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162. Capital Flight from Africa and Development Inequality: Domestic and Global Dimensions
- Author:
- Léonce Ndikumana
- Publication Date:
- 03-2015
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- Over the past decades African economies have exhibited two stunning paradoxes: growth acceleration coexisting with stubbornly high poverty rates; increasing capital flight along with widening development financing gaps. There has been no attempt to link the two in the literature. This paper attempts to fill the gap; it suggests that the implications of capital flight for the inequality-growth-poverty nexus may be the key. Specifically, the paper proposes to shift attention to conceptual and empirical analysis of the implications of capital flight for inequality along income lines and inequality in development both within African countries and between Africa and advanced economies. The evidence presented in the paper indicates that Africa may be more unequal along human development dimensions than along income, and points to the possibility that capital flight may be one of the factors behind the observed limited poverty reduction gains from growth and persistent development gap between African countries and advanced economies.
- Topic:
- Development, Government, Politics, History, Economies, Inequality, Finance, Microeconomics, Capital Flight, and Trade
- Political Geography:
- Africa
163. The Prince('s) Rules: Economic Theories and Political Struggle in Europe
- Author:
- Orsola Costantini
- Publication Date:
- 04-2015
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- The Cyclically Adjusted Budget (CAB) is the estimated size of the public budget at some previously defined level of output which may represent the ‘normal’ output or a policy target and that usually is considered to be unaffected by business fluctuations or cycles. Such an estimate is supposed to isolate the automatic movements of revenues and expenditures, given the current structure of tax and transfers, from discretionary fiscal interventions and indicate the “impact” and sustainability of fiscal action. But this definition hardly does justice to the long and contentious history of this fateful estimate, which has been differently named, interpreted and calculated over the years and played a crucial role in many of the most important controversies in macroeconomics and public policy. This paper traces the evolution of the concept through time, tying it to the history of economic thought as well as economic history and policymaking. The reconstruction illustrates the important role the distribution of power plays in the evolution of economic theory and policy as the historical forms of the state-market relationship evolve. Here, however, we will focus mainly on the case of the European Union and Eurozone.
- Topic:
- Government, Politics, Science and Technology, History, Inequality, and Innovation
- Political Geography:
- Europe
164. Towards a Sovereign Debt Restructuring Framework
- Author:
- Richard A. Conn Jr.
- Publication Date:
- 04-2015
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- Initiatives to improve sovereign debt restructuring (“SDR”) began long before recent Argentine bond decisions but were redoubled in the aftermath of these rulings. At first glance, these cases identify problematic contract language that could be rectified by re-drafting critical boilerplate provisions such as the pari passu and collective action clauses (“CAC”). But given the effects of disorder, costs and delays in restructuring foreign sovereign debt upon debtor countries, creditors, and the bond market itself, it is understandable that some are uncomfortable leaving such matters solely in the hands of private parties to contracts without a framework that assists in minimizing damage to contracting and non-contracting parties alike. The creation of an agreed upon framework that facilitates the interaction among private and public parties is a good alternative to the status quo if this approach can provide greater stability and efficiency in the restructuring process while allowing for sufficient flexibility and certainty (traditional benefits of the iterative development of contract language) for market participants. There are a broad variety of options to consider and analyses to be performed, particularly relating to political feasibility, before proposing a framework. As discussed herein, given the historic context of SDR, a framework that focuses upon consensual procedures seems to be a logical starting point since it could add value to the restructuring process without treading on the political terrain of sovereigns.
- Topic:
- Government, Politics, History, Inequality, Finance, and Sovereign Debt
- Political Geography:
- Global Focus
165. Anarchic East Asia on an American Tether—and Cushion
- Author:
- Bruce Cumings
- Publication Date:
- 04-2015
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- The usual explanation for the recent turmoil in East Asia goes under the rubric of “the rise of China.” For practitioners of the “realist” school, like John Mearsheimer of the University of Chicago or the late Samuel Huntington of Harvard, all this is merely, and entirely, predictable: “rise” is what budding great powers do, just as in the fullness of time, a war with the leading great power is only to be expected (as both predicted in their most famous books—The Tragedy of Great Power Politics and The Clash of Civilizations). Realists of the containment school take this a bit further, to a strategy for America: contain rising China. This was certainly the policy of Secretary of State Hillary Clinton, lining up publicly as she did with the Philippines and Japan against Chinese island encroachments—which may also turn out to be the policy of President Hillary Clinton in 2017. And this is unquestionably how nearly all experts in China see American policy: containment, encirclement, all in the interests of keeping rising China . . . down. Of course, President Barack Obama and Secretary of State John Kerry fall all over themselves to deny that containment is the policy—and under their (questionable and unsteady) leadership, perhaps it isn’t. Instead the overriding Obama strategy is benign neglect of the political and the military, thus to engage China in the overarching global commons, neo-liberalism, bringing it ever deeper into capitalist practice and the world economy thus to muffle if not contain its insurgent impulses. But then that has been American policy since Richard Nixon ended the Cold War between Washington and Beijing, supported all along by a quiet but very secure bipartisan coalition in Washington embracing Democrats and Republicans, and more broadly Wall Street and multinational corporate leaders. Everybody has been making money in China, even recently-bankrupt General Motors (China now has the largest auto market in the world, and Chinese like to buy GM’s Buicks even though hardly anyone else does, perhaps because forefather Sun Yat Sen drove a Buick). The watchword here is neo-liberal interdependence, but the practice is to let the colossal dailiness of Sino-American exchange fly under the radar, or remain sotto voce, unacknowledged, even secret—hoping no one pays too much attention.
- Topic:
- Development, Government, Politics, History, and Finance
- Political Geography:
- East Asia and United States of America
166. Gordian knot: A panoramic perspective on stemming illicit financial flows from Africa
- Author:
- Melvin Ayogu
- Publication Date:
- 04-2015
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- Pushing this strand of research brings a certain feeling of trepidation. It comes from recognizing that by openly elaborating on how to catch or deter a criminal, you thereby confer an undue advantage on the criminal through forewarning. Obtaining a head start in the race to prevail, they (criminals) are able to consider and possibly devise an effective circumvention strategy. But if the criminal must not see it coming then, what aspects of how to stop a thief shall we and shall we not reveal or discuss openly amongst all? There are no easy answers to the conundrum. For instance, one has to consider the signaling value of openly engaging in discussions on how to stop criminal activities and then, balance that benefit against the paradox of empowerment. The balancing act is important because some aspects of the preventive remedies can unintentionally enable the very thing which society is striving to prevent.
- Topic:
- Development, Government, Politics, History, Inequality, Finance, Microeconomics, and Trade
- Political Geography:
- Africa
167. How Money Drives US Congressional Elections: More Evidence
- Author:
- Thomas Ferguson, Paul Jorgenson, and Jie Chen
- Publication Date:
- 04-2015
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- The protesters who swirled into parks, churches, and town squares around the world in the fall of 2011 to challenge the primacy of the “1%” hammered relentlessly on one theme above all others: that economic inequality has deep roots in the political system. Many social scientists and intellectuals who have picked up from where the Occupy movement left off share this conviction; they, too, have broken with the taboos that for so long segmented discussions of politics from economics. Piketty, in his monumental study, for example, avows that income distribution is a basically a question of “political economy” not pure economics. Stiglitz in The Price of Inequality is equally forthright – “increasingly, and especially in the United States, it seems that the political system is more akin to ‘one dollar one vote’ than to ‘one person one vote.’”
- Topic:
- Government, Politics, Science and Technology, History, Elections, Inequality, and Money
- Political Geography:
- North America and United States of America
168. Uncovering the Unknown: An Analysis of Tax Evasion in Zambia 2014
- Author:
- Shebo Nalishebo and Albert Halwampa
- Publication Date:
- 12-2014
- Content Type:
- Working Paper
- Institution:
- Zambia Institute for Policy Analysis and Research (ZIPAR)
- Abstract:
- The Government of the Republic of Zambia, like many other governments in the world, significantly relies on tax revenue to finance both its key infrastructure development and social services. Zambia’s tax revenue declined from 30% of GDP in the 1970s to only an average of 13% of GDP in the 1990s mainly due to the decline in mining revenue and weak tax administration. To address this decline, significant tax reforms were undertaken that included the creation of the Zambia Revenue Authority (ZRA). Despite these reforms, tax revenue collection has to a large extent been unsatisfactory, recording average tax revenue-to-GDP of 17% in the last five years. This study investigates the extent and causes of tax evasion in Zambia including the review of the current legal and administrative measures used by the ZRA in addressing this problem. To investigate tax evasion in Zambia, several methodologies or approaches are used. These include carrying out a qualitative survey on a small sample of large taxpayers to find out their perceptions on the causes of tax evasion in Zambia. In investigating the extent of tax evasion, the tax gap with respect to Pay-As-You-Earn (PAYE) personal income tax of the self-employed and paid employees is estimated using data from the nationally representative 2010 Living Conditions and Monitoring Survey (LCMS). Further, a comparative assessment of Zambia‘s tax revenue performance relative to countries in the Southern Africa Customs Union (SACU) and Sub-Saharan Africa (SSA) is undertaken. The study also reviews the current legal and administrative measures used to address tax evasion.
- Topic:
- Government, Tax Systems, and Tax Evasion
- Political Geography:
- Africa and Zambia
169. Can one retell a Mozambican reform story through Problem Driven Iterative Adaptation?
- Author:
- Matt Andrews
- Publication Date:
- 02-2014
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- Many public sector reforms in developing countries fail to make governments more functional. This is typically because reforms introduce new solutions that do not fit the contexts in which they are being placed. This situation reflects what has recently been called the 'capability trap' in development—which results in many interventions producing new forms that are not functional in states across the globe. The work on capability traps suggests that reforms can yield more functional influence in even the most complex states, however; if reformers adopt non-traditional approaches to doing reform. In particular, the work suggests that reforms will tend to be more contextually fitted if: (i) They are driven by problems that agents in the context care about; and (ii) They are introduced iteratively—through a stepwise process where ideas are tried and lessons are learned and used to adapt (or fit) ideas to context. The capability traps work embeds these ideas into an approach to doing reform called Problem Driven Iterative Adaptation (PDIA). This approach has deep roots in various literatures but many observers still ask how PDIA-type reforms could work to foster successful reform in complex hierarchical developing country governments and whether these approaches really help foster reforms that better fit such complex contexts. This paper responds to such question by describing an action research study where PDIA is being used to retell a story of reform that has to date been limited. The action research study is in Mozambique’s judicial sector and will examine whether and how a problem driven iterative approach can (i) flush out the contextual factors that often limit reform success, (ii) provide a viable route to find and fit reforms that actually foster greater functionality, and (iii) promote the authority needed to ensure change is implemented and institutionalized.
- Topic:
- Government, Developing World, Reform, and Public Sector
- Political Geography:
- Africa and Mozambique
170. Regional Sanctions against Burundi: A Powerful Campaign and Its Unintended Consequences
- Author:
- Julia Grauvogel
- Publication Date:
- 09-2014
- Content Type:
- Working Paper
- Institution:
- German Institute of Global and Area Studies
- Abstract:
- This paper examines the impact of regionally imposed sanctions on the trajectory of the Burundian regime and its involvement in the peace process following the 1996 coup in the country. Despite the country's socioeconomic and geopolitical vulnerability, the Buyoya government withstood the pressure from the sanctions. Through a vocal campaign against these sanctions, the new government mitigated the embargo's economic consequences and partially reestablished its international reputation. Paradoxically, this campaign planted the seed for comprehensive political concessions in the long term. While previous literature has attributed the sanctions' success in pressuring the government into negotiations to their economic impact, the government actually responded to the sanction senders' key demand to engage in unconditional, inclusive peace talks under the auspices of the regional mediator once the economy had already started to recover. The regime's anti-sanctions campaign, with its emphasis on the government's willingness to engage in peace talks, backfired, with Buyoya forced to negotiate after having become entrapped in his own rhetoric.
- Topic:
- Government, Regime Change, and Sanctions
- Political Geography:
- Africa and Burundi
171. The Civil Transition in Afghanistan: 2014-2016
- Author:
- Anthony H. Cordesman
- Publication Date:
- 09-2014
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Creating an effective transition for the ANSF is only one of the major challenges that Afghanistan, the US, and Afghanistan's other allies face during 2014 2015 and beyond. The five other key challenges include: Going from an uncertain election to effective leadership and political cohesion and unity. Creating an effective and popular structure governance, with suitable reforms, from the local to central government, reducing corruption to acceptable levels, and making suitable progress in planning, budgeting, and budget execution. Coping with the coming major cuts in outside aid and military spending in Afghanistan, adapting to a largely self-financed economy, developing renewal world economic development plans, carrying out the reforms pledged at the Tokyo Conference, and reducing the many barriers to doing business. Establishing relations with Pakistan and other neighbors that will limit outside pressures and threats, and insurgent sanctuaries on Afghanistan's border. Persuading the US, other donors, NGCO, and nations will to provide advisors to furnish the needed aid effort through at least 2018, and probably well beyond.
- Topic:
- Government, Politics, and Governance
- Political Geography:
- Afghanistan and Middle East
172. The governance of global value chains for live butterflies
- Author:
- Rich Karl, Magda Rich, and P.G. Chengappa
- Publication Date:
- 03-2014
- Content Type:
- Working Paper
- Institution:
- Norwegian Institute of International Affairs
- Abstract:
- Despite estimates that the global butterfly trade generates over US$100 million annually in sales of pupae for exhibitions and deadstock for a range of collector and artisanal uses, almost no research has been conducted that unpacks the dynamics of these value chains. This paper remedies this gap by highlighting the governance structure of the value chain, with important implications on the benefits for chain participants, upgrading strategies, sectoral sustainability, and the potential for new market entrants. This research on live butterfly chains reveals the fragility of current modes of economic organization that promote overproduction as threatening the long-term viability for the industry as a whole. The authors propose an alternative governance model based on the use of individually transferrable quotas, or ITQs, as a means of improving the performance of certain butterfly value chains.
- Topic:
- Economics, Government, International Trade and Finance, and Governance
173. Online Voting: Rewards and Risks
- Author:
- Peter Haynes
- Publication Date:
- 10-2014
- Content Type:
- Working Paper
- Institution:
- Atlantic Council
- Abstract:
- In a world of near-infinite computing power, ubiquitous connectivity, cloud-based services, and big data, the fact that the vast majority of countries holds elections using paper ballots appears an anomaly.
- Topic:
- Government, Science and Technology, and Reform
- Political Geography:
- United States
174. Local accountability in Mozambique
- Author:
- Julia Bastian
- Publication Date:
- 09-2014
- Content Type:
- Working Paper
- Institution:
- Institute for Development and Peace
- Abstract:
- The debate on decentralization has identified local accountability as a key factor for successful decentralization processes in developing countries, stressing that the account ability of subnational governments towards the national level may prove detrimental to their accountability to the citizens. Based on the distinction of formal and informal institutions and the discussion of accountability as a concept, this Working Paper identifies accountability mechanisms relevant at the local level and analyses their functioning, interaction and factors that influence their effectiveness. This analytical grid is then applied to the case study of Mozambique, in a structured and focused comparison of the municipalities of Beira and Catandica. The analysis shows that accountability mechanisms at national level do not necessarily undermine accountability towards the citizens, but even may have an activating effect on other accountability mechanisms. Funding, access to information, political competition at the local level and informal influences that emanate from formal organizations, such as political parties, are factors that influence the effectiveness of accountability mechanisms at the local level.
- Topic:
- Government, Governance, and Reform
- Political Geography:
- Mozambique
175. Remaking American Power
- Author:
- Trevor Houser, Shashank Mohan, Sarah O. Ladislaw, Michelle Melton, John Larsen, and Whitney Ketchum
- Publication Date:
- 11-2014
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- On June 2, 2014, the Environmental Protection Agency (EPA) released its draft Clean Power Plan (CPP), a proposed rule to regulate carbon dioxide from the nation's existing power generation facilities. As the central pillar of the Obama administration's strategy for addressing climate change, the draft rule's release was both highly anticipated and contentious.
- Topic:
- Energy Policy, Government, and Natural Resources
- Political Geography:
- America
176. Achieving Disaster Resilience in U.S. Communities
- Author:
- Stephanie Sanok Kostro and Garrett Riba
- Publication Date:
- 11-2014
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- The increased frequency and intensity of natural disasters, the rising amount of economic losses, and the mounting costs of providing relief indicate the growing importance of disaster resilience. Disasters have far- reaching consequences, ranging from the most basic physical injuries and property losses to long- term psychological, economic, and cultural damage. Merely supplementing resources to address the aftermath of disasters— rather than mitigating risks and putting in place key elements in advance of a disaster— is not a sustainable model for community resilience. Additionally, failure to utilize the resources of all public- and private- sector stakeholders to develop long- term planning mechanisms leaves communities vulnerable to repeated, high levels of damage and destruction.
- Topic:
- Disaster Relief, Government, Terrorism, and Natural Disasters
- Political Geography:
- United States
177. Asset Declarations: An effective tool to fight corruption?
- Author:
- Craig Fagan
- Publication Date:
- 07-2014
- Content Type:
- Working Paper
- Institution:
- Transparency International
- Abstract:
- Public sector officials who have achieved positions of power and managerial control over government budgets and spending can be particularly vulnerable to corruption. Asset declarations offer a critical tool to public officials and those they serve in the prevention, detection, investigation and sanctioning of corruption.
- Topic:
- Corruption, Government, Reform, and Budget
178. Options for a Political Transition in Syria
- Publication Date:
- 02-2014
- Content Type:
- Working Paper
- Institution:
- The Carter Center
- Abstract:
- This report outlines constitutional and legislative options for a political transition in Syria under the umbrella of the Final Geneva Communiqué, issued by the Action Group on Syria on 30 June 2012, and revived in early May 2013 at a meeting in Moscow between the U.S. and Russia. The Communiqué embodies the greatest degree of consensus that the international community has been able to achieve regarding the Syrian conflict, detailing a potentially viable path to a negotiated end to the civil war. Since May 2013, efforts by UN and Arab League Joint Special Envoy Lakhdar Brahimi and others to host a peace conference on Syria (dubbed "Geneva II"), have reinforced the importance of developing possible constitutional and legislative modalities for a transition.
- Topic:
- Civil War, Government, International Cooperation, and Armed Struggle
- Political Geography:
- Russia, United States, Middle East, and Syria
179. Japan's New Politics and the U.S.-Japan Alliance
- Author:
- Sheila A. Smith
- Publication Date:
- 07-2014
- Content Type:
- Working Paper
- Institution:
- Council on Foreign Relations
- Abstract:
- Electoral reform in the early 1990s ended single-party dominance in Japan and promised an era of new politics in which political parties would alternate control of the government. In the two decades that followed, Japan's foreign and domestic policy priorities were subjected to greater scrutiny and debate as Japan, like so many other nations around the globe, sought to reorient itself in a new post-Cold War world. The U.S.-Japan alliance that anchored Japan's postwar foreign policy was not immune to these domestic political reforms. For half a century, the conservative Liberal Democratic Party (LDP) prided itself on managing the relationship with Washington. But its ouster in 2009 by the reformist Democratic Party of Japan (DPJ) led many to expect that even Japan's alliance with the United States would be subject to serious review.
- Topic:
- Government and Bilateral Relations
- Political Geography:
- United States, Japan, and Asia
180. International in Life, National in Death? Banking Nationalism on the Road to Banking Union
- Author:
- Martin Rhodes and Rachel A. Epstein
- Publication Date:
- 12-2014
- Content Type:
- Working Paper
- Institution:
- The Kolleg-Forschergruppe (KFG)
- Abstract:
- European states have a long history of banking sector nationalism. Control over credit allocation is believed to contribute to economic development and competitiveness goals, insulation from external economic shocks, and control over monetary policy. This paper explains the potentially dramatic loss in domestic control over banks created by the European Banking Union (EBU). First, we argue that ongoing liberalization in the global and European economies has made banking sector protectionism both more costly and conflictual. Second, we contend that because many of the biggest banks have internationalized their operations, they now prefer centralized European regulation and supervision. Third, supporting a modified neofunctionalist argument, we find that behind the sometimes frenetic intergovernmental bargaining in 2012-14, it is primarily the European Commission and the European Central Bank that have pushed Banking Union ahead. Supranational institutions have argued, with some success, that they have unique capacity to solve collective action and prisoners' dilemma problems. Contrary to accepted wisdom, Germany has not set or limited the Banking Union agenda to a great extent, in part because of its own internal divisions. Moreover, the Commission and the ECB have managed at critical junctures to isolate Germany to secure the country's assent to controversial measures.
- Topic:
- Economics, Government, and Monetary Policy
- Political Geography:
- Europe and Germany