effort than either the climate or the local economies were worth. The region's local tribes were divided among the maritime coastal groups and those that were nomadic and land-bound, and conflict among these groups occurred in parallel with the larger European conflicts also playing out in the region. The intersection of the two came with the increase in piracy, which, in very basic terms, represented a kind of cultural disagreement on trade customs. The Europeans felt that they were unjustly looted and local groups simply sought to protect themselves from foreign incursion while taking what they believed was their share. Historians still debate this issue today, but in relation to Dubai, the piracy of the times serves as an example of how looser understandings of the licit and illicit, particularly in terms of trade, could be capitalized upon as business venture. The smuggling of gold, weapons, and other goods throughout Dubai's history may have been seen as illicit from perspectives outside Dubai's ports, but the merchant-friendly environments of these ports and the adherence to local autonomy allowed them to trade freely.
  • Topic: Economics, International Trade and Finance, Oil
  • Political Geography: Europe, India, Arabia, Dubai
  • Author: Bryant Cannon
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Mekelle, a rapidly developing city in northern Ethiopia, is located about 780 km from the capital, Addis Ababa. Established nearly 150 years ago by Emperor Yohannes, the city is nestled in Ethiopia's temperate highlands, in the heart of a region that traces its origins back to the ancient Axum Empire that once controlled Red Sea trade (4th century BC – 10th century AD). The city maintains aproud history of many religions, particularly Orthodox Christianity, dating back to the 4th century AD. Mekelle was largely ignored in the latter half of the 20th century by Ethiopia's ruling feudal and socialist governments, but began to experience an economic and cultural rejuvenation with the election of a democratic government in Ethiopia in the early 1990s.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Africa, Ethiopia
  • Author: Duncan Green
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Oxfam Publishing
  • Abstract: At the time of independence in 1964 Zambia was a middle-income country and appeared set to develop into a prosperous nation. However, the combination of a tumultuous world economy and fiscal mismanagement led to rapid economic decline, which continued unabated into the 1980s and 1990s. Average economic growth from 1990–1999 was the lowest in the region, and unemployment and inflation soared resulting in per capita incomes 50% less in 1999 than they had been 25 years earlier.
  • Topic: Economics, Globalization, International Trade and Finance, Financial Crisis
  • Political Geography: Africa
  • Author: Fulvio Castellacci
  • Publication Date: 09-2009
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: This paper presents a survey of theoretical models of heterogeneity, growth and competitiveness. We compare two main theoretical traditions, evolutionary economics and mainstream heterogeneity models, in order to investigate whether the incorporation of heterogeneous agents has made the recent wave of mainstream models more similar to the evolutionary modelling style and results. The results of our survey exercise can be summarized as follows. On the one hand, we observe some increasing similarities and converging aspects between the evolutionary and the mainstream approaches to the study of heterogeneity. On the other hand, however, there are still some fundamental differences between them, which mainly relate to the distinct set of theoretical assumptions and methodological frameworks in which these heterogeneity models are set up and rooted. In short, the evolutionary approach emphasizes the complexities of the growth process and makes an effort to provide a realistic description of it, whereas the mainstream approach does instead follow a modelling methodology that emphasizes the analytical power and tractability of the formalization, even if that implies a somewhat simplified and less realistic description of the growth process.
  • Topic: Development, Economics, Industrial Policy, International Trade and Finance, Markets
  • Author: Philip I. Levy
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: American Enterprise Institute for Public Policy Research
  • Abstract: Bilateral free trade agreements have generally been analyzed as instances of preferential reciprocal tariff liberalization. Viewed through this lens, such agreements raise concerns both about new competition and about trade diversion. The United States-Peru Trade Promotion Agreement, an example of a serious North-South accord, demonstrates that new market access was not a principal Peruvian goal in the trade negotiations. Instead, the agreement was intended to encourage investment by locking in Peru's economic reforms. This motivation has very different implications for the global trading system than a quest for preferential access.
  • Topic: International Trade and Finance, Markets, Treaties and Agreements
  • Political Geography: United States, Latin America, Peru
  • Author: Edwin M. Truman
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: The International Monetary Fund (IMF) plays a substantial regulatory role in the international monetary and financial system. The IMF has been assigned a formal regulatory role in a limited number of areas such as obligations covering exchange rate policies. The Fund has a broader informal regulatory role derived from the voluntary consent of its members such as in surveillance over members' financial sector policies and international payments imbalances. The IMF's regulatory role is unlike that of its member governments within their own jurisdictions. The Fund's formal and informal regulation must be constantly nurtured and renewed via peer-review processes.
  • Topic: Debt, Economics, International Organization, International Trade and Finance, International Monetary Fund, Monetary Policy
  • Author: Arvind Subramanian, Aaditya Mattoo, Dominique van der Mensbrugghe, Jianwu He
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: There is growing clamor in industrial countries for additional border taxes on imports from countries with lower carbon prices. While this paper confirms the findings of other research that unilateral emissions cuts by industrial countries will have minimal carbon leakage effects, output and exports of energy-intensive manufactures are projected to decline, potentially creating pressure for trade action. A key factor affecting the impact of any border taxes is whether they are based on the carbon content of imports or the carbon content of domestic production. The paper's quantitative estimates suggest that the former action when applied to all merchandise imports would address competitiveness and environmental concerns in high income countries but with serious consequences for trading partners. Border tax adjustment based on the carbon content in domestic production would broadly address the competitiveness concerns of producers in high income countries and less seriously damage developing country trade.
  • Topic: Climate Change, Economics, Energy Policy, Environment, International Trade and Finance
  • Political Geography: China
  • Author: Naji Abi-Aad
  • Publication Date: 09-2009
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: Mediterranean is expected to play an increasingly important role in global energy flows which might result in a greater European dependence on North African supplies and less on the Gulf. At the same time, potential synergies are said to exist in such fields as the development of renewable energy sources, and investment required to meet domestic electricity demand. As far as oil and refined products are concerned, the volume and direction of oil flows to and through the Mediterranean will be important, especially as an expected rise in transport in the near future contains serious security implications. As a result, an increased focus on the development of a pipeline network between the Mediterranean and Europe might open possibilities for Gulf involvement. The same could apply for the supply of natural gas to Europe. In the field of power generation, the improved ability to transmit electricity over longer distances opens the door for establishing a continuum of interconnection from the Gulf to Europe through the Mediterranean and the ability to serve markets along those connections. Finally, the rapidly rising awareness of the need for renewable energy sources suggests an additional field of cooperation.
  • Topic: Energy Policy, Globalization, International Trade and Finance, Oil
  • Political Geography: Europe, Middle East, Arabia, North Africa
  • Author: Michael Emerson, Evgeny Vinokurov
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: There is at present an overlapping but inadequately coordinated combination of strategic trans-continental transport corridors or axes stretching across the Eurasian landmass, centred on or around Central Asia. There are three such initiatives - from the EU, China and the Asian Development Bank, and the Eurasian Economic Community. This paper reviews these several strategic transport maps, and makes proposals for their coordination and rationalisation. So far the EU Central Asia strategy has not paid much attention to these questions. However the EU's own initiatives (the Pan-European Axes and the TRACECA programme) are in need of updating and revision to take into account major investments being made by other parties. In particular the case is made for a 'Central Eurasian Corridor' for rail and road that would reach from Central Europe across Ukraine and Southern Russia into West Kazakhstan, and thence to the East Kazakh border with China, thus joining up with and completing the West China-West Europe corridor promoted by the Asian Development Bank. There should also be a North-South corridor that would cross over this Central Eurasian Corridor in West Kazakhstan and lead south to the Middle East and South Asia. These adaptations of existing plans could become an exemplary case of cooperation between Central Asia and all the major economic powers of the Eurasian landmass.
  • Topic: International Trade and Finance, Infrastructure
  • Political Geography: Russia, China, Europe, Central Asia, Ukraine, Kazakhstan
  • Author: Geny Piotti
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: This paper attempts to explain why internationalization processes to China are growing despite the significant difficulties that foreign direct investments into China encounter. The answer to this question can be found in the processes of decision-making on internationalization at the company level and how these affect management practices in Chinese subsidiaries. The argument I put forward in this paper is that for the small and medium-sized enterprises the study focuses on, the decisions concerning investment in China are mainly the product of structural and legitimation pressure. Structural pressure can encourage cognitive mechanisms and behavioral consequences similar to those occurring when individuals (and organizations) cope with threat. Legitimation pressure can foster wishful thinking, which pushes actors to believe that desired options are good despite evidence to the contrary. These pressures have an impact on how well companies are prepared when they internationalize and can particularly affect some crucial management practices, leading to inefficiencies and problems in subsidiaries.
  • Topic: Economics, International Trade and Finance
  • Political Geography: China, Europe, Asia, Germany
  • Author: Richard L. Bernal
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: Given their vulnerability to external economic events, small developing countries (SDEs) are particularly cognizant of their place in the world economy. Moreover, given their reliance on international trade for prosperity, SDEs are also concerned about the rules and institutions governing the multilateral trading system. In this paper, the author reviews and evaluates the participation of SDEs in the governance of the multilateral trading system, with a particular focus on the WTO. He suggests how SDEs can improve the efficacy of their participation in the WTO's decision-making process, and proposes ways in which the WTO could be adapted to better integrate SDEs in its governance.
  • Topic: Economics, Emerging Markets, International Trade and Finance, Third World, World Trade Organization
  • Publication Date: 03-2009
  • Content Type: Working Paper
  • Institution: Transparency International
  • Abstract: Bribery and corruption remain endemic problems in many countries, weakening governance and posing a major impediment to development. At the same time, bribery and corruption are a significant risk for companies around the world: not only must companies comply with anti-bribery legislation, but corrupt company practices are increasingly scrutinised and punished by both investors and society at large who demand that companies behave as responsible corporate citizens. To ensure compliance with laws and to manage the broader risk of corruption, firms must adopt coherent policies and systems to prevent and redress bribery and corruption.
  • Topic: Corruption, International Trade and Finance, International Affairs, Governance, Peacekeeping
  • Publication Date: 02-2009
  • Content Type: Working Paper
  • Institution: Transparency International
  • Abstract: The Business Principles for Countering Bribery were originally developed through an extensive multi-stakeholder process involving companies, non-governmental organisations and trade unions as a tool to assist enterprises to develop effective approaches to countering bribery in all of their activities.
  • Topic: Corruption, International Trade and Finance, International Affairs, Governance
  • Author: Juanita Riaño
  • Publication Date: 05-2009
  • Content Type: Working Paper
  • Institution: Transparency International
  • Abstract: Transparency International's (TI) 2009 Global Corruption Barometer (the Barometer) presents the main findings of a public opinion survey that explores the general public's views of corruption, as well as experiences of bribery around the world. It assesses the extent to which key institutions and public services are perceived to be corrupt, measures citizens' views on government efforts to fight corruption, and this year, for the first time, includes questions about the level of state capture and people's willingness to pay a premium for clean corporate behaviour.
  • Topic: Corruption, International Trade and Finance, International Affairs, Governance, Law
  • Author: Fritz Heimann, Gillian Dell
  • Publication Date: 06-2009
  • Content Type: Working Paper
  • Institution: Transparency International
  • Abstract: In 1997, the member states of the Organisation for Economic Cooperation and Development (OECD) adopted the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the OECD Convention). The adoption of the Convention was a landmark event in the fight against international corruption representing a collective commitment to ban foreign bribery by the governments of the leading industrialised states - countries accounting for the majority of global exports and foreign investment. Because most major multinational companies are based in OECD Convention countries, the Convention was hailed as the key to overcoming the damaging effects of foreign bribery on democratic institutions, development programmes and business competition. The Convention now has 38 parties. It requires parties to make it an offence to “intentionally offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.”
  • Topic: Corruption, International Trade and Finance, International Affairs, Governance
  • Author: Sven Biscop (ed.)
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: European Centre for Minority Issues
  • Abstract: In its 2003 European Security Strategy (ESS), the EU has a grand strategy, embracing all instruments and resources at the disposal of the Union and the Member States, but a partial one. The ESS tells us how to do things – in a preventive, holistic and multilateral way – but it is much vaguer on what to do: what are the concrete objectives and priorities of the EU as a global actor?
  • Topic: Economics, Emerging Markets, International Political Economy, International Trade and Finance, Regional Cooperation
  • Political Geography: Europe
  • Author: Robert Jellinek
  • Publication Date: 03-2009
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: This paper has its origins in the observation that government responses to the global financial crisis are as much political phenomena as they are economic. The current global financial crisis, among its many consequences, has on a very high level shaken up the world political order. And while the crisis is international in origin—its roots lie in the breadth and the degree of the dispersal of risk associated with mortgagebacked securities, as well as the growing imbalance in international capital flows—its resolution is necessarily being carried out first and foremost on a domestic level. This is not least of all because, in the decade since the Asian financial crises, states have begun to play a dramatically increased role in international finance in relation to both multilateral financial institutions such as the IMF and traditional private actors. In an age where global economic ties are integral to domestic economies and where states themselves are becoming some of the biggest players in international capital markets, a state's global financial standing will more than ever determine its political clout on the world stage. With states acting as market makers, lenders of last resort, and regulators of last resort, the key to understanding the future of individual states in the global economic order can be found only by analyzing states' domestic and foreign policy decisions within the context of the specific constraints facing those states at home and abroad.
  • Topic: Economics, Emerging Markets, Human Rights, International Trade and Finance, Financial Crisis
  • Political Geography: Russia, Asia
  • Author: Sandra Polaski, Dirk Willenbockel, Eduardo Zepeda, Scott McDonald, Joaquim Bento de Souza Ferreir, Janine Berg, Karen Thierfelder
  • Publication Date: 03-2009
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: Brazil's economic growth rate has been positive for the past eight years, after two decades of setbacks and extreme volatility. The country has once again been growing—for a sustained period—at rates that exceed its population growth, with average gross domestic product (GDP) growth per capita averaging 1.63 percent from 2000 to 2007. This exceeds average per capita GDP growth of 0.83 percent from 1980 to 1989 and 0.28 percent from 1990 to 1999, although it still falls well short of the 5.92 percent per capita growth rate from 1970 to 1979.
  • Topic: Economics, International Trade and Finance, Labor Issues, Governance
  • Political Geography: Brazil, South America
  • Author: Alejandro Foxley
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: No country has proved immune to the devastating effects of the current global financial crisis. But the middle-income countries of Eastern Europe, Latin America, and East Asia, which previously had achieved significant progress—economically and socially—have shown themselves to be particularly vulnerable. The crisis has highlighted important lessons for these countries, which inhabit a twilight zone between the developed and developing worlds?and those that aspire to join their ranks—as they rebuild.
  • Topic: Economics, International Trade and Finance, Monetary Policy, Financial Crisis
  • Political Geography: Europe, East Asia, Latin America
  • Author: Eduardo Zepeda, Mohamed Chemingui, Hedi Bchir, Christopher Onyango, Bernadette Wanjala
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: As the first decade of the twenty- first century comes to an end, Kenya's economy is being confronted with a number of challenges that call for carefully crafted, well- informed policies. After fifteen years of stagnation—when the country witnessed zero increase in its gross domestic product (GDP) per capita and investment at levels below 20 percent of GDP—it has risen to become one of Africa's fast growing economies (see Arbache and Page 2008). Between 2004 and 2007, Kenya's economy showed signs of revitalization, and the average annual growth rate climbed above 5 percent, allowing Kenyans to finally enjoy an increase in GDP per capita. However, the political turmoil of 2008 slowed growth, and the current global financial and economic crisis has made it difficult to return to high growth rates. Thus, Kenya now faces shrinking export markets, rising protectionist measures worldwide, and meager financial flows.
  • Topic: Agriculture, Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: Kenya, Africa
  • Author: Alejandro Foxley
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: The global financial crisis has reignited the fierce debate about the roles of the market and the state in modern economies. Latin America, in particular, revisits this debate every time it suffers an external shock. While some blame unregulated markets, others fault states' inability to design institutions or implement policies capable of neutralizing the negative impact of these shocks on output, employment, and social welfare.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: Latin America
  • Author: Katherine Morton
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Lowy Institute for International Policy
  • Abstract: One of the greatest dilemmas of the early 21st century is how to satisfy the demands of densely populated states in the context of a global environmental crisis. As the world's biggest polluter and prominent emerging world power, China is at the centre of the global debate. Worsening pollution trends, increasing resource scarcity, and widespread ecological degradation have serious implications for China's ongoing modernisation drive. The spillover effects across borders also pose a challenge to its relations with the outside world. Although China's per capita CO2 emissions are low relative to the United States and Australia, they already exceed the world average. In 2007, China overtook the United States to become the world's largest aggregate emitter.
  • Topic: Environment, Government, International Trade and Finance, Reform
  • Political Geography: China, Asia, Australia
  • Author: Alexei Monsarrat, Kiron K. Skinne
  • Publication Date: 09-2009
  • Content Type: Working Paper
  • Institution: Atlantic Council
  • Abstract: This statement, delivered by Federal Reserve Chairman Bernanke in the understated manner of a central banker, was made nearly a year after the collapse of Lehman Brothers—the event that tipped the global financial system into full crisis. Bernanke's message starkly reveals the scope of the challenge facing the stewards of the global economy.
  • Topic: Economics, International Cooperation, International Trade and Finance, Financial Crisis
  • Author: Annette Heuser, Frances Burwell
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: Atlantic Council
  • Abstract: This memo is a joint effort of the Bertelsmann Foundation and the Atlantic Council and is intended as a contribution to advancing the integration of the trans‐Atlantic economy. This project was conceived as a blueprint for the Transatlantic Economic Council (TEC) on the occasion of the October meeting.
  • Topic: International Relations, Climate Change, Economics, International Cooperation, International Trade and Finance
  • Publication Date: 11-2009
  • Content Type: Working Paper
  • Institution: Atlantic Council
  • Abstract: This report, based on the September 11, 2009 workshop on “U.S.-EU Cooperation toward Smart Grid Deployment” recommends that U.S. and EU leaders work in concert with the private sector to enhance the development and deployment of smart grid technologies across the Atlantic. The need for undertaking a holistic approach requires transatlantic cooperation in a number of complex areas, which warrant the establishment of specific public-private working groups focused on creating a common architecture with compatible standards, including those for cyber security, that can be applied in the transatlantic community and rolled out globally.
  • Topic: Economics, Foreign Exchange, International Trade and Finance, Treaties and Agreements
  • Political Geography: United States, Europe
  • Author: Keith Hartley, Binyam Solomon
  • Publication Date: 10-2009
  • Content Type: Working Paper
  • Institution: NATO Defense College
  • Abstract: These is some consensus among economic forecasters and international economic organizations that the world economy is stabilizing after the worst global contraction since the end of the Second World War. While it is difficult to ascertain empirically whether the massive fiscal policy support played a role or not, the improving credit conditions and the return of demand in the housing market in North America and the UK point to some evidence that the stimulus is providing the necessary short-term boost. Nonetheless, there remain significant challenges that may constrain a quick recovery including the decline in household wealth (debt-laden consumers rebuilding their savings), persistent unemployment and deleveraging (decreasing the amount of debt a firm holds by paying it off) in the financial system together with future long-term prospects of inflation.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: United Kingdom, North America
  • Author: Terry F. Buss, Lois Fu
  • Publication Date: 06-2009
  • Content Type: Working Paper
  • Institution: The National Academy of Public Administration
  • Abstract: We are in the midst of a global economic crisis. The federal government has responded on an unprecedented scale and scope, with injections of trillions into financial markets, infusions of cash to troubled industries, state and local governments, and people in need. Government is employing tools in ways never befo re considered and inventing new tools, in the hope of stabilizing the economy and spurring economic recovery.
  • Topic: Economics, International Trade and Finance, Financial Crisis, Governance, Reform
  • Author: Eswar Prasad, Kenneth Rogoff, M. Ayhan Kose, Shang-Jin Wei
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: We review the large literature on various economic policies that could help developing economies effectively manage the process of financial globalization. Our central findings indicate that policies promoting financial sector development, institutional quality and trade openness appear to help developing countries derive the benefits of globalization. Similarly, sound macroeconomic policies are an important prerequisite for ensuring that financial integration is beneficial. However, our analysis also suggests that the relationship between financial integration and economic policies is a complex one and that there are unavoidable tensions inherent in evaluating the risks and benefits associated with financial globalization. In light of these tensions, structural and macroeconomic policies often need to be tailored to take into account country specific circumstances to improve the risk-benefit tradeoffs of financial integration. Ultimately, it is essential to see financial integration not just as an isolated policy goal but as part of a broader package of reforms and supportive macroeconomic policies.
  • Topic: Development, Economics, Globalization, International Trade and Finance
  • Political Geography: Global Focus