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Begin New Search Political Geography Global Focus Content Type Working Paper

251. The impact of trade and trade policy on the environment and the climate: A review

Author:
Gabriel Felbermayr and Sonja Peterson
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
While international trade can offer gains from specialization and access to a wider range of products, it is also closely interlinked with global environmental problems, above all, anthropogenic climate change. This survey provides a structured overview of the economic literature on the interaction between environmental outcomes, trade, environmental policy and trade policy. In this endeavor, it covers approaches reaching from descriptive data analysis based on Input‐Output tables, over quantitative trade models and econometric studies to game‐theoretic analyses. Addressed issues are in particular the emission content of trade and emissions along value chains, the relocation of dirty firms and environmental impacts abroad, impacts of specific trade polices (such as trade agreements or tariffs) or environmental policy (such as Border Carbon Adjustment), transportation emissions, as well as the role of firms. Across the different topics covered, the paper also tries to identify avenues for future research, with a particular focus on extending quantitative trade and environment models.
Topic:
Climate Change, Environment, International Trade and Finance, Trade, and Carbon Emissions
Political Geography:
Global Focus

252. Understanding differences in attitudes to immigration: a meta-analysis of individual-level factors

Author:
Lenka Dražanová, Jérôme Gonnot, Tobias Heidland, and Ralf Krüger
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Public attitudes toward immigration have attracted much scholarly interest and extensive empirical research in recent years. Despite a sizeable theoretical and empirical literature, no firm conclusions have been drawn regarding the factors affecting immigration opinion. We address this gap through a formal meta-analysis derived from the literature regarding immigration attitudes from the top journals of several social science disciplines in the years 2009-2019 and based on a population of 1185 estimates derived from 144 unique analyses on individual-level factors affecting attitudes to immigration. The meta-analytical findings show that two individual-level characteristics are most significantly associated with attitudes to immigration - education (positively) and age (negatively). Our results further reveal that the same individual characteristics do not necessarily explain immigration policy attitudes and attitudes towards immigrants' contribution. The findings challenge several conventional micro-level theories of attitudes to immigration. The meta-analysis can inform future research when planning the set of explanatory variables to avoid omitting key determinants.
Topic:
Globalization, Migration, Immigration, Public Opinion, and Attitudes
Political Geography:
Global Focus

253. The Consequences of Unilateral Withdrawals from the Paris Agreement

Author:
Mario Larch and Joschka Wanner
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
International cooperation is at the core of multilateral climate policy. How is its effectiveness harmed by individual countries dropping out of the global mitigation effort? We develop a multisector structural trade model with emissions from production and a constant elasticity of fossil fuel supply function to simulate the consequences of unilateral withdrawals from the Paris Agreement. Taking into account both direct and leakage effects, we őnd that a US withdrawal would eliminate more than a third of the world emissions reduction (31.8% direct effect and 6.4% leakage effect), while a potential Chinese withdrawal lowers the world emission reduction by 24.1% (11.9% direct effect and 12.2% leakage effect). The substantial leakage is primarily driven by technique effects induced by falling international fossil fuel prices.
Topic:
Climate Change, International Trade and Finance, Fossil Fuels, Carbon Emissions, and Paris Agreement
Political Geography:
Global Focus and United States of America

254. Picture This: Social Distance and the Mistreatment of Migrant Workers

Author:
Toman Barsbai, Vojtech Bartos, Victoria Licuanan, Andreas Steinmayr, Erwin Tiongson, and Dean Yang
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We experimentally study an intervention to reduce mistreatment of Filipino over?seas domestic workers (DWs) by their employers. Encouraging DWs to show their employers a family photo while providing a small gift when starting employment reduced DW mistreatment, increased their job satisfaction, and increased the likeli?hood of contract extension. While generally unaware of the intervention, DWs’ fam?ilies staying behind become more positive about international labor migration. An online experiment with potential employers suggests that the effect operates through a reduction in employers’ perceived social distance from their employees.
Topic:
Migration, Labor Issues, Labor Market, Migrant Workers, and Contracts
Political Geography:
Philippines and Global Focus

255. Economic Costs of Friend-shoring

Author:
Beata Javorcik, Lucas Kitzmueller, Helena Schweiger, and Muhammad A. Yıldırım
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Geo-political tensions and disruptions to global value chains have led policymakers to reevaluate their approach to globalisation. Many countries are considering regionalisation and friend-shoring – trading primarily with countries sharing similar values – as a way of minimising exposure to weaponisation of trade and securing access to critical inputs. If followed through, this process has the potential to reverse global economic integration of recent decades. This paper estimates the economic costs of friend-shoring using a quantitative model incorporating inter-country inter-industry linkages. The results suggest that friend-shoring may lead to real GDP losses of up to 4.6% of global GDP. Thus, although friend-shoring may provide insurance against extreme disruptions and increase the security of supply of vital inputs, it would come at a significant cost.
Topic:
Trade, Production, Regionalization, and Friend-shoring
Political Geography:
Global Focus

256. Yet it Endures: The Persistence of Original Sin

Author:
Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Notwithstanding announcements of progress, "international original sin" (the denomination of external debt in foreign currency) remains a persistent phenomenon in emerging markets. Although some middle-income countries have succeeded in developing markets in local-currency sovereign debt and attracting foreign investors, they continue to hedge their currency exposures through transactions with local pension funds and other resident investors. The result is to shift the locus of currency mismatches within emerging economies but not to eliminate them. Other countries have limited original sin by limiting external borrowing, passing up valuable investment opportunities in pursuit of stability. We document these trends, analyzing regional and global aggregates and national case studies. Our conclusion is that there remains a case for an international initiative to address currency risk in low- and middle-income economies so they can more fully exploit economic development opportunities.
Topic:
Markets, Economy, Investment, and Sovereign Debt
Political Geography:
Global Focus

257. Signaling Virtue or Vulnerability? The Changing Impact of Exchange Rate Regimes on Government Bond Yields

Author:
Zsófia Barta, Lucio Baccaro, and Alison Johnston
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Do exchange rate regimes affect the conditions under which developed countries borrow? This paper argues that they do, but their impact on yields depends on the prevailing macroeconomic context. When investors regard inflation as the most relevant risk to bond holdings, monetary union has a distinct advantage over floating and fixed exchange rates because of its credible in-built mechanism to control inflation. However, once default is seen as the most relevant risk, exchange rate rigidity becomes a liability due to its constraining effect on governments’ ability to respond to adverse shocks. We test our argument with a moving window panel analysis for twenty-three OECD countries from 1980 to 2017. We find that before the late 2000s, inflation was penalized under floating and (to a lesser extent) fixed exchange rate regimes, but not in countries in monetary union. Since the 2010s, inflation carries no penalty under any exchange rate regime. Variables linked to default risk (debt and entitlement spending) did not affect yields under any exchange rate arrangements until the mid-2000s. Afterwards, countries in monetary union (and to a lesser extent in fixed exchange rate regimes) were significantly penalized for public debt and entitlement spending, whereas countries with floating regimes were not. Our results speak to the literatures on governments’ institutional commitments and “room to move.”
Topic:
International Political Economy, Financial Markets, Bonds, Exchange Rates, and Euro
Political Geography:
Global Focus

258. Private Insurance, Public Welfare, and Financial Markets: Alpine and Maritime Countries in Comparative-Historical Perspective

Author:
Arjen van der Heide and Sebastian Kohl
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Contemporary capitalist societies use different institutions to manage economic risks. While different public welfare state and financial institutions (banks, capital markets) have been studied across coordinated and liberal market economies, this paper adds the private insurance sector to the study of countries’ security arrangements, following up on Michel Albert’s classical distinction between Alpine and Maritime insurance cultures. Building on extensive new insurance data collections (1880–2017) and institutional analysis, this paper corroborates the long-run historical existence of two worlds of private insurance. Maritime countries (USA, GBR, CAN) developed much bigger life and non-life insurance earlier, with no state-associated insurance enterprises and riskier investments steered towards financial markets. Alpine insurance (AUT, DEU, CHE), by contrast, was initially smaller, with strong state involvement, a significant reinsurance tradition and relatively heavy investments in mortgages and property, due to economic and financial backwardness. We argue that the larger and more “Maritime” the insurance sector, the more it made welfare states liberal and securities markets large. Insurance is thus a hidden factor for countries’ varieties of capitalism and world of welfare. The recent convergence on the Maritime model, however, implies that the riskier and risk-individualizing type of private insurance has added to privatization and securitization trends everywhere.
Topic:
History, Capitalism, Welfare, Insurance, and Financial Development
Political Geography:
Global Focus

259. The Rise and Fall of Social Housing? Housing Decommodification in Long-Run Perspective

Author:
Konstantin A. Kholodilin, Sebastian Kohl, and Sarah Hellmüller
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The comparative study of housing decommodification lags behind classical welfare state research, while housing research itself is rich in homeownership studies but lacks comparative accounts of private and social rentals due to missing comparative data. Building on existing works and various primary sources, this study presents a new collection of up to forty-eight countries’ social housing shares in stock and new construction since the first housing laws around 1900. The interpolated benchmark time series generally describe the rise and fall of social housing across a residual, a socialist, and a Northern-European housing group. The decline was steeper than for the classical welfare state, but the degree of erosion was surprisingly small in some countries where public housing associations remained resilient. Within the broader housing welfare state, social housing correlates positively with rent regulation and allowances, but negatively with homeownership subsidies and liberal mortgage regulation. A multivariate analysis shows that social housing is rather explained by housing shortages and complementarities with rental and welfare policies than by typical welfare state theories (GDP, political parties). Generally, the paper shows that conventional housing typologies are difficult to defend over time and argues more generally for including housing decommodification in welfare state research.
Topic:
Public Policy, Housing, and Welfare State
Political Geography:
Europe and Global Focus

260. No Strings Attached: Corporate Welfare, State Intervention, and the Issue of Conditionality

Author:
Fabio Bulfone, Timur Ergen, and Manolis Kalaitzake
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper contributes to Comparative Political Economy (CPE), developing an analytical concept of corporate welfare. Corporate welfare — the transfer of public funds and benefits to corporate actors with weak or no conditionality — is a prominent form of state-business relations that CPE scholarship regularly overlooks and misinterprets. Such transfers should be understood as a structural privilege of business in a globalized post-Fordist capitalism, and an increasingly common strategy through which states attempt to steward national economic dynamism within a highly constrained range of policy options. However, without a well-developed concept of corporate welfare – premised upon the key criterion of conditionality – studies that identify a “return” of the state in industrial planning misrepresent these transfers to business as a reassertion of state influence and control, rather than a reflection of state weakness and subordination. The paper provides the analytical building blocks to properly conceptualize transfers to business, works out the core challenges for empirical research, and provides empirical illustrations of this burgeoning phenomenon from the fields of unconventional monetary policy, privatization, and urban political economy.
Topic:
Industrial Policy, Political Economy, Privatization, Monetary Policy, and Subsidies
Political Geography:
Global Focus

261. The Instability of Preferences: Uncertain Futures and the Incommensurable and Intersubjective Nature of Value(s)

Author:
Richard Bronk and Jens Beckert
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The default assumption of standard economics is to treat preferences as exogenously ‘given’, consistent with one another, ‘revealed’ by past choices, and context independent. There has been increased interest recently (within behavioural economics) in the impact of inconsistent or irrational preferences and (more broadly) in dynamic and endogenous preferences. This paper builds on these challenges to standard assumptions by analysing the pivotal role of three aspects of preference formation in explaining capitalist dynamics and market instability. These are the constant creation of new preferences and the indeterminacy of choice sets in the context of widespread product innovation; the moral indeterminacy implied by conflicting and incommensurable social norms attaching to market goods where there is no single scale of value and hence no unique set of rational trade-offs; and, lastly, the contingent social and market construction of the product differentiation, quality attribution, and value assessments central to preference formation. The paper concludes by considering implications for economics as a discipline.
Topic:
Economics, Values, Endogenous Factors, and Preference Formation
Political Geography:
Global Focus

262. Framing Climate Change: The Need for a Human Security Perspective

Author:
S. Nanthini and Tamara Nair
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
Climate change has now become the defining issue of the time – and one of the biggest threats to humanity. The recent Intergovernmental Panel on Climate Change (IPCC) report has proven to be a “reality check”, making it clear that climate change is already affecting the world by laying out its various manifestations including temperature increases, sea level rise and changes in rainfall patterns. With the stress placed on the economic, social and political systems that underpin the international system, it is now becoming increasingly clear that climate change is a development, economic, health, and security risk, – essentially a human and national security risk. The impacts of climate change range from the direct, as seen by the increasing frequency and intensity of extreme weather phenomena, to the indirect, such as migration, resource scarcity and conflict – situations in which climate change acts as a ‘threat multiplier’. As such, it is now imperative to take into account the ways in which climate change is discussed, moving the discourse beyond the environmental, scientific and securitisation framings, which have dominated academic and policy discussions, into one that is more humanistic, taking into account the present and emerging vulnerabilities that are being generated through “dynamic social, political, economic, institutional, cultural and technological conditions and their historical legacies”. With the renewed interest in human security as seen in the release of the 2020 Human Development Report and its focus on the Anthropocene, as well as the latest IPCC findings released in August 2021, there is an urgency in focusing on, not only human-induced climate change but also in addressing the impacts of this climate variability on the global populations, especially the millions of vulnerable people that will be directly (and indirectly) affected. This NTS Insight will explore how investigating the impacts of climate change through a human security lens, in addition to the current narratives, might ensure the security and stability of communities in a new climate future.
Topic:
Security, Climate Change, Environment, and Strategic Stability
Political Geography:
Global Focus

263. Annex | ALNAP Lessons Paper: Adapting humanitarian action to climate change

Author:
Véronique de Geoffroy, Paul Knox Clarke, François Grunewald, and Mihir Bhatt
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
Humanitarian agencies need to reflect on the past, learn from the present and actively imagine the near and increasingly threatening future. From excessive consumption to the over-exploitation of natural resources, polluting activities to large-scale deforestation, humans have already dramatically changed the Earth’s climate and environment. As a result, we are experiencing more frequent and more intense weather events, the humanitarian consequences of which are major. Droughts, flooding and tropical storms cause death, disease, destruction and large-scale population displacement. Public health emergencies are already increasing because of these changes. Conflicts and conflict situations may increase, as may the resulting human migration and displacement. Humanitarian actors working on the ground with climate-related disasters are well placed to observe the intensification of climate-related effects and the increasing complexity of extreme weather events in all regions of the world, including regions where such events were previously rare or unknown. This annex accompanies the ALNAP Lessons Paper: Adapting humanitarian action to climate change, which aims to inform the work of humanitarian practitioners in the face of future climate-related disasters.
Topic:
Climate Change, Natural Disasters, Crisis Management, and Humanitarian Organizations
Political Geography:
Global Focus

264. Zombies at Large? Corporate Debt Overhang and the Macroeconomy

Author:
Oscar Jorda, Martin Kornejew, Moritz Schularick, and Alan Taylor
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
What are the macroeconomic consequences of business credit booms? Are they as dangerous as household credit booms? If not, why not? We answer these questions by collecting data on non- financial business liabilities (primarily bank loans and corporate bonds) for 17 advanced economies over the past 150 years. Unlike household credit, business credit booms are rarely followed by macroeconomic hangovers. Data on debt renegotiation costs—instrumented by a country’s legal tradition—show that frictions to debt resolution make recessions deeper and longer—an important factor in explaining the differences with household credit booms.
Topic:
Debt, Economics, Macroeconomics, and Corporations
Political Geography:
Global Focus

265. Central Banks Caught Between Market Liquidity and Fiscal Disciplining: A Money View Perspective on Collateral Policy

Author:
Jakob Vestergaard and Daniela Gabor
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Despite much attention to unconventional monetary policies after the financial crisis, the collateral policies of central banks are rarely discussed. And when they are, the haircuts applied to assets pledged to access central bank liquidity tend not to be analyzed. An exception to these trends is the recent work by Nyborg (2017), who argues that the collateral policies adopted by the European Central Bank (ECB) aggravated the sovereign debt crisis and put the survival of the euro at risk. Taking our point of departure in the money view literature (Mehrling 2011), we argue however that Nyborg’s critique of the ECB’s crisis response is misguided and that his proposal to deepen and reinforce the ECBs role in the fiscal disciplining of member states would be procyclical and destabilizing. Through our analysis of Nyborg’s work and the ECBs crisis response, we identify core principles for countercyclical collateral policies suitable for market-based financial systems.
Topic:
Monetary Policy, Financial Crisis, Finance, and Banking
Political Geography:
Global Focus

266. Can Panel Data Methodologies Determine the Impact of Climate Change on Economic Growth?

Author:
Richard A. Rosen
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Several major papers have been published over the last ten years claiming to have detected the impact of either annual variations in weather or climate change on the GDPs of most countries in the world using panel data-based statistical methodologies. These papers rely on various multivariate regression equations which include the annual average temperatures for most countries in the world as one or more of the independent variables, where the usual dependent variable is the change in annual GDP for each country from one year to the next year over 30-50 year time periods. Unfortunately, the quantitative estimates derived in these papers are misleading because the equations from which they are calculated are wrong. The major reason the resulting regression equations are wrong is because they do not include any of the appropriate and usual economic factors or variables which are likely to be able to explain changes in GDP/economic growth whether or not climate change has already impacted each country’s economy. These equations, in short, exhibit suffer from “omitted variable bias,” to use statistical terminology.
Topic:
Climate Change, Economics, Economic Growth, and Methodology
Political Geography:
Global Focus

267. Asset Prices Under Knightian Uncertainty

Author:
Roman Frydman, Søren Johansen, Anders Rahbek, and Morten Tabor
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We extend Lucas’s classic asset-price model by opening the stochastic process driving dividends to Knightian uncertainty arising from unforeseeable change. Implementing Muth’s hypothesis, we represent participants’ expectations as being consistent with our model’s predictions and formalize their ambiguity- averse decisions with maximization of intertemporal multiple-priors utility. We characterize the asset-price function with a stochastic Euler equation and derive a novel prediction that the relationship between prices and dividends undergoes unforeseeable change. Our approach accords participants’ expectations, driven by both fundamental and psychological factors, an autonomous role in driving the asset price over time, without presuming that participants are irrational.
Topic:
Economics, Models, and Price
Political Geography:
Global Focus

268. Thriving on Uncertainty: COVID-19-Related Opportunities for Terrorist Groups

Author:
Abdelhak Bassou and Youssef Tobi
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
The COVID-19 pandemic has had a cataclysmic impact on all aspects of the functioning of our world. The relevance of the possibility of the spread of a global virus with the spread of terrorism is not immediately obvious as it is difficult for a direct causal link to be scientifically established. However, taking into consideration how state responses and pre-existing socioeconomic grievances can be impacted by the COVID-19 pandemic can lead to innovative findings on how terrorist groups have adapted and conducted their activities during the pandemic. Analysing how the response of states impacts socioeconomic grievances and how it interacts with terrorist activities, the authors have found that the pandemic has impacted the operational and ideological frameworks of terrorist groups in multiple ways. COVID-19 was interpreted as an opportunity to spread extremist propaganda and ideology. The pandemic was presented as an act of God, punishing the ungodly and weakening enemy governments. In terms of propaganda, this virus was presented as a soldier of Allah and was used for online recruitment strategies. Concerning the operational front, poor state responses to the pandemic may have reinforced the legitimacy of terrorist groups among populations as they were continuously used as arguments advancing the agenda of these groups in their areas of intervention. In the first chapter, poor state responses and their interactions with terrorists’ activity was analysed especially in the Sahel region where the longstanding fragilities of states have been exacerbated by the pandemic. However, at this stage, a clear correlation between COVID-19 and the increase of terrorist activity is yet to be established. This property of COVID-19 as a crisis intensifier is a strong argument in the last chapter focusing on the Maghreb region: taking into account the various databases and academic viewpoints, this chapter examines the link between the growing popular discontent of the populations of Maghreb countries and the surge of the COVID-19 pandemic. As in the Sahel region, a potent and clear connection between COVID-19 and a possible increase of terrorist activities was contested. The role of state responses and their effect on the surge of terrorist activity was also addressed, especially in the second chapter of this study: for instance, when examining the changing recruitment strategies of terrorist groups in the Mashreq region, strengthening the resilience of the state and society was the viable strategy for countering violent extremism. For the European Union (EU) to achieve this endeavour, this study argues that the EU’s efforts need to work on remediating the vulnerability of fragile groups within societies and to consider the core governance fragilities leading to the surge of terrorist activities in the regions covered, namely the Sahel, the Mashreq and the Maghreb.
Topic:
Security, Terrorism, Pandemic, and COVID-19
Political Geography:
Global Focus

269. Strengthening Regional Policy Frameworks to Better Respond to Environmental Migration: Recommendations for the UK Government

Author:
Amelia Dal Pra, Mariam Traore Chazalnoel, and Helen Dempster
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Bay of Bengal, the Sahel, and Small Island Developing States (SIDS) are especially vulnerable to the impacts of slow-onset climate events resulting from climate change. Global temperature warming is leading to a dramatic rise in sea levels, which will lead to coastal erosion and land loss across SIDS and the Bay of Bengal. Such warming will also contribute to increasing desertification and water scarcity issues in the Sahel. This environmental damage is irreversible and may seriously threaten economies as well as the daily lives of communities. Without strong policy interventions to bolster in-situ resiliency and increase climate change adaptation and mitigation, including migration, the regions most vulnerable to climate impacts might experience major human security and security crises. This paper provides an analysis of some of relevant regional frameworks that could be useful in addressing environmental migration across these three regions. It concludes that high-income countries such as the UK should do two things: provide financial and technical support to bolster climate adaptation in regions uniquely vulnerable to slow-onset climate events; and support the establishment and / or implementation of regional migration frameworks and free movement agreements (FMAs) that can potentially offer safe, orderly, and regular migration pathways to those affected by the impacts of slow-onset climate events.
Topic:
Climate Change, Environment, Regional Cooperation, and Regionalism
Political Geography:
Global Focus

270. How Can Multilateral Organizations Strengthen Global Data Governance Practices? Roundtable Summary

Author:
Michael Pisa and Ugonma Nwankwo
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This brief is based on a roundtable hosted by CGD as part of the Governing Data for Development project, which explores how governments can use data to support innovation, development, and inclusive growth while protecting citizens and communities against harm. The views expressed here are those of the participants and do not necessarily represent the views of CGD staff. For other briefs in the series, as well as more on the project, visit cgdev.org/governing-data. Cross-border data flows are governed through a patchwork of complex, overlapping arrangements and trade agreements. The absence of a more systematic approach to data governance at the global level may make it harder for low- and middle-income countries to participate in the global digital economy and develop their own frameworks for governing the use of data in a responsible manner. It also leaves them with limited leverage in negotiations with both Big Tech companies and wealthier jurisdictions. This meeting is the third in a series of private roundtables convened by the Center for Global Development aimed at exploring the relationship between data governance and economic development. The first event examined whether current approaches to data protection and privacy are a good fit for resource-constrained countries. The second explored whether evolving digital trade rules support or hinder economic development. This third roundtable explored the role and limitations of multilaterals in promoting better data governance. This document summarizes key takeaways from the meeting, including the remarks of four keynote speakers and themes raised in a discussion among 30 experts, who are listed in the appendix. The roundtable was moderated by Pam Dixon, founder and executive director of the World Privacy Forum, and co-chair of the working group for CGD’s Governing Data for Development project.
Topic:
International Cooperation, Governance, Digital Economy, and Multilateralism
Political Geography:
Global Focus

271. Who’s Responsible for Climate Change? New Evidence Based on Country-Level Estimates of Climate Debt

Author:
Benedict Clements, Sanjeev Gupta, and Jianhong Liu
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In this paper, we introduce the concept of climate debt and provide country-level estimates through 2035 under a business-as-usual scenario. These estimates can help inform the debate on climate change by providing a clear view of which countries have (until the present) contributed the most to climate change, as well as the likely path for climate debt by country over the next 15 years. We then discuss the implications for carbon emissions if the G-20 countries and EU were to adopt either of the two policy options proposed in recent months: the first by President Biden for the US and the other by the EU for its member countries. The implications for fiscal policy are that beyond the need to keep public debt at sustainable levels, countries will also need to allocate funds for expected increases in pension and health spending associated with aging populations. As a result, there may be little room for new expenditures (such as green infrastructure or subsidies for clean energy) to reduce the growth of climate debt. Countries could turn to the revenue side, in particular greater taxation of energy with carbon taxes. This would have the advantage of reducing emissions while also helping countries to fund spending on green infrastructure.
Topic:
Climate Change, Energy Policy, Environment, Humanitarian Response, and Green Transition
Political Geography:
Global Focus

272. Meeting the Global Health Challenge to Reduce Death and Disability from Alcohol, Tobacco, and Sugar-Sweetened Beverage Consumption with Corrective Taxes

Author:
Chris Lane and Vinayak Bhardwaj
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Behind the daily trauma of COVID-19 lies a larger and longer-lasting global health challenge resulting from the consumption of tobacco, alcohol, and sugar-sweetened beverages. Using a sample of 25 large advanced and emerging market economies accounting for three-quarters of global GDP, we show that about 60 million productive life years were lost every year in 2000, 2010, and 2019 from death and disability attributable to alcohol, tobacco, and diets high in sugar-sweetened beverages. Using the cost-of-illness framework, the economic value of these lost productive years in 2019 is approximately $2.1 trillion in our country sample (in 2017 purchasing power parity dollars [PPP$]). We show that over a 20-year period, a higher tax effort is associated with larger reductions in economic costs. We also show that total corrective taxes for all the products under investigation fall far short of the indirect costs of consumption in all countries. We conclude that all advanced economies and emerging markets could reap substantial macroeconomic benefits from better health by raising corrective taxes on alcohol and tobacco and by introducing corrective taxes on sugar-sweetened beverages.
Topic:
Health, Disability, Tax Systems, Health Crisis, and Addiction
Political Geography:
Global Focus

273. Navigating the Straits: Pull Financing for Climate and Development Outcomes

Author:
Ranil Dissanayake
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
An increasing share of official development assistance is being used for climate-related activities. This trend is continuing despite the lack of comprehensive cost-effectiveness evidence to guide spending decisions and continuing concerns that few applications are effective or efficient mechanisms for either climate or development outcomes. This represents both a waste of scarce resources and a missed opportunity. This paper proposes that a well-designed pull financing mechanism, which identifies specific problems for which it will pay a pre-specified price for solutions that can scale up, has the potential to navigate these problems. When they work, a pull instrument can solve problems at scale at low cost by incentivizing private innovators to produce a socially beneficial product that people want to buy and use. However, the design challenges associated with them are not trivial: firstly, the identification and selection of technologies or problems for which the pull financing facility would be a sufficiently large portion of the market to shift incentives for innovators or producers (for technologies that exist but have not been taken up widely yet); and secondly, the ability to design contracts that incentivize socially beneficial innovation that are bought and used. This paper sets out the case for pull financing for climate and development activities, the challenges that need to be addressed to do it well, criteria for judging potential applications of pull financing and an initial indication of some sectors to which pull financing may be applied.
Topic:
Climate Change, Development, Environment, and Finance
Political Geography:
Global Focus

274. How Do Humanitarian Donors Make Decisions, and What Is the Scope for Change?

Author:
Rose Worden and Patrick Saez
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
n this policy paper we review donor responses to a survey and interviews to probe the effects of the broader political and economic context in which donors operate, and identify internal constraints on humanitarian funding, planning, and making allocative decisions. We identify and highlight perceived and real constraints with which donors contend when making decisions on how to allocate limited resources. The way humanitarian donors fund is key to system-wide efficiency, effectiveness, and reforms in the humanitarian system. Donors face competing priorities when engaging in humanitarian response. They care about retaining control, must rely on limited information sources to inform decisions, and balance their approaches with other foreign policy objectives. Institutional legacies, trust, and visibility for their efforts also matter to donors. These factors have shaped how donors have approach their current commitments to Grand Bargain reforms as donors prepare to engage with the newest iteration of reform—the Grand Bargain 2.0.
Topic:
Humanitarian Aid, Reform, Institutions, and Donors
Political Geography:
Global Focus

275. Are Development Finance Institutions Good Value for Money?

Author:
Paddy Carter
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Finance institutions take money from foreign aid budgets to invest in private enterprises. How much should they be given? We can make some progress on that question by looking at the return on investment in the form of higher real incomes for workers and customers, and comparing that to a cash transfer benchmark. There is considerable uncertainty, but what evidence we have suggests returns on investment are in a range that compares well to that benchmark. There is also a diversification argument that because we don’t know which of the things that aid can finance will ultimately prove most important for poverty eradication, aid allocation should hedge its bets. A low single digit percentage of aid allocated to increase the quantity and quality of private investment in low- and middle-income countries seems reasonable.
Topic:
Development, Foreign Aid, Finance, Investment, and Institutions
Political Geography:
Global Focus

276. Valuing Climate Liabilities: Calculating the Cost of Countries’ Historical Damage from Carbon Emissions to Inform Future Climate Finance Commitments

Author:
Lee Robinson and Ian Mitchell
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A central commitment of action on climate is the promise of “developed countries” to jointly mobilize $100 billion of climate finance per year by 2020 (and through to 2025), formalised at the UN climate change conference in 2010 (COP16). Five years later, the Paris Agreement reaffirmed this commitment and promised a new goal after 2025 “from a floor of USD 100 billion per year.” We propose an approach for calculating financial climate liabilities for each country based on their historical CO2 emissions, using the idea of an externality: a social cost that has not been borne by the agent whose actions produced it. The paper follows earlier work on calculating carbon debts (e.g., Kunnas, 2014) which we update with recent and authoritative research on carbon pricing methods. We also adjust for awareness, calculating the accruing of liabilities only from the time that countries knew that their emissions were harmful. We present several scenarios adjusting this and other assumptions. The main scenario produces a clearly quantified liability for each country and a total carbon liability to the world of $34 trillion, or $4,500 per capita. If this liability was used to set climate finance goals, it would suggest OECD countries would need to contribute $190 billion a year to 2100. The analysis also highlights that other industrialised countries, notably China and Russia, have also built-up substantial liabilities and should therefore also contribute to future climate finance goals.
Topic:
Climate Change, Energy Policy, Environment, Carbon Emissions, and Green Transition
Political Geography:
Global Focus

277. Some Unpleasant ODA Arithmetic

Author:
Ranil Dissanayake and Atousa Tahmasebi
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Official development assistance is supposed to be designed to prioritise the economic development and welfare of developing countries. The OECD’s Development Assistance Committee is a club of wealthy donor countries which collaborate to set rules and norms to this effect. However, digging into the official data submitted by donors to the OECD reveals some unpleasant truths. We use data on every funding line reported by donors to the OECD between 2006 and 2019 to investigate the pattern and distribution of commitments and disbursements of ODA to developing countries, and discover that ODA is targeted poorly within the group of eligible developing countries; that this group of eligible countries is gradually expanding to include more relatively wealthy places; that aggregate ODA flows are organized and structured sub-optimally; and that ODA responds more to arbitrary income classifications than it should. We suggest informational and incentive reforms in response. These findings also suggest limits to what realistic reform of ODA can achieve, and, consequently, the importance of non-aid development policy for outcomes in developing countries.
Topic:
Development, International Cooperation, Foreign Aid, and Welfare
Political Geography:
Global Focus

278. Effective Humanitarian Governance

Author:
Patrick Saez, Jeremy Konyndyk, and Rose Worden
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper argues that humanitarian system reform should extend to governance. Governing institutions—such as member state boards of multilateral organizations, and NGO boards of directors—have tremendous influence over the strategic direction of individual institutions and the sector writ large. But governing bodies of humanitarian organizations and system-wide governance are exclusive, organizing power and influence around a few governments, organizations, and individuals. There are few entry points for aid agencies’ downstream clients, or for host governments with the willingness and capacity to take the lead in disaster response. Moving toward a sector where mission effectiveness is measured through partnerships rather than agency capabilities, and outcomes rather than fundraising totals, will depend on governance bodies that promote and monitor those priorities. This will require more direct representation of the views of communities affected by crises in governing bodies, in the relationships between donors and their partners, and in supporting national and local humanitarian governance in countries that have demonstrated their ability to lead the response to disasters impartially. Multistakeholder platforms at the global and country level should be established to align behind common needs assessments and policy directions, and to mobilize and align resources accordingly. Finally, assessing collective effectiveness should become an independent function systematically deployed alongside humanitarian operations, directly informing governing structures, donors, and the public.
Topic:
Governance, Institutions, NGOs, and Humanitarian Crisis
Political Geography:
Global Focus

279. Operationalizing Climate Adaptation at the US International Development Finance Corporation: The Case for an Agriculture-Led Agenda in Low-Income Countries

Author:
Clemence Landers, Jocilyn Estes, and Scott Morris
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The US International Development Finance Corporation (DFC) could be well placed to lead among development finance institutions (DFIs) on agriculture adaptation to climate change. With its mandate to support private investment in developing country markets, overcoming barriers to investment in agricultural adaptation—where agricultural growth is an estimated two to four times more effective at reducing poverty than growth originating from other sectors—is exactly the type of activity DFC is intended to pursue. Yet, DFC is paradoxically prone to the same investment incentives and disincentives as private investors with an investment portfolio that tends to favor lower risk, higher deal size (and lower overhead) transactions. So, while global estimates for adaptation investments financing needs total close to $140-$300 billion by 2030, a fraction of the global mitigation needs measured in the trillions of dollars, the barriers to project level investment in agriculture adaptation and resilience raises the risk that DFC will continue to favor larger and lower risk mitigation investments in more established markets. This paper reviews DFC’s agriculture portfolio, and based on this review, proposes elements of an agriculture strategy that can overcome barriers to adaptation and resilience investments in the most climate vulnerable markets.
Topic:
Agriculture, Climate Change, Environment, and Finance
Political Geography:
Global Focus

280. The Case for Transparency in Power Project Contracts: A Proposal for the Creation of Global Disclosure Standards and PPA Watch

Author:
Mohamed Rali Badissy, Charles Kenny, and Todd Moss
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
he purpose of a nation’s power sector is to deliver reliable electricity at the lowest cost and for the greatest benefit. At the heart of any private electricity generation project is a Power Purchase Agreement (PPA), a contract that contains key provisions such as price, payment stipulations, and obligations by the offtaker utility and/or host-government. Despite their significant effects on service quality and public finances, these contracts are often negotiated and signed in secret, with even the most basic terms shielded from the citizenry. This opacity has created risks and, in a growing number of cases, contributed to costly and damaging outcomes, such as overpayment, overcapacity, large debts, and grid instability. Drawing on examples from enhanced transparency in public budgets, sovereign debt, and extractive industries, we propose that governments agree to publish PPAs with any public sector obligation and that funders of private generation projects also agree to minimum disclosure standards. The objective is to create incentives for better practice, improve governance of the power sector, reduce transaction costs, and ultimately, to deliver cheaper and more reliable power for people and businesses. Transparency of PPAs would support the efforts of government policymakers and planners, investors, and development finance institutions to accelerate energy market development and to reap the benefits of open competition. Greater disclosure would also provide crucial information for citizens to hold their own governments accountable for the contracts they sign on behalf of the public.
Topic:
Economics, Energy Policy, Transparency, Electricity, and Purchasing Power
Political Geography:
Global Focus

281. A Review of Multilateral Development Banks’ Investments in Childcare

Author:
Megan O'Donnell, Kelsey Ross, and Shelby Bourgault
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The COVID-19 pandemic has led to an unprecedented increase in unpaid care work all over the world, causing women to leave the workforce, reversing decades of progress on gender equality, and resulting in increased focus and empathy around the global childcare crisis. Recognizing a gap in the evidence regarding multilateral development banks’ current (and historical) investments in childcare solutions, in this paper we seek to establish a baseline, exploring the extent to which MDBs have invested in childcare over time, across geographies, and through various sectors and activities. Using project data from eight multilateral development banks’ project databases, we compiled all projects with a childcare component from 2000 to June 2021. Our analysis explores best practices across institutions, identifies gaps and areas for improvement, and makes recommendations for how MDBs can increase and improve investments in childcare.
Topic:
Development, Multilateralism, Banks, Pandemic, COVID-19, and Childcare
Political Geography:
Global Focus

282. Financing the Humanitarian Public Good: Towards a More Effective Humanitarian Financing Model

Author:
Emmanuel Saez, Jeremy Konyndyk, and Rose Worden
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The international humanitarian system provides a global public service but is financed on a voluntary basis. The way official donor funding is mobilised and allocated is unpredictable and haphazard, reducing efficiency and effectiveness. Donors should overcome the collective action problem that is inhibiting change and reach a critical mass of finance delivered through collective mechanisms. This paper outlines the case for - and obstacles against – change. It suggests three ways to make some progress: a multi-year common replenishment model for protracted and predictable crises; rebalancing country-level pooled mechanisms; and aligning core funding to agencies with agreed core functions.
Topic:
Humanitarian Intervention, Humanitarian Crisis, Donors, and Public Goods
Political Geography:
Global Focus

283. Improving Performance in the Multilateral Humanitarian System: New Models of Donorship

Author:
Patrick Saez, Lewis Sida, Rachel Silverman, and Rose Worden
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The humanitarian system has undergone three series of reforms over the past couple of decades, with mixed results. Multilateral agencies play a central role in the system. Faced with the prospect of growing humanitarian needs as a result of conflict, climate change and pandemics, the elusive quest to improve their performance continues. Yet while donors agree on the benefits of a strong multilateral system to respond to humanitarian crises, they diverge when it comes to measuring performance and providing financial incentives. A political economy defined by co-dependence and information asymmetry complicates the picture. Donors should unbundle their funding of different multilateral functions and measure their performance accordingly. Commonly agreed core functions and capacities should be supported by a greater proportion of core rather than earmarked funding. Performance of these core functions should be measured using multi-donor assessments and functional reviews. Independent measurement of outcomes should be linked to pooled mechanisms that would channel a significantly greater proportion of funding earmarked to specific crises.
Topic:
Finance, Multilateral Relations, Multilateralism, and Donors
Political Geography:
Global Focus

284. A Path to Resiliency: Mitigating the Impacts of COVID-19 on Essential Medicines Supply Chains

Author:
Anthony McDonnell, Elizabeth Pisani, and Somya Singhvi
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
COVID-19 has put a spotlight on health product supply chains, highlighting the challenges in multiple steps in the global supply chain. This paper seeks to understand the impact of COVID-19 on the supply chain of a subset of essential medicines. It identifies the main categories of blockages in the global supply chain created by COVID-19, then uses data on trade flows, wholesalers, and pharma companies, and from surveys, to track the impact. There was significant short-term disruption to manufacturing caused by COVID-19. Surveys, pharmacy, and export data indicate that COVID-related disruptions impacted the supply of essential medicines, but this varied greatly by markets and product. The paper highlights that (1) data-driven approaches should be considered to make supply chains more robust, (2) solutions must account for the political and institutional landscape, (3) price surges benefit the wealthiest, and (4) local solutions are often needed to manage global shocks. More research is needed, particularly into how to obtain granular data to track supply shocks in real time? How do we increase surge capacity? Is it possible to improve procurement practices through pooled procurement, where applicable? And can pharmaceutical production be diversified, with products produced regionally to limit the risk of disruption?
Topic:
Pandemic, Resilience, COVID-19, and Medicine
Political Geography:
Global Focus

285. Ethical Recruitment of Health Workers: Using Bilateral Cooperation to Fulfill the World Health Organization’s Global Code of Practice

Author:
Michael Clemens and Helen Dempster
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In a bid to better manage the increasing migration of health workers, in 2010 the World Health Organization (WHO) adopted its Global Code of Practice on the International Recruitment of Health Personnel. The Code has been misinterpreted by many as banning all recruitment from the 57 countries it deemed to have a “critical shortage” of health workers. But that is neither what the WHO intended, nor what the Code says. Recruitment from these countries was always allowed, even encouraged, as long as it was conducted under a mutually beneficial government-to-government agreement. In this policy paper, we outline how the WHO defined a “critical shortage” of health workers, both for the original Code and for its newly published Health Workforce Support and Safeguards List. The paper then goes onto explore how countries of migrant destination and origin can (and should) design ethical and sustainable health worker migration partnerships that fulfil the requirements of the Code.
Topic:
International Cooperation, Health Care Policy, Ethics, and Labor Market
Political Geography:
Global Focus

286. Unpacking Gender Gaps and Data Gaps in Public Sector Employment and Pay

Author:
Ugonma Nwankwo, Megan O'Donnell, and Charles Kenny
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
We look at available sources to ask (i) Where is data available on employment and wages allowing for comparisons between women and men, and the public and private sectors? (ii) How do women’s employment, compensation, and seniority compare with men’s in the public and private sectors? (iii) How do gender gaps vary by countries’ income level, education levels, and other factors? What are the policy implications of the data we analyze? (iv) Which countries’ efforts can be modeled by others, and how else can global gender gaps in employment and compensation be narrowed? We suggest the Open Government Partnership as a promising platform through which governments can commit to increased transparency around disaggregated employment and wage data, in turn improving policy decision-making aimed at closing gender gaps (or those rooted in other forms of inequality and discrimination).
Topic:
Labor Issues, Women, Inequality, Feminism, Data, and Gender
Political Geography:
Global Focus

287. How Do Development Agencies Support Climate Action?

Author:
Rachael Calleja
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper explores how development agencies are integrating climate action into development portfolios in response to calls to scale-up climate engagements in alignment with both the Sustainable Development Goals and the Paris Agreement. Using data compiled on all 30 members of the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD-DAC), this paper maps and analyzes trends in both the scale and usage of official development assistance allocated to support climate activities and the tools and approaches used to integrate climate across development activities. This paper shows that while climate has become a key priority for development agencies, there remains scope for deepening integration by improving monitoring and reporting of climate and development results, integrating climate considerations across the life cycle of projects, and searching for complementarities across agencies.
Topic:
Climate Change, Development, Environment, and Green Transition
Political Geography:
Global Focus

288. Covid–19 and the media

Author:
Maxim Ananyev, Michael Poyker, and Yuan Tian
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
This chapter describes the growing literature on the effects of media on Covid-19-related outcomes. First, we discuss the papers related to traditional media. In particular, we discuss the literature that studies the effect of public messages, misinformation, and slanted media on health behaviors and health outcomes. Second, we discuss papers that highlight the role of social media content and social media users’ networks in the spread of information, formation of social norms, and transmission of diseases. We conclude with a discussion of how the pandemic, in turn, shapes the media.
Topic:
Media, Public Health, COVID-19, and Misinformation
Political Geography:
Global Focus

289. Politicians' neighbourhoods: Where do they live and does it matter?

Author:
Olle Folke, Linna Martén, Johanna Rickne, and Matz Dahlberg
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
This paper studies the political economy of local politicians' neighborhoods. We use detailed population-wide data on the location of politicians’ and citizens' homes and their socioeconomic traits. We combine this information with neighborhood-level data on building permits and proposals to close schools. A descriptive analysis uncovers that politicians live in neighborhoods with more socio-economically advantaged people and more of their own party’s voters. Next, we analyze whether having politicians in a neighborhood reduces the likelihood that local public "bads'' are placed there. This analysis compares home neighborhoods for politicians with different degrees of political power (ruling majority or opposition) and where power was won in a close election. We find negative effects on approved building permits for multifamily homes and proposals to close schools. This result is most likely explained by undue favoritism. We conclude that local politicians live in advantaged neighborhoods that they shield from local public bads.
Topic:
Political Economy, Inequality, Geography, and Politicians
Political Geography:
Global Focus

290. The political economy of pandemic preparedness and effectiveness

Author:
Cullen S. Hendrix
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The success of countries in the Organization for Economic Cooperation and Development (OECD) in controlling the COVID-19 pandemic has varied greatly. Explanations for the differences fall into four broad categories: political/economic, cultural/social, demographic/geographic, and policy-oriented. This paper uses Bayesian model averaging to assess the explanatory power of 21 potential covariates. It shows that standard political economy variables that predict greater investment in public health, such as GDP per capita and level of democracy; both general and pandemic-specific measures of government effectiveness; and demographic factors that predict increased vulnerability, such as the share of population that is elderly or obese, do not explain the differences in outcomes. The key factors appear to have been interdictability (the ability to tightly control borders and effectively restrict or monitor entrants at a limited number of entry ports), the early adoption of stronger international travel restrictions, and a female head of government.
Topic:
Political Economy, Crisis Management, COVID-19, and OECD
Political Geography:
Global Focus

291. How COVID-19 medical supply shortages led to extraordinary trade and industrial policy

Author:
Chad P. Bown
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Early in the COVID-19 pandemic, a global shortage of hospital gowns, gloves, surgical masks, and respirators caused policymakers around the world to panic. This paper examines international trade in this personal protective equipment (PPE) during the crisis, with a focus on China, the European Union, and the United States. As the pandemic first hit, China increased imports and decreased exports of PPE, removing considerable quantities of supplies from global markets. For the European Union and United States, the decrease in their imports from China was not immediately replaced by increased trade from other foreign suppliers. Early shortages led to EU and US export controls on their own, domestically produced PPE and other extraordinary policy actions, including a US effort to reserve for itself supplies manufactured in China by a US-headquartered multinational. By April 2020 China’s exports had mostly resumed, and over the rest of the year its export volumes of some products surged, more than doubling compared to pre-pandemic levels. But China’s export prices also skyrocketed and remained elevated through 2020, reflecting severe and continued shortages. This paper documents these facts. It also explores these and other government actions, such as US trade war tariffs and the emergence of US industrial policy in the form of over $1 billion of subsidies to build out its domestic PPE supply chain, as well as potential lessons for future pandemic preparedness and international policy cooperation.
Topic:
Industrial Policy, Economy, Trade, COVID-19, Health Crisis, and Supply
Political Geography:
Global Focus

292. How COVID-19 vaccine supply chains emerged in the midst of a pandemic

Author:
Chad P. Bown
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Many months after COVID-19 vaccines were first authorized for public use, still limited supplies could only partially reduce the devastating loss of life and economic costs caused by the pandemic. Could additional vaccine doses have been manufactured more quickly some other way? Would alternative policy choices have made a difference? This paper provides a simple analytical framework through which to view the contours of the vaccine value chain. It then creates a new database that maps the COVID-19 vaccines of Pfizer/BioNTech, Moderna, AstraZeneca/Oxford, Johnson & Johnson, Novavax, and CureVac to the product- and location-specific manufacturing supply chains that emerged in 2020 and 2021. It describes the choppy process through which dozens of other companies at nearly 100 geographically distributed facilities came together to scale up global manufacturing. The paper catalogues major pandemic policy initiatives—such as the United States' Operation Warp Speed—that are likely to have affected the timing and formation of those vaccine supply chains. Given the data, a final section identifies further questions for researchers and policymakers.
Topic:
Vaccine, COVID-19, Health Crisis, and Supply Chains
Political Geography:
Global Focus and United States of America

293. Low inflation bends the Phillips curve around the world: Extended results

Author:
Jami Forbes, Joseph E. Gagnon, and Christopher G. Collins
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper revises and extends PIIE Working Paper 20-6. It continues to find strong support for a Phillips curve that becomes nonlinear when inflation is "low"—which our baseline model defines as less than 3 percent. The nonlinear curve is steep when output is above potential (slack is negative) but flat when output is below potential (slack is positive) so that further increases in economic slack have little effect on inflation. This finding is consistent with evidence of downward nominal wage and price rigidity. When inflation is high, the Phillips curve is linear and relatively steep. These results are robust to placing the threshold between the high and low inflation regimes at 2, 3, or 4 percent inflation or for a threshold based on country-specific medians of inflation. In this nonlinear model, international factors play a large role in explaining headline inflation (albeit less so for core inflation), a role that has been increasing since the global financial crisis.
Topic:
Economics, Financial Crisis, Inflation, and Philips Curve
Political Geography:
Global Focus

294. Dollar not so dominant: Dollar invoicing has only a small effect on trade prices

Author:
Joseph E. Gagnon and Madi Sarsenbayev
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper estimates and tests four models of the effects of exchange rate changes on export prices. It supports the Goldberg and Knetter (1997) canonical result that exporters adjust their prices by about half of any movement in exchange rates. A new twist is that exchange rate movements against importing countries account for only three-fifths of this price adjustment, while exchange rate movements against a dominant currency account for the other two-fifths. The dominant currency is the euro in Europe and Africa and the US dollar in Asia and the Western Hemisphere. The recent claim that the dollar is the most important driver of export prices (Gopinath et al. 2020) is shown to be valid only for the smallest exporting economies. For the bulk of international trade, the extra effects of the dollar (or the euro) beyond their effects as exporter or importer currencies are relatively modest.
Topic:
Foreign Exchange, Exports, Currency, Trade, and Dollar
Political Geography:
Global Focus

295. Paraguay's Compliance With The Inter-American Human Rights System

Author:
Aníbal Pérez-Liñán, Madeline Soiney, and Andrés Hernández
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
Why do new democracies comply with international human rights obligations? We analyze Paraguay’s compliance with all reparation measures requested by the Inter-American Human Rights System over the past two decades. In contrast to most studies, which focus on reparation measures ordered by a single organ in the system, our study covers all orders resulting from friendly settlements, reports published by the Inter-American Commission on Human Rights, and rulings by the Inter-American Court of Human Rights. We provide a novel classification of human rights cases, and evaluate three competing explanations for compliance: legal factors, international pressures, and domestic political will. Our analysis of 1,426 reparation-years underscores the importance of changes in political will over time.
Topic:
Human Rights, Democracy, Rule of Law, and Institutions
Political Geography:
Latin America, Paraguay, and Global Focus

296. Free Trade Agreements Have Limited Impact (Because Manufactured Goods are a Perfect Market)

Author:
David Henig and Anna Guildea
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Free Trade Agreements between two or more countries or parties have been the centrepiece of international trade policy since the formation of the World Trade Organisation 25 years ago. Since 1995, no major round of multilateral trade liberalisation has been concluded, but there has been a sharp rise in the number of bilateral trade agreements. While some of these agreements have real consequences for trade in services and some administrative rules for trade, most of them do not because they focus mainly on tariffs on industrial and agricultural goods. Yet the economic gains from these reductions are now extremely limited. In fact, it is now difficult to improve the global market in goods by cutting tariffs.
Topic:
Globalization, World Trade Organization, Global Markets, Trade Liberalization, and Free Trade
Political Geography:
Global Focus

297. Services Trade Needs to be Taken as Seriously as Goods Trade

Author:
Anna Guildea and David Henig
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Services constitute at least a quarter of total trade. Between 2009 and 2019 global services trade increased by nearly 50%, compared to 18% for goods trade. Yet it is rarely taken as seriously as goods in global trade policy discourse. This is a problem when making the case for trade.
Topic:
Globalization, Services, Trade, and WTO
Political Geography:
Global Focus

298. Why Do Couples and Singles Save During Retirement?

Author:
Mariacristina De Nardi, Eric French, John Bailey Jones, and Rory McGee
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
While the savings of retired singles tend to fall with age, those of retired couples tend to rise. We estimate a rich model of retired singles and couples with bequest motives and uncertain longevity and medical expenses. Our estimates imply that while medical expenses are an important driver of the savings of middle-income singles, bequest motives matter for couples and high-income singles, and generate transfers to non-spousal heirs whenever a household member dies. The interaction of medical expenses and bequest motives is a crucial determinant of savings for all retirees. Hence, to understand savings, it is important to model household structure, medical expenses, and bequest motives.
Topic:
Retirement, Savings, and Expenses
Political Geography:
Global Focus

299. Wages, Skills, and Skill-Biased Technical Change: The Canonical Model Revisited

Author:
Audra J. Bowlus, Lance Lochner, Chris Robinson, and Edna Suleymanoglu
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
The canonical supply–demand model of the wage returns to skill has been extremely influential; however, it has faced several important challenges. Several studies show that the standard approach sometimes produces theoretically wrong-signed elasticities of substitution, yields counterintuitive paths for skill-biased technical change (SBTC), and does not account for the observed deviations in college premia for younger vs. older workers. This paper shows that these failings can be explained by mis-measurement of relative skill prices and supplies (based on standard demographic composition-adjustments) and by inadequate ad hoc functional form assumptions about the path for SBTC. Improved estimates of skill prices and supplies that account for variation in skill across cohorts within narrowly defined groups help explain the observed deviation in the college premium for younger vs. older workers, even with perfect substitutability across age. Re-estimating the model with these prices and supplies produces a good fit with better out-of-sample prediction and robustly yields positive elasticities of substitution between high and low skill workers. The estimates suggest greater substitutability across skill and a more modest role for SBTC. We implement two new approaches to modelling SBTC. First, we study the extent to which recessions induce jumps or trend-adjustments in skill bias and find evidence that both features are important (but differ across recessions). Second, we link SBTC to direct measures of information technology investment expenditures and show that these measures explain the evolution of skill bias quite well. Together, these approaches suggest that the ad hoc assumptions for SBTC previously employed in the literature are too crude to fit the data well, leading to the incorrect conclusion that SBTC slowed during the early-1990s and under-estimates of the elasticity of substitution between high and low skill workers.
Topic:
Economics, Human Capital, Supply, Skills, and Wages
Political Geography:
Global Focus

300. Gender discrimination in Football. Building a Toolbox Toward Gender Equity in the Beautiful Game

Author:
Rachel Davidson Raycraft, Rebecca Robinson, and Jolena Zabel
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Dejusticia
Abstract:
As the most popular sport worldwide, football (or soccer) may be the poster child for lingering gender disparities in sport. The importance of gender and gender-based categorizations cling to the world of sport like no other realm of culture or society in the twenty-first century. While presented as natural, logical, and innate, the differential treatment of men and women and boys and girls in the world of sports is largely the product of over a century of global socialization intent on preserving sport as a male-dominated pastime, lifestyle and avenue of opportunity. This report describes the various manifestations of gender-based discrimination that shape the game of football today, the role that the Fédération Internationale de Football Association (FIFA) plays in perpetuating this discrimination and the existing avenues for remedy (or Lack thereof). The report concludes with key takeaways from the fight for gender equality to date with an eye toward building a more just world of sport in the years to come.
Topic:
Gender Issues, Sports, Inequality, Discrimination, Football, and Soccer
Political Geography:
Global Focus