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501. The Digital Silk Road and China’s Influence on Standard Setting

Author:
Alex He
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
China is striving to become a leader in international standard setting, and the Digital Silk Road, part of China’s Belt and Road Initiative to expand its global infrastructure and markets, is key to realizing this goal. Both roads depend on standard connectivity, fuelled by Chinese private companies that are the driving force behind China’s growing role as a leader in technology development and shaping standards in both domestic and global markets. However, China faces strong competition to gain more influence in international standard-setting bodies, which are dominated by the European Union and the United States.
Topic:
Infrastructure, Digital Economy, Trade, Digital Culture, Silk Road, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America

502. The Causes and Consequences of Refugee Flows: A Contemporary Re-Analysis

Author:
Andrew Shaver
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Empirical Studies of Conflict Project (ESOC)
Abstract:
The world faces a forcible displacement crisis. Across the world, tens of millions of individuals have been forced from their homes and across international boundaries. The causes and consequences of refugee flows are, therefore, the subjects of significant social science inquiry. Unfortunately, historical lack of reliable data on actual refugee flows has significantly limited empirical inferences on these topics. Using data newly released by the United Nations on annual dyadic flows, we replicate twenty-seven studies published in economics and political science journals on the causes and consequences of these flows. We extend fourteen of these. We find that some of the causes of flows described in the literature are less substantively and/or statistically significant than previously reported while others are more. Generally, with some exceptions, we find that previously reported effects of refugees on security conditions are attenuated, suggesting that the literature’s predominant focus on refugees as sources of violent instability may be overstated.
Topic:
Civil War, Terrorism, and Violence
Political Geography:
United States and Global Focus

503. From Kosovo to Ukraine: lessons from the humanitarian response to conflict and displacement in Europe

Author:
Margie Buchanan-Smith and Peter Wiles
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
While there are many differences between the conflicts in Kosovo and Ukraine, the international humanitarian response to both bears many similarities. For example, both crises triggered record levels of funding and most international humanitarian agencies on the receiving end had limited or no presence and experience in the countries affected. Protection is the dominant need amongst affected communities in both crises as well. This paper – written by Margie Buchanan-Smith and Peter Wiles – highlights key lessons from the international humanitarian response to the Kosovo crisis that could have relevance to the response in Ukraine. The lessons are drawn from the three-volume ‘Independent Evaluation of Expenditure of DEC Kosovo Appeal Funds’ and ALNAP’s meta-evaluation of the Kosovo response, from our 2001 Annual Review.
Topic:
International Organization, Conflict, Crisis Management, and Humanitarian Response
Political Geography:
Europe, Ukraine, Eastern Europe, and Kosovo

504. Finding a New Idiom: Language, Moral Decay, and the Ongoing Nakba

Author:
Elias Khoury
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for Palestine Studies
Abstract:
This essay is a translated and edited version of the Anis Makdisi Program in Literature lecture delivered by the author in May 2021. The talk, on the uprising sweeping every Palestinian geography from the river to the sea, was constructed as a series of illustrative stories. Their distillation, as Khoury points out, is that there will be no end to the Palestinian question so long as there exists a people continually prepared to resist the ongoing Nakba. “It is enough,” Khoury concludes, “that with this uprising Palestine has recovered the alphabet, leaving us to create a new idiom.”
Topic:
Culture, Language, Nakba, Resistance, and Storytelling
Political Geography:
Middle East and Palestine

505. An Invitation to Belong: Challenging the Systemic Exclusion of Palestinians as Present Absentees

Author:
Sarah Anne Minkin
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for Palestine Studies
Abstract:
This essay takes as its starting place the “present absentee” status of Palestinians in U.S. and Jewish discourse and engagement with Israel/ Palestine. Ethnographic fieldwork in Jewish American communities demonstrates practices that reiterate a dynamic of Jewish belonging against the presence of Palestinian absence. The essay explores different initiatives to challenge this systemic exclusion of Palestinians, including public programs that amplify Palestinian voices and normalize hearing Palestinians as experts in their own lives and an experimental study group with Jewish American leaders that centers Palestinian perspectives in an effort to cultivate radical empathy. Insights gained in these initiatives point to the importance of articulating fuller visions of community and belonging in engagement with Israel/Palestine.
Topic:
Ethnography, Anti-Semitism, Identity, Belonging, Jewish community, Present Absentee, Empathy, and Political Education
Political Geography:
Middle East, Israel, Palestine, and United States of America

506. Americans on War Powers, Authorization for Use of Military Force and Arms Sales: A National Survey of Registered Voters

Author:
Steven Kull
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for International and Security Studies at Maryland (CISSM)
Abstract:
The question of when the United States should use military force is a profound question. There has been a long-running debate about the role of Congress and the President when it comes to making this decisions. The constitution gives Congress the power to fund the military and declare war, and declares the President as the Commander in Chief of the military. However, there are ambiguities about which branch of government has the power in a number of specific situations related to the use of force and the transfer of arms to another country. Currently there are a number of pieces of Congressional legislation that seek to give Congress greater power. One proposal seeks to give Congress greater influence over the use of military force outside of the framework of a declaration of war or in response to an attack on the US. Current law, grounded in the War Powers Act of 1973, requires that the President withdraw troops after 60 days unless Congress votes in favor of continuing it. However, since its passage, every President has considered this unconstitutional and many have not abided by it, keeping forces in place without Congressional approval. In order to stop such a military operation, Congress must gather a veto-proof majority, or bring the President to court. Neither has ever happened. A proposal that has been put forth in Congress is to ‘flip the script’ on this, and automatically cut off funding to such military operations after 60 days, unless Congress actively votes in favor of continuing the operation. (Based on H.R. 2108, H.R. 5410 and S. 2391) Another proposal deals with the termination of a Congressional authorization to use military force (AUMF). Shortly after the September 11 attacks Congress authorized the President to use military force against those responsible for the attacks, or who have aided those responsible. Since then all presidents have used this AUMF to justify various uses of force that some Members of Congress feel go beyond its original purpose. Currently there is a proposal to terminate this AUMF which requires an act of Congress. (Based on H.R. 255 and S. 2391) The last proposal seeks to give Congress greater authority over arms sales. Currently, all arms sales must be approved by the President, and Congress can only halt an arms sale with a majority vote, or more realistically a veto-proof majority. Members of Congress believe that it should be easier for Congress to halt an arms sale. They have introduced a proposal that would also ‘flip the script’ in this case by requiring that any arms sale over $14 million only proceed if Congress votes in favor. (Based on H.R. 5410 and S. 2391) To bring the American people a voice at the table of the current debate on these various pieces of legislation, the Program for Public Consultation (PPC) has conducted an in-depth on-line survey of 2,702 registered voters with a probability-based sample provided by Nielsen Scarborough.
Topic:
Defense Policy, Military Strategy, Public Opinion, and Civil-Military Relations
Political Geography:
North America and United States of America

507. What the First Week of Fighting in Ukraine Tells Us About a Potential Insurgency

Author:
Alec Worsnop
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for International and Security Studies at Maryland (CISSM)
Abstract:
While the Russian advance in Ukraine has been slower than expected, its overwhelming conventional superiority gives it the upper hand. Despite the valiant resistance of many Ukrainians, Russia will probably conquer all or a portion of the country. However, the first week of the conflict has provided some useful information about the prospects for an insurgent campaign in the wake of a Russian occupation.
Topic:
Defense Policy, Military Strategy, Military Intervention, and Conflict
Political Geography:
Russia, Europe, and Ukraine

508. Trump ended WTO dispute settlement. Trade remedies are needed to fix it.

Author:
Chad P. Bown
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Unhappy with the rulings of the WTO dispute settlement system, which disproportionately targeted US use of trade remedies, the United States ended the entire system in 2019. There are multiple hurdles to agreeing to new terms of trade remedy use and thus potentially restoring some form of binding dispute settlement. First, a change would affect access to policy flexibility by the now large number of users of trade remedies. Second, although China’s exports are the overwhelming target of trade remedies, exporters in other countries increasingly find themselves caught up in trade remedy actions linked to China. Third, critical differences posed by China’s economic model may call for new rules for trade remedies, but no consensus on those rules has emerged. Even some of the most promising reforms have practical limitations, create additional challenges, or may be politically unviable.
Topic:
Economics, Trade, Donald Trump, and WTO
Political Geography:
China and United States of America

509. The international financial system after COVID-19

Author:
Maurice Obstfeld
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In March 2020, international markets seized up with a violence unequaled since the global financial crisis nearly a dozen years before. As economies around the world locked down in the face of the potentially deadly but completely novel SARS-CoV-2 virus, stock markets fell, firms and governments scrambled for cash, liquidity strains emerged even in the market for US Treasurys, and capital flows to emerging-market and developing economies (EMDEs) reversed violently. This paper reviews the evolution of global financial markets since the global financial crisis, changes in academic thinking about these markets’ domestic impacts, the strains seen during the COVID-19 crisis, and perils that may lie ahead. A key theme is that stability will be enhanced if the global community embraces reforms that elevate market resilience, rather than depending on skillful policymakers wielding aggressive but ad hoc policy interventions to ride to the rescue again.
Topic:
Economics, Markets, COVID-19, and Financial Systems
Political Geography:
Global Focus

510. Socioeconomic diversity of economics PhDs

Author:
Robert Schultz and Anna Stansbury
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
It is well documented that women and racial and ethnic minorities are underrepresented in the economics profession, relative to both the general population and many other academic disciplines. Less is known about the socioeconomic diversity of the profession. In this paper, we use data from the National Science Foundation’s Survey of Earned Doctorates to examine the socioeconomic background of US economics PhD recipients as compared with US PhD recipients in other disciplines, proxying for socioeconomic background using PhD recipients’ parents’ educational attainment. We find that economics PhD recipients are substantially more likely to have highly educated parents, and less likely to have parents without a college degree, than PhD recipients in other disciplines. This is true both for US-born and non-US-born PhD recipients, but the gap between economics and other disciplines is starker for those born in the United States. The gap in socioeconomic diversity between economics and other PhD disciplines has increased over the last two decades.
Topic:
Economics, Women, Diversity, and Academia
Political Geography:
Global Focus

511. The private sector advances in China: The evolving ownership structures of the largest companies in the Xi Jinping era

Author:
Tianlei Huang and Nicolas Véron
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper documents recent structural changes in China’s corporate landscape, based on company-level data, providing a complementary perspective to that of official Chinese statistics. We classify China’s largest companies by revenue since 2004 (based on Fortune Global 500 rankings), and largest listed companies by market capitalization since 2010, into state and private-sector categories, using a conservative definition of the private sector. Among the largest companies by revenue, the private sector was nonexistent in the mid-2000s but has grown steadily in the past decade, even though the state sector still dominates. The aggregate revenue of private-sector companies has grown from zero in Fortune’s ranking in 2005 (based on 2004 revenue) to $104 billion in the 2011 ranking, or merely 3.8 percent of the $2.78 trillion in aggregate revenue for all Chinese companies in the ranking, and to $1.7 trillion in the latest 2021 ranking (based on 2020 revenue), or 19 percent of the Chinese companies’ aggregate revenue. As for market value of the largest listed firms, the private sector’s share in the top 100 listed Chinese companies was only 8 percent at end-2010 but crossed the 50 percent threshold in 2020 and retreated slightly in 2021 to 48 percent, following that year’s regulatory crackdown on several private-sector-dominated industries. These findings do not support a narrative of broad-based rollback in recent years of previous private-sector expansion.
Topic:
Economy, Private Sector, Corporations, and Business Management
Political Geography:
China and Asia

512. WTO 2025: Restoring binding dispute settlement

Author:
Alan Wm. Wolff
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Binding dispute settlement—the ability to obtain a final judgment of whether a member of the World Trade Organization (WTO) has acted inconsistently with its obligations—was the defining attribute of the WTO as created in 1995. Global commerce thrived on having the certainty provided by its taking place within this system. For well over a decade, the United States had complained that the dispute settlement system was undermining the trade remedies—antidumping, countervailing duties against subsidies, and safeguard actions against injurious imports—that were allowed under the WTO’s rules. When a populist US administration assumed office in 2017, it blocked appointments to the WTO’s Appellate Body. Today, the WTO dispute settlement system has become balkanized. The European Union and a number of other countries have banded together to put into place an alternative mechanism. Outside this system are the other two-thirds of the WTO members, including the United States. For most WTO members, no definitive result can be reached as to whether WTO obligations have been violated, as there is no assurance that WTO dispute settlement will be binding for them. This paper addresses how to reconstruct a system that the United States could join that would be broadly acceptable to others. It sets out a wide range of elements for negotiators to consider to rebuild the WTO dispute settlement system and make WTO agreements enforceable again.
Topic:
Economics, Trade, WTO, and Disputes
Political Geography:
Global Focus

513. WTO 2025: Enhancing global trade intelligence

Author:
Alan Wm. Wolff
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
International trade flows based on information. Is the foreign market open? What are the conditions for entry? Are there customs duties to be paid and other regulations that need to be satisfied? Businesses thrive on getting as much certainty as they can find, and this requires reliable information. Is the competition subsidized? Are the competitors favored state-owned companies? During the pandemic, governments needed to know if food and medical supplies were going to be available from foreign sources and, most importantly, how available vaccines would be as most of the world’s countries could not produce any. Effective public policy cannot be made in the dark. The World Trade Organization, and the General Agreement on Tariffs and Trade before it, were founded with the idea of providing transparency. But more is needed to understand why trade is taking place, and even more important, when it is not, why not?
Topic:
Economics, Markets, Trade, and WTO
Political Geography:
Global Focus

514. WTO 2025: Getting back to the negotiating table

Author:
Alan Wm. Wolff
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The negotiation of multilateral agreements has stalled at the World Trade Organization (WTO). The action is among groups of like-minded WTO Members, either regionally or in open plurilateral agreements (OPAs) in Geneva at the WTO. There is currently no consensus among WTO Members to include plurilateral agreements officially in the set of WTO agreements. Many additional challenges require multilateral—that is, global—agreements: the pandemic, food security, and climate change, among them. A breakthrough is needed to get WTO negotiations back on track.
Topic:
Climate Change, Treaties and Agreements, Food Security, Multilateralism, COVID-19, and WTO
Political Geography:
Global Focus

515. WTO 2025: Constructing an executive branch

Author:
Alan Wm. Wolff
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The World Trade Organization (WTO) as an institution accords much less of a role to its chief officer and her staff, namely the WTO Director-General and the Secretariat, than do any of its sister international organizations—the World Bank, the International Monetary Fund, the Organization for Economic Cooperation and Development—to their chief officers and staff. The WTO Secretariat is much smaller than its peer international organizations and underfunded. In considering WTO reform, this deficiency needs to be rectified if the WTO’s performance is to live up to its Members’ needs.
Topic:
Economics, World Bank, IMF, WTO, and OECD
Political Geography:
Global Focus

516. COVID-19 vaccine supply chains and the Defense Production Act

Author:
Chad P. Bown
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In response to the COVID-19 pandemic, the US government used novel policies to accelerate research, development, and production of a diversified portfolio of new vaccines. This paper begins by describing the Defense Production Act (DPA) of 1950 and the initial “priority-rated” contracts agreed to under Operation Warp Speed in 2020 to expedite manufacturing and achieve scale, which succeeded in producing hundreds of millions of doses of COVID-19 vaccines by early 2021. However, a puzzle soon emerged, as the scale of US vaccine production was shortly thereafter overtaken by plants in the European Union and India. The paper investigates the tradeoffs US policymakers faced in early 2021 once much of the initial uncertainty about the safety and effectiveness of many COVID-19 vaccines had been resolved—about whether to recalibrate contracts to expand production capacity to help meet global, instead of US, vaccine demand. It also examines the emergence of input shortages and assesses whether both the price constraints implicit in the 2020 DPA contracts and business decisions made to quicken the process of bringing new vaccine plants online globally inadvertently exacerbated them. It also explores the potential need for complementary, input capacity enhancing policies in the face of highly fragmented, cross-border COVID-19 vaccine supply chains.
Topic:
Crisis Management, Vaccine, COVID-19, and Supply Chains
Political Geography:
North America and United States of America

517. Public responses to foreign protectionism: Evidence from the US-China trade war

Author:
David Steinberg and Yeling Tan
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
America's recent turn toward protectionism has raised concerns about the future viability of the liberal international trading system. This study examines how and why public attitudes toward international trade change when one's country is targeted by protectionist measures from abroad. To address this question, the authors fielded three original survey experiments in the country most affected by US protectionism: China. First, they find consistent evidence that US protectionism reduces Chinese citizens' support for trade. This finding is replicated in parallel experiments on technology cooperation, and further validated outside of the China context with a survey experiment in Argentina. Second, they show that responses to US protectionism reflect both a "direct reciprocity" logic—citizens want to retaliate against the United States specifically—and a "generalized reciprocity" logic that reduces support for trade on a broader, systemic basis.
Topic:
Economics, Political Economy, Public Opinion, Trade, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

518. Social Policy Expansion and Retrenchment After Latin America’s Commodity Boom

Author:
Sara Niedzwiecki and Jennifer Pribble
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
The literature on social policy expansion and retrenchment in Latin America is vast, but scholars differ in how they explain the outcomes, arriving at different conclusions about the role of democracy, left parties, favorable economic conditions, and social movements in shaping reform. What can welfare state developments since the end of the commodity boom teach us about the theoretical power of these arguments? This paper engages this question, seeking to explain recent incidents of social policy reform in 10 presidential administrations in Argentina, Brazil, Chile, and Uruguay. Using a combination of crisp-set qualitative comparative analysis (csQCA) and case studies, we identify multiple paths toward social policy expansion and retrenchment that involve the absence and presence of electoral competition, economic resources, party ideology and linkage mechanism, social movement pressure, international pressure, and legacies. The results show that while both parties of the left and right expanded social programs, only the right engaged in retrenchment, yet partisanship alone is insufficient for explaining reform outcomes, as the variable must appear in combination with other factors depending on the party’s linkage mechanism. The results provide new insight into the politics of social policy reform in Latin America, showing the relevance of complex forms of causality.
Topic:
Health, Poverty, Social Movement, Democracy, Inequality, Public Policy, and Political Parties
Political Geography:
Brazil, Argentina, South America, Uruguay, Latin America, and Chile

519. Defying United Nations Sanctions: Three Reasons for African Engagement with North Korea

Author:
Tycho van der Hoog
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The United Nations (UN) sanctions against North Korea are weakened by structural evasion techniques and weak enforcement. The African continent is a crucial node in the global illicit networks of North Korea. This paper examines three motives for African states to cooperate with North Korea, with a particular focus on the context of southern Africa: historical affinity (reciprocity), the practical issue of maintenance dependency (necessity), and the presence of weak enforcement regimes (opportunity). Based on a deep reading of UN Panel of Experts reports, academic literature and policy papers, novel archival material, and an interview with a defected North Korean diplomat, this paper argues that solutions to strengthen the sanctions regime can be successful only if they are grounded in African initiatives.
Topic:
Security, Economics, United Nations, and Sanctions
Political Geography:
Africa, Asia, and North Korea

520. Debunking the Korean Peninsula "Arms Race": What's Behind South Korea's Military Force Development?

Author:
Markus Garlauskas and Axel Catellier
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Following a record number of North Korean missile launches, as well as tests by South Korea, assertions have been widely and uncritically made that Seoul is participating in an inter-Korean arms race. This paper challenges that paradigm by arguing that South Korea’s military acquisitions, displays, and testing of new weapons are better explained as proactive efforts to build military capabilities to support national security priorities in a broader context, rather than reactions to the threat from North Korea. While North Korea’s reasons for weapons testing are well-documented, South Korea’s military buildup in recent years has received far less attention. This paper examines drivers behind South Korea’s military investments and makes recommendations for how the Republic of Korea (ROK)-United States alliance could incorporate these capabilities into alliance military operations beyond simply deterring or defeating North Korea. To do so, it examines how broader drivers affect ROK strategic thinking, the demands this puts on the ROK military, and how those demands translate to specific defense acquisitions. With the start of a new ROK presidential administration, it is an opportune time for Seoul and Washington to coordinate approaches on capabilities development in ways that would benefit both countries in the years to come.
Topic:
Security, Armed Forces, Arms Race, and Military
Political Geography:
Asia, South Korea, and North Korea

521. Inter-Korean Reconciliation and the Role of the U.S.: Facilitator or Spoiler?

Author:
Gabriela Bernal
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Although the Korean Peninsula has been divided for over 70 years, North and South have not been able to make lasting progress in terms of reconciliation. While there are multiple factors directly influencing the extent to which inter-Korean relations can progress, this paper focuses on the role of the United States. When it comes to inter-Korean reconciliation efforts, is the U.S. more of a facilitator or a spoiler? By looking at three case studies spanning three South Korean administrations—Roh Tae-woo, Roh Moo-hyun and Moon Jae-in—this paper attempts to find patterns and lessons related to Washington’s role in the complex inter-Korean reconciliation process. The cases reveal that the U.S. has played the role of both facilitator and spoiler in each case, and that whatever role the U.S. plays depends on its own relationship with North Korea at that time. The U.S. is most likely to play a facilitating role when the administrations in Washington and Seoul are both willing to engage diplomatically with Pyongyang, when progress is being made in denuclearization talks, when the geopolitical environment is conducive towards diplomacy and engagement with North Korea, and when the U.S. adopts a reciprocal negotiating strategy. The paper concludes by considering the conditions necessary to achieve inter-Korean reconciliation and to establish long-term peace on the peninsula. Key factors include the need for trust-building and reciprocity between the U.S. and North Korea, and adopting a more holistic approach that goes beyond the nuclear problem and aims to establish a lasting relationship between Washington and Pyongyang.
Topic:
International Relations, Security, Foreign Policy, Bilateral Relations, and Reconciliation
Political Geography:
Asia, South Korea, North Korea, and United States of America

522. South Korea's Critical Moment in Digital Currency Policymaking: Between Regulating Cryptocurrencies and Launching a Central Bank Digital Currency (CBDC)

Author:
June Park
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Why is South Korea pilot-testing its Central Bank Digital Currency (CBDC), and what made it shift from non-issuance to consideration? This paper investigates the Bank of Korea (BOK)’s CBDC-related developments amid the geopolitical contest between the U.S. and China. It examines the Moon Jae-in administration’s defiance of decentralized finance (DeFi) and the BOK’s sudden shift from non-issuance to potential issuance, which led to expedited research, development, and pilot-testing of CBDCs. As in the case of the digital yuan, the BOK envisions a hybrid architecture for the digital won, wherein central banks and associated partner institutions are CBDC distributors, though they are distinguished by placing the digital won on distributed ledger technology rather than by centrally controlling it. However, South Korea’s previously rash decision to forego DeFi under an undemocratic process has deprived the country of the time and opportunity to develop new innovations as a leading country in the digital frontier. By sticking only to digitalizing centralized finance, the country now aims to be in “standby” mode for its CBDC launch if and when required, so as not to fall behind in digital financial architecture. This paper scrutinizes the South Korean government’s moves on crypto and CBDCs and argues that 1) the Moon administration has shown incapability in addressing DeFi amid the crypto boom and bust, and 2) the BOK’s shift from non-issuance to potential issuance of the digital won is driven by its interest to uphold central bank independence amid swaying geopolitics between the U.S. and China and an unpredictable upcoming presidential election in South Korea.
Topic:
Economics, Elections, Finance, Cryptocurrencies, and Digital Currency
Political Geography:
China, Asia, South Korea, North America, and United States of America

523. South Korea's Public Diplomacy during the COVID-19 Pandemic: Seeking Status as an Authority in Global Governance

Author:
Kadir Ayhan
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The COVID-19 pandemic caught almost all countries unprepared. Some countries, including South Korea (hereafter Korea), managed to deal with the pandemic relatively more successfully than others and had a proactive global posture from early on, including providing aid, and public diplomacy campaigns. In this paper, I explore Korea’s COVID-19-related public diplomacy activities and its aims. I analyze Korea’s COVID-19 humanitarian aid trends, its policy documents, and the tweets related to the pandemic posted by the country’s official public diplomacy account. I find that the pandemic catalyzed what Korea had already been aiming to do, which is improve its global status to be among top authorities across various issue-areas. Due to the nature of the pandemic, Korea’s public diplomacy has been themed around international cooperation and solidarity. I suggest that Korea should hold onto its international cooperation emphasis on public diplomacy, to form the basis for its status-seeking as an authority in global governance in the post-pandemic era.
Topic:
International Relations, Diplomacy, Domestic Policy, COVID-19, and Health Crisis
Political Geography:
Asia, South Korea, and Global Focus

524. Identity and support for policies towards Indigenous people: Evidence from Australia

Author:
Astghik Mavisakalyan and Yashar Tarverdi
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper adds to knowledge on the role of politicians’ and voters’ identities in influencing policy-making in societies marked by ethnic inequality. The outcome we investigate is the initiatives and policies targeting Indigenous populations in the context of Australia. We ask whether and how politicians’ and voters’ identities, defined based on a range of their observable characteristics, shape initiation and support of Indigenous-focused policies. Drawing on data on the voting history of members of the two houses of the Australian parliament, we provide an analysis of law-making behaviour and show that political ideology, and to some extent politicians’ propensity to act rebelliously and diligently, are significant determinants of their agreement on Indigenous-focused policies. Our complementary analysis of voters’ attitudes and preferences on issues concerning Indigenous Australians points to the high relevance of political ideology, and in doing so, highlights the alignments in the behaviours of politicians and voters.
Topic:
Inequality, Domestic Politics, Voting, Indigenous, and Identity
Political Geography:
Australia and Asia-Pacific

525. The political economy of women’s empowerment policies in India

Author:
Jyotsna Jha, Niveditha Menon, and Neha Ghatak
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper analyses the political economy of women’s-empowerment-related policymaking in India through a re-examination of the context of both the genesis and closure of a major programme, Mahila Samakhya. Mahila Samakhya, which embodied feminist philosophy and pedagogy, started in 1987 with the aim of creating the education-based empowerment of Dalit and Adivasi women in rural India, and was inexplicably shut down in 2014. We argue that a combination of political philosophy, electoral majority, and contemporary global trends influenced both the beginning and the demise of the programme. We argue that programmes such as Mahila Samakhya, which called for a long and messy process of collectivization of the most marginalized women using the methodology of reflection and reconstruction, became much less desirable with global shifts in development discourse. These shifts towards more ‘evidence’-based policy focused much more on immediate ‘outcomes’ than on ‘processes’, much to the detriment of programmes such as Mahila Samakhya.
Topic:
Political Economy, History, Women, Feminism, Empowerment, and Collectivism
Political Geography:
South Asia and India

526. Weathering shocks: the effects of weather shocks on farm input use in sub-Saharan Africa

Author:
Aimable Nsabimana
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
: There has been much discussion on climate change and its adverse effects on agriculture, including excessive loss of food production. In regions such as sub-Saharan Africa, where agriculture is the major source of household livelihoods, shocks in weather patterns affect farmers’ expectations of farm yield and hence the decision to adopt farm inputs such as fertilizers and pesticides and the extent of their utilization, particularly given the relatively high cost of these inputs. In this study, I explore the relationship between weather shocks and the intensity of inputs use at the plot level using large-scale national panel data from three African countries: Niger, Nigeria, and Tanzania. By combining monthly drought index data with a rich Living Standards Measurement Study-Integrated Surveys on Agriculture dataset, I find that the intensity of chemical fertilizer use reduces much more in drought-prone areas than in less drought-prone areas during growing seasons. I also find that drought during lean seasons is associated with higher pesticide uptake. The evidence suggests that drought induces farmers to purposively reduce farm investments, including yield-enhancing technology such as chemical fertilizer, hence worsening adverse farm yield effects.
Topic:
Agriculture, Climate Change, Food Security, Weather, and Chemical Fertilizer
Political Geography:
Africa and Sub-Saharan Africa

527. ‘Delangokubona’ and the distribution of rents and opportunity

Author:
Ayabonga Cawe
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Capital spending on infrastructure presents a significant counter-cyclical tool, however contested it might be in a society as unequal as South Africa. The history of racial capitalism, racebased exclusion from economic participation, and an enduring political economy based on the concentration of capital, product, and service markets has given rise to a post-apartheid ‘politics of entry’ that mobilizes both formal and informal adaptations of redistributive policies aimed at ensuring redress of past injustices and access and participation by small and medium-sized enterprises owned by historically disadvantaged people. This is observed in stark form in the capital spending on economic and social infrastructure, which the South African government envisages as the ‘flywheel’ of the country’s economic reconstruction and recovery. Applying a combination of tools from new institutional economics, political sociology, and heterodox political economy frameworks, this paper considers the ‘informal’ and at times violent adaptation of policy, here defined as the ‘Delangokubona phenomenon’, which uses both formal mechanisms and the threat (perceived or real) of violent disruption to negotiate access to policy-sanctioned economic ‘rents’ under the auspices of ‘black economic empowerment’ in public infrastructure projects.
Topic:
Infrastructure, Economy, Rent, Redistribution, and Empowerment
Political Geography:
Africa and South Africa

528. Programme-135: addressing poverty and inequality in Viet Nam

Author:
Tung Duc Phung and Thanh Minh Pham
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Viet Nam has achieved remarkable economic growth and poverty reduction since the Doi Moi. However, ethnic minorities and the ethnic majority do not benefit equally from the national economic progress. The proportion of poor households that are ethnic minority-headed soared from 18 per cent in the early 1990s to 56 per cent in 2008. The disparity exists in their access to crucial basic infrastructure and public services, including transportation, education, healthcare, electricity supply, markets, and justice services. Initiated in 1998, Programme-135 targets the most vulnerable communities and aims to promote production, increase access to basic facilities, improve education, and raise awareness for better living standards. The programme addresses typical causes of poverty among ethnic minorities and inequality between these groups and the majority. Programme-135 has created positive impacts and successfully improved the lives of the beneficiaries. In this paper we provide an overview of the programme and examine the drivers of its success in reducing poverty and bridging the majority–minority development gap. We also discuss the limitations and lessons from the programme.
Topic:
Poverty, Minorities, Inequality, and Ethnicity
Political Geography:
Vietnam and Southeast Asia

529. Management of the COVID-19 pandemic in Kerala through the lens of state capacity and clientelism

Author:
Jos Chathukulam and Masani Joseph
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
During the first wave of COVID-19 infections, Kerala, a state in southern India, successfully managed to contain the pandemic. As a result, the Kerala model of managing the COVID-19 pandemic was celebrated as a success across the globe. However, at the time of writing, it looks like the celebrations were a bit premature and the failure to contain the spurt in COVID19 infections in the state in a second wave also ascertains this fact. While the rest of India recovered from the second wave of COVID-19 infections, Kerala struggled to bring the pandemic under control. This paper examines the state capacity in terms of health infrastructure before and during the pandemic. The paper also investigates the reasons behind the unravelling of the Kerala model of pandemic management. We analyse the role and impact of clientelism and political hegemony of the Left Democratic Front (LDF) in Kerala over COVID-19 mitigation strategies. We also investigate how Kerala’s effective pandemic response created a sort of performance legitimacy for the LDF government.
Topic:
Politics, Hegemony, State, Pandemic, COVID-19, and Clientelism
Political Geography:
South Asia, India, and Kerala

530. The social foundations of (in)effective states: Uttar Pradesh’s response to the COVID-19 pandemic

Author:
Indrajit Roy
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A rich and growing literature illustrates the paradox of COVID-19 responses by governments across the world. States with higher levels of authority and capacity have struggled to respond effectively to COVID-19, while states with low capacity and authority have been more effective in containing the pandemic. Subnational comparisons within India appear to support this worldwide finding, illustrated by the official data on pandemic management presented by the Indian state of Uttar Pradesh. Against such appearances, this paper questions the official presentation of the Uttar Pradesh data. Based on reportage from grassroots sources, this paper argues that Uttar Pradesh witnessed a significant extent of undercounting. However, the paper cautions against assumptions that undercounting of COVID cases and deaths in the state reflects poor state capacity. Quite to the contrary, the paper situates the growing capacity of the state in Uttar Pradesh within its historical context to suggest it improved legitimacy and authority as it transitioned from an ‘elitist social coalition’ between 1947 and 1989 to an ‘inclusive social coalition’ from 1989 to 2017. The poor management of the pandemic by the present government of the state cannot thus be attributed to factors such as weak state capacity, poor authority, or limited legitimacy. What explains this paradox of poor COVID management despite improved state effectiveness? This paper reflects on this paradox by highlighting the ideational commitment of the state government to crafting an ‘ethnic social coalition’ rather than responding to the social welfare needs of the population.
Topic:
Ethnicity, State, Crisis Management, Pandemic, COVID-19, and Inclusion
Political Geography:
South Asia, India, and Uttar Pradesh

531. Does an effective government lower COVID19’s health impact? Evidence from Viet Nam

Author:
Duc Anh Dang and Ngoc Anh Tran
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Government effectiveness has played an important role in tackling the crisis caused by the coronavirus (COVID-19) pandemic. This paper discusses the different aspects of government effectiveness in explaining the variation in the COVID-19 confirmed cases and death levels in Viet Nam. We use the Provincial Governance and Public Administration Performance Index in 2019 to measure the quality of government effectiveness at the local level. The findings show the importance of health system capacity in the battle against COVID-19. We find that increased government transparency is significantly associated with lower confirmed rates. For the impact of the level of participation, we find that provinces that have higher quality of village head elections or where people have more opportunities to participate tend to have lower infected cases, especially where people participate in the formal and informal association and have voted in the National Assembly election.
Topic:
Government, Health, Pandemic, and COVID-19
Political Geography:
Vietnam and Southeast Asia

532. Duterte’s pandemic populism: Strongman leadership, weak state capacity, and the politics of deployment in the Philippines

Author:
Julio C. Teehankee
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The outbreak of the COVID-19 pandemic undermined the populist legacy of Philippine president Rodrigo R. Duterte. Despite implementing one of the longest and strictest lockdowns globally, the country has struggled with controlling the pandemic. While Duterte looks to have triumphed in his attack on human rights and press freedom, his government’s record in combating the virus has been spotty at best. Yet Duterte’s populism has proven to be resilient. He has remained extremely popular, with a September 2021 national survey reporting 81 per cent approval of his government’s response to the pandemic and 91 per cent of respondents expressing trust in his leadership. The irony of Duterte’s populist resilience amid his poor pandemic response serves to highlight his mastery of political deployment within a weak state. Two significant inputs are required to deploy state capacity into a range of outcomes: political coalitions (including leadership, classes, and parties) and a balance of social forces. The ‘politics of deployment’ depends on the quality of decision-making of state leadership and the political coalitions forged to support such decision-making. Decisions, in turn, depend on the balance of social forces—the resistance or support of various sectors in society. This paper will unpack Duterte’s deployment of ‘brute force governance’ (which he earlier employed in his bloody ‘war on drugs’) in addressing the COVID19 crisis in the Philippines.
Topic:
Populism, Pandemic, COVID-19, and Rodrigo Duterte
Political Geography:
Philippines and Asia-Pacific

533. Elementary education in India versus China: Guidelines for NEP implementation

Author:
Naveen Kumar and Vinitha Varghese
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper documents the state of elementary education in India and China since the 1960s, key lessons for India from China’s shift in focus from ‘quantity’ to ‘quality’, and evidencebased guidelines for effective implementation of India’s New Education Policy 2020 (NEP 2020). The divergent policy focus has led to differential trajectories for elementary education in the two emerging economies, with China being decades ahead in improving literacy rates. China’s adoption of the New Curriculum Reform 20 years before India’s NEP 2020 has put China on the path to achieving equitable development of ‘quality’ compulsory schooling. India’s NEP 2020 has components that have the potential to improve quality, equity, and efficiency of the education system. This paper makes the following recommendations for effective implementation of some of the NEP 2020 components: (1) an additional worker should be recruited at every preschool centre; (2) more resources should be allocated towards implementation, evaluation, and needed recalibration of the management of school clusters; (3) teacher recruitment, training, and rewards should be revamped; (4) standardized tests should be protected from data corruption, fudging, or grade inflation; and (5) a national-level road map and regular evaluations have to be introduced to ensure participation of socio-economically disadvantaged groups in education.
Topic:
Education, Literacy, and Schools
Political Geography:
China, South Asia, India, and Asia

534. On data and trends in horizontal inequality

Author:
Carla Canelas
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Economic, social, and political inequalities are at the forefront of today’s public debate. While governments around the world have made conscious efforts to promote social inclusion, and major progress in fulfilling basic needs has been witnessed during the last decades, certain groups of people are still left behind in many domains of life. This paper aims to summarize recent horizontal inequality trends across and within countries and to better understand these changes over time. Overall, horizontal inequalities have been falling in the developing world, in spite of significant country variation. Importantly, significant differences exist for different inequality dimensions, i.e. economic, social, political. In terms of data, few cross-country horizontal inequality datasets are available for research. In general, there is a trade-off between the coverage of countries and time periods as well as comparability of the results between countries and years. Contrary to vertical inequalities, there has not been a systematic effort to construct and maintain an up-to-date dataset on horizontal inequalities.
Topic:
Inequality, Ethnicity, and Data
Political Geography:
Global Focus

535. Are the effects of terrorism short-lived?

Author:
Vincenzo Bove, Georgios Efthyvoulou, and Harry Pickard
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Numerous studies demonstrate that terrorism causes strong public reactions immediately after the attack, with important implications for democratic institutions and individual well-being. Yet, are these effects short-lived? We answer this question using a quasi-experimental design and data on three successful and three foiled terrorist attacks in the United Kingdom. We find that heightened risk perceptions and emotional reactions in the wake of successful attacks do not dissipate in the very short run but are sustained over time and up to 130 days after the attacks. We also find that, whereas large-scale attacks cause a long-lasting shift in risk assessments and emotions, the corresponding effect of smaller-scale terrorism incidents appears to subside within one month. Interestingly, foiled attacks can also affect public perceptions, which, however, quickly return to normal levels. We argue that the extent of media coverage is partly responsible for the duration of these effects.
Topic:
Terrorism, Emotions, and Risk
Political Geography:
United Kingdom and Europe

536. Employment policy in Mainland Tanzania: what’s in it for women?

Author:
Roosa Lambin and Milla Nyssölä
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Tanzania has experienced relatively strong and stable economic growth accompanied by social stability over the past two decades. The country is also pursuing an ambitious development plan with significant employment objectives. For development to be fully inclusive, specific attention must be paid to the gendered dimensions of employment policy, in terms of both design and outcomes. This constitutes a key challenge in Tanzania, where women and femaleheaded households are constrained by lower levels of education and social capital, deeper levels of poverty, and limited access to assets—while also being impacted disproportionately by the economic implications of the COVID-19 pandemic. This paper interrogates Tanzania’s employment policies from a gender perspective by adopting a functional approach. We examine policies with (1) a labour market entry-facilitating function, (2) an enterprise- and productivityenhancing function, and (3) a job quality-enhancing function, through their effects on workingage women’s employment in the 2000s. We also discuss the extent to which women’s employment is considered in the broader development approach and social policy model in the country. The analysis draws on a desktop-based scoping review of diverse sources of evidence. The paper shows that several progressive policies have been introduced in the areas of financial services, labour market regulations, and entrepreneurship support, and women’s labour market position has slightly improved in the new millennium. However, women remain at the margins of the broader development strategy, and much needs to be done to enhance women’s access to assets, skills training, and better-quality employment. Further gender-responsive social policy investments would facilitate this process.
Topic:
Women, Employment, Social Policy, and Gender
Political Geography:
Africa and Tanzania

537. Is economic development affected by the leaders’ education levels?

Author:
Chandan Jain, Shagun Kashyap, Rahul Lahoti, and Soham Sahoo
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Although formal education is often considered an indicator of political leaders’ quality, the evidence on the effectiveness of educated leaders is mixed. Besides, minimum education qualifications are increasingly being used as requirements for contesting elections, making it critical to understand the role of politicians’ education in their performance. We investigate the impact of electing an educated politician on economic development in the politician’s constituency in India. We use constituency-level panel data on the intensity of night-time lights to measure economic activity. Our identification strategy is based on a regression discontinuity design that exploits quasirandom outcomes of close elections between educated and less-educated politicians. We find that narrowly electing a graduate leader, as compared to a non-graduate leader, in the state assembly constituency increases the growth rate of night-time lights by about three percentage points in the constituency. As pathways, we find that graduate leaders improve the provision of roads, electricity, and power; however, they do not significantly impact the overall provision of public goods. In comparison with findings from other studies in the literature, our result suggests that the impact of formal education of the leader is weaker than the leader’s other characteristics, such as gender or criminality.
Topic:
Education, Politics, Elections, and Leadership
Political Geography:
South Asia and India

538. Labour market effects of digital matching platforms: Experimental evidence from sub-Saharan Africa

Author:
Sam Jones and Kunal Sen
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Can digital labour market platforms reduce search frictions in either formal or informal labour markets? We study this question using a randomized experiment embedded in a tracer study of the work transitions of graduates from technical and vocational colleges in Mozambique. We implement an encouragement design, inviting graduates by SMS to join one of two local digital platforms: Biscate, a site to find freelancers for informal manual tasks; and Emprego, a conventional formal jobs website. In contrast to positive estimates of the contribution of both platforms to job outcomes from naïve (per-treatment) estimates, both intent-to-treat and complier average treatment effects are consistently zero in the full sample, while the impact on life satisfaction is negative. However, use of the informal jobs platform leads to better work outcomes for women, especially those with manual qualifications, for whom earnings rise by over 50 per cent.
Topic:
Education, Labor Issues, Digital Economy, and Unemployment
Political Geography:
Africa and Mozambique

539. What drove the profitability of colonial firms? Labour coercion and trade preferences on the Sena Sugar Estates (1920–74)

Author:
Sam Jones and Peter Gibbon
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The magnitude of returns to colonial-era investments in Africa has been addressed in an extensive literature, as have the nature and legacies of extractive colonial institutions. However, the link between these institutions and the profitability of firms remains unclear. We reconstruct the annual financial records of Sena Sugar Estates in Portuguese East Africa (today’s Mozambique) over the period 1920–74 to probe the contributions of forced labour and preferential trade arrangements to the performance of the firm. We show that Sena Sugar Estates achieved stable and solid returns to capital, comparable in size to a range of domestic UK firms. Counterfactual simulations suggest that the firm’s profitability was highly dependent on sustained access to cheap labour, but generally was not so dependent on trade preferences. At the same time, a production function analysis suggests that higher reliance on rents from forced labour was associated with lower total factor productivity at the Estates. This helps explain why extractive institutions did not translate into ‘super-profits’.
Topic:
History, Colonialism, Trade, Sugar, and Forced Labor
Political Geography:
Africa and Mozambique

540. COVID-19 and the state: Nicaragua case study

Author:
Mateo C. Jarquín
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Unlike Latin American peers, and contrary to World Health Organization recommendations, Nicaragua eschewed lockdowns and other common strategies to mitigate the spread of COVID-19. Analysts have since demonstrated how Nicaraguan authorities dramatically under-reported the number of deaths and infections that resulted (though a dearth of data complicates cross-country comparisons). Questions remain about the government’s decision to pursue a hands-off strategy in the first place. This paper argues that rather than optimizing for fewer cases and deaths, the authoritarian government of President Daniel Ortega instead attuned its pandemic response to other, political and economic, variables. In the context of a pre-existing sociopolitical crisis that threatened the regime’s legitimacy and territorial control, policy-makers were primarily interested in safeguarding macroeconomic indicators and fomenting a sense of normalcy among the populace. For related reasons, they restricted public health information and criminalized citizen-led public health efforts. In the Nicaraguan case, government and leadership mattered more than state capacity in determining the public health response.
Topic:
Authoritarianism, Leadership, State, COVID-19, and Daniel Ortega
Political Geography:
Central Asia and Nicaragua

541. Anticompetitive practices on public procurement: Evidence from Brazilian electronic biddings

Author:
Antonio Sampaio, Paulo Figueiredo, and Klarizze Puzon
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using big data from the Brazilian public procurement system, this research aims to investigate what factors are associated with the occurrence of anticompetitive practices in electronic bidding. Our analysis considers all services contracted between 2014 and 2017. The study uses the logit regression model with a dependent binary variable to model the probability of bidding fraud as a function of a vector of explanatory variables composed of the characteristics of the bidding process and of the supplier, in terms of firm size, thus quantifying the relationship between the explanatory variables and the probability of fraud occurrence. We find that firm size and the Apparent Overbilling Index which we propose are associated with the occurrence of fraud and anticompetitive practices in electronic auctions. This study contributes to the accumulation of empirical and theoretical knowledge, expanding safer bases for governments and society in the fight against corruption.
Topic:
Fraud, Economic Competition, and Public Procurement
Political Geography:
Brazil and South America

542. Poverty, inequality, and growth: trends, policies, and controversies

Author:
Ines A. Ferreira, Vincenzo Salvucci, and Finn Tarp
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Reducing poverty and inequality and promoting inclusive growth are fundamental to achieving the United Nations Sustainable Development Goals. Much has changed in the global economy in recent decades and perspectives on progress made vary widely. This is even more so in light of the ongoing COVID-19 pandemic. However, getting to grips in a meaningful manner with existing trends is critical to evidence-based policy-making. This contribution aims to provide an original review and evaluation of the main stylized facts concerning poverty, inequality, and growth. It will uncover existing trends, put controversies into perspective, and help to provide a platform for informed policy debate.
Topic:
Poverty, Inequality, Sustainable Development Goals, and Economic Growth
Political Geography:
Global Focus

543. Residual capacity and the political economy of pandemic response in Ghana

Author:
Kofi Takyi Asante
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
On the whole, poor countries in Africa and elsewhere seem to have weathered the coronavirus (SARS-CoV-2, or COVID-19) pandemic better than wealthier countries with superior healthcare systems. Using the Ghanaian case, this paper draws on newspaper articles, policy statements, and other secondary sources to explain how the country’s competitive clientelist political settlement mediated the public health outcomes of the pandemic. It argues that while it lacks overall state capacity, Ghana was able to surmount the limitations of its weak and underresourced public health system by leveraging ‘residual capacity’ from previous public health programmes and a strong proactive response from the continental and subregional organizations. The government’s strong early response enabled it to gain control of the situation in the crucial first few months of the outbreak. However, with an upcoming election later in the year and unwilling to bear the political costs of sustaining its initial efforts, the government subsequently wavered in its response. The country’s infection and death rates spiked and dipped in response to these waves of enforcement. The paper concludes with a brief discussion of the limits of ‘residual capacity’ in public service delivery.
Topic:
State, Public Health, Settlements, COVID-19, and Clientelism
Political Geography:
Africa and Ghana

544. Pandemic precarity and the complicated case of Maharashtra: Interrogating state capacity and its fault lines

Author:
Manish K. Jha
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The state of Maharashtra and the city of Mumbai have been referred to as the epidemic epicentre of India since the time of the plague of 1896 and influenza epidemic of 1918. During the COVID-19 pandemic too, the state experienced the highest cases with maximum fatalities. Against the structural backdrop of India’s underfinanced public health infrastructure, this paper engages with the subnational state’s capacity, legitimacy, and authority in managing the pandemic. The paper highlights the socio-economic and spatial-demographic context to explain the reasons behind the severity of the pandemic in Maharashtra. Through an analysis of regulatory information at different levels during crucial phases of the pandemic, and statistics about tests, caseloads, medical resources (such as hospital beds, essential drugs, and oxygen), migrants’ welfare, excess deaths, vaccines, etc., the paper explores how knowledge about the unfolding crisis and the capacity to respond kept changing as the pandemic progressed. The emphasis is on demonstrating how the state improved its response, from a situation of confusion to an augmentation of infrastructure and a coordinated response. Despite fiscal constraints and centre-state tensions, the reliance on rational bureaucracy, scientific knowledge, and the decentralization of the response helped to develop several models and good practices that were widely acknowledged. The paper emphasizes that the case of Maharashtra underscores the importance of decentralized planning and recognizes the value of collaborative federalism.
Topic:
Vaccine, Pandemic, COVID-19, Migrants, and Excess Deaths
Political Geography:
South Asia and India

545. Female labour supply and informal employment in Ecuador

Author:
H. Xavier Jara and Pia Rattenhuber
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Low- and middle-income countries face a trade-off between raising tax revenue to strengthen social protection and creating incentives for the population to enter formal employment. However, empirical evidence on labour supply elasticities in the presence of informal employment remains scarce. This paper analyses female labour supply behaviour and the choice between formal and informal employment in Ecuador, a middle-income country characterized by persistent levels of informal employment particularly among women. We use two methods to estimate and compare formal employment elasticities: (i) a discrete choice model of labour supply with informality and (ii) grouped-data estimation techniques. For identification, we exploit variation in tax–benefit policies covering the period 2011–19, using microsimulation techniques applied to household survey data. Our results show that, on average, formal employment elasticities for single women are low regardless of the approach chosen. However, for women in couples, formal employment elasticities are larger under the discrete choice approach whereas they are low and non-significant under the grouped-data estimations.
Topic:
Labor Issues, Women, Employment, and Tax Systems
Political Geography:
Central America and Ecuador

546. Wartime governance and state-building trajectories in post-conflict societies

Author:
Patricia Justino
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
To date, there is limited understanding about the consequences of wartime dynamics for post-war state-building processes. This paper explores one such dynamics—the forms of governance exercised by armed groups during wartime—and proposes a theoretical framework outlining how forms of wartime governance affect trajectories of state-building in the aftermath of civil wars. Six possible trajectories are mapped out: stable democracy, weak democracy, stable autocracy, fragmented rule, contested autocracy, and durable disorder. Each trajectory is shaped by the interaction between two dimensions of wartime governance: how armed groups build institutional capacity in wartime and the characteristics of wartime civilian rule by armed groups. The core argument is that civil wars generate within themselves bureaucratic and institutional capacity—through how armed groups govern territories and civilians within them—that under certain circumstances may be harnessed in the post-war period to build states capable of governing. The characteristics and durability of those forms of wartime governance shape the type of statebuilding and political regime trajectories that emerge in the post-war period.
Topic:
Political Violence, Development, War, Conflict, Peace, and State Building
Political Geography:
Global Focus

547. Health and ethnic inequalities in Mozambique with special reference to leprosy

Author:
Isabel Maria Casimiro and Júlio Machele
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The subject of this paper is health and ethnic inequalities in Mozambique, with special reference to leprosy. It is argued that the health policies and strategies adopted in the colonial and post-colonial periods led to an unequal distribution not only of certain diseases but also of health infrastructures. The colonial regime, by neglecting and creating ineffective leprosaria in central and northern Mozambique, ‘ethnicized’ Lazarus disease, a fact corroborated by its current unequal distribution. In turn, post-colonial health policies and health coverage failed to take this inequality into account. The current National Leprosy Control Program aims to end leprosy and thus eliminate its identification with the ethnolinguistic groups in northern and central Mozambique. This qualitative study, which draws on reports from the Ministry of Health and NGOs, statistics, and observations, falls within the scope of the social sciences, with an emphasis on the comparative historical-sociological method.
Topic:
Health, Inequality, Ethnicity, and Leprosy
Political Geography:
Africa and Mozambique

548. Aid’s impact on democracy

Author:
Miguel Niño-Zarazúa, Ana Horigoshi, and Rachel M. Gisselquist
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper investigates the impact of foreign aid on democratic outcomes using a panel of countries for the period between 1995 and 2018. In so doing, it speaks to a major critique of foreign aid, which is that it negatively impacts democratic governance. The analysis distinguishes between developmental aid and democracy aid, and examines democracy aid to specific sectors, in order to explore variation across different aid types. It draws on the Organisation for Economic Co-operation and Development’s (OECD) Creditor Reporting System (CRS) data on foreign aid and indices of democracy from the Varieties of Democracy project, employing a combination of a maximum likelihood estimation and structural equation modelling (ML-SEM) model and fixed effects models. Overall, using a more extensive set of data and methods than previous analyses, we offer comprehensive evidence pointing to aid having a positive if modest impact on democratic outcomes. Our analysis suggests this effect is more significant for democracy aid than developmental aid, but there is no evidence of negative impact for either. These results are robust to multiple specifications.
Topic:
Development, Foreign Aid, and Democracy
Political Geography:
Global Focus

549. Global oil theft: impact and policy responses

Author:
Etienne Romsom
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper, the first of two on global oil theft and fraud, discusses the prevalence, methods, and consequences of global oil theft, valued at US$133 billion per year and equivalent to 5–7 per cent of the global market for crude oil and petroleum fuels. However, the impact of oil theft is significantly larger than the value of theft itself. Government tax yields have been assessed for 30 developing countries associated with oil theft and found to be significantly lower than in the International Monetary Fund’s benchmark study. Oil theft, smuggling, and illicit trade in petroleum products are often seen as lesser forms of crime than human trafficking, the drugs trade, smuggling of weapons, kidnapping, and terrorism. However, oil theft as an act of opportunity tends to evolve into organized crime and, if left unchecked, oil theft may interlink with other organized crime activities and groups. Actions against oil theft should target the transnational crime syndicates that continue to find ways to replicate their thefts by adapting their theft strategies and business models. However, there is a lack of basic data, including how much oil is stolen, how the stolen oil is transported, and how illicit oil transactions are conducted. The mixing of legal commercial operations with illegal oil theft activities and fraud obscures many oil theft crimes.
Topic:
Corruption, Oil, International Crime, and Tax Evasion
Political Geography:
Global Focus

550. The legacies of armed conflict: insights from stayees and returning forced migrants

Author:
Isabel Ruiz and Carlos Vargas-Silva
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
How does conflict, displacement, and return shape trust, reconciliation, and community engagement? And what is the relative impact of exposure to violence on these indicators? In this paper we explore these questions by focusing on the legacies of armed conflict and the differences between those who stayed in their communities of origin during the conflict (stayees) and those who were displaced internally and internationally and who returned home over time (returnees). The results, which rely on analysis of data we collected in Burundi, suggest that internal returnees have significantly lower levels of trust, reconciliation, and community engagement than stayees, whereas the differences between international returnees and stayees are mostly statistically insignificant. Greater exposure to violence has a more positive effect on trust for returnees compared to stayees. On the other hand greater exposure to violence has a more negative effect on reconciliation and community engagement for returnees compared to stayees.
Topic:
Displacement, Conflict, Reconciliation, Trust, and Migrants
Political Geography:
Global Focus

551. Does the adoption of peer-to-government mobile payments improve tax revenue mobilization in developing countries?

Author:
Abdoul-Akim Wandaogo, Fayçal Sawadogo, and Jesse Lastunen
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Developing countries need to raise sufficient tax revenue to finance development. Revenue mobilization is often hampered by limited tax compliance, weak institutions, and technical problems with tax collection. One solution to these challenges is person-to-government (P2G) mobile phone payments, adopted in a number of developing countries since the early 2000s. This study assesses the causal effect of P2G adoption on tax revenue using propensity score matching. According to the matching estimates, countries that adopt P2G services experience a 1.2–1.3 percentage point boost in direct tax revenue as a share of GDP. P2G adoption increases revenue from both corporate and personal income taxes, with larger effects on the latter. The results remain robust to matching quality tests and alternative estimation methods, including function control, two-stage least squares, and system generalized method of moments. The average treatment effects are largest among lower-middle-income countries and countries characterized by limited tax compliance and corruption control, and by low levels of urbanization and domestic credit to the private sector. The findings suggest that developing countries, particularly those with poor institutions and low levels of financial inclusion, should promote the adoption and use of mobile money services for tax transactions.
Topic:
Development, Government, Finance, Economy, and Tax Systems
Political Geography:
Global Focus

552. Revisiting the links between economic inequality and political violence: The role of social mobilization

Author:
Patricia Justino
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The main aim of this paper is to explore theoretically important mechanisms through which economic inequalities may affect the emergence of political violence given the forms of social mobilization they (may) generate. The paper identifies and explores two mechanisms under which social mobilization in unequal societies may result in either non-violent or violent collective action and, ultimately, in violent conflict. The first condition is the level of social cooperation between different social groups that are formed during the process of social mobilization. The second is the efficacy of collective action to drive change, which is in turn shaped by the ability of individuals within groups to coordinate their actions. Forms of social mobilization become violent when antagonism is the dominant form of social interaction between different social groups in unequal societies, and when each of these social groups exhibits high levels of internal coordination.
Topic:
Political Violence, Economics, Social Movement, Inequality, Mobilization, and Collective Action
Political Geography:
Global Focus

553. Women’s inheritance rights and time use: Evidence from the Hindu Succession Act in India

Author:
Tana Gupta
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of the Hindu Succession Act on married women’s time use in India. The Hindu Succession Act was amended between 1976 and 2005 by giving equal inheritance rights to women for inheriting property. To estimate the effect of the equal inheritance reform, I devise a difference-in-difference strategy by exploiting the features of the reform. Using the nationally representative Time Use Survey 2019, I find that women exposed to the reform are investing 46 minutes per day more in employment. Moreover, women exposed to the reform are spending 44 minutes per day less time on home production, with no change in their leisure time. By looking at the individual components of home production, I find that the reduction in home production is driven on account of a decline in time spent on domestic chores, with no change in childcare work. In addition, I find that women exposed to reform devote slightly more time to learning. This implies that the reform has led women to substitute their time from home production to market work. These findings are consistent with an increase in women’s autonomy effect. I also find evidence of intra-household substitution of home production work for exposed women through sharing the burden of home production by other household members, especially the male members. This suggests that inheritance reform could be a form of reversal of the devaluing of women’s domestic and reproductive labour.
Topic:
Women, Inequality, Legislation, and Inheritance
Political Geography:
South Asia and India

554. Profit-shifting behaviour of emerging multinationals from India

Author:
Khanindra Ch. Das
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial Centre (OFC). The impact of the corporate tax rate on profitability is examined using a fixed-effects model for the period 2010–19. In the case of subsidiaries established via OFCs, a negative relationship between corporate tax rate and profitability is found, indicating profit-shifting behaviour. However, a disaggregated investigation by characteristics of parent firms reveals that the negative relationship holds primarily for via-OFC subsidiaries that belong to multinational firms with limited transactions of intangible assets, lower export intensity, and limited dependence on external commercial borrowing. The evidence of profit shifting is not all pervasive. However, in the presence of these transaction channels, multinational firms establish better control over intra-firm resources, which enables the transfer of resources within the multinational firm when the network of subsidiaries is connected through the OFC. The results are robust to the inclusion of economic and institutional factors pertaining to the host country.
Topic:
Finance, Multinational Corporations, Profit, Corporate Tax, and Tax Havens
Political Geography:
South Asia and India

555. Does aid to the productive sectors cause manufacturing sector growth in Africa?

Author:
Alain Ndikumana
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In recent decades, Africa has received a large share of official development assistance compared to other regions of the world. Using AidData for 2000–13, this paper examines the effects of aid to productive sectors on manufacturing growth in Africa. Econometric results show that increased assistance to these sectors is associated with an increase in growth of the manufacturing sector, with complementary effects from allocations to economic services and infrastructures. However, dynamic panel regression results show a positive long-term link between increased official development assistance to productive sectors and growth of the manufacturing sector. These findings make an important contribution to the economic literature where there is controversy over aid effectiveness at the macro level. The findings also have policy implications for allocation of aid between sectors by making rational trade-offs related to their amount and quality, with emphasis on productive sectors where investment has a major impact on growth of the manufacturing industry.
Topic:
Humanitarian Aid, Economic Growth, Manufacturing, and Development Assistance
Political Geography:
Africa

556. Impact of teacher content knowledge on student achievement in a low-income country

Author:
Anna Holvio
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper estimates the causal impact of teacher content knowledge on student achievement in Mozambique, a low-income country where a large share of fourth-graders fail to meet the minimum requirements of literacy and numeracy. I use nationally representative data from the Service Delivery Indicator survey, and exploit within-student across-subject variation in a sample of students taught by the same teacher in maths and Portuguese, thus circumventing bias caused by unobserved student and teacher heterogeneity. I find that, on average, teacher content knowledge does not have an impact on student achievement. However, the impact varies significantly by student’s first language, urban or rural location of the school, and the match of students and teachers in their knowledge.
Topic:
Education, Literacy, and Teachers
Political Geography:
Africa and Mozambique

557. Measuring illicit financial flows: A gravity model approach to estimate international trade misinvoicing

Author:
Lourenço S. Paz
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Illicit financial flows have recently attracted the attention of academia, practitioners, and multilateral organizations who consider them harmful to economic development. Some observers suggest that many of these flows occur via the misinvoicing of international trade transactions. This study develops a novel methodology based on the gravity model of international trade to estimate illicit financial flows using publicly available product-level international trade data. It contributes to the literature by estimating product-level transportation and insurance costs and providing, for the first time, an estimation for all countries of an upper bound of the values of export and of import over- and under-misinvoicing separately, without resorting to assumptions about trade statistics reliability. Application of the methodology is illustrated using six-digit product-level UN Comtrade data for 2013–16. The results indicate that misinvoicing is not confined to a few products or countries but is a widespread phenomenon that deserves future research.
Topic:
International Trade and Finance, Transportation, Illicit Financial Flows, and Misinvoicing
Political Geography:
Global Focus

558. Ethnic dominance and exclusion: Unpacking cross-national data

Author:
Andrea Vaccaro
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is widely accepted that the distribution of power between ethnic groups within a country plays a key role in major social, political, and economic outcomes. Researchers working on the topic have various measures of ethnic dominance and exclusion, and other closely related aspects such as ethnic fractionalization, polarization, and heterogeneity, available to them. These measures are, however, often used without sufficient critical reflection and their empirical differences are not entirely understood. The literature does not provide too much guidance either. In fact, efforts to comparatively evaluate data on how power is distributed between ethnic groups are in short supply. To address this gap in the literature, the study at hand provides a comprehensive descriptive analysis of publicly available common cross-national country-level measures on ethnic dominance and exclusion. The findings of this study suggest that Varieties of Democracy’s Exclusion by Social Group and Ethnic Power Relations’ Ethnic Exclusion are more alike than the other measures under scrutiny, yet in general the empirical differences among common measures of ethnic dominance and exclusion are substantial. Scholars should thus reject an ‘any measure will do’ approach when choosing among competing measures.
Topic:
Ethnicity, Data, and Exclusion
Political Geography:
Global Focus

559. Taxless fiscal states: Lessons from 19th-century America and 21st-century China

Author:
Yuen Yuen Ang
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
How do modern fiscal states arise? Perhaps the most dominant explanation, based on the European experience, is that democratic institutions that limited the extractive power of states—exemplified by the 1688 Glorious Revolution in England—paved the way for the rise of fiscal capacity and subsequent prosperity. Revisionist accounts, however, reveal that this dominant narrative is flawed. In fact, numerous factors converged to enable the rise of European fiscal states, and in England, debt and land were particularly salient factors. Building off this literature, I bring attention to the role of ‘taxless public financing’ (i.e. financing public infrastructure through means other than taxation) in the making of fiscal states in two seldom compared cases: 19th-century America and 21st-century China. Both countries relied heavily on taxless financing to launch an infrastructure boom that spurred rapid growth along with massive corruption and financial risks.
Topic:
History, Finance, Tax Systems, and Land
Political Geography:
China, Asia, North America, and United States of America

560. The global inequality boomerang

Author:
Ravi Kanbur, Eduardo Ortiz-Juarez, and Andy Sumner
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we argue that the decline in global inequality over the last decades has spurred a ‘sunshine’ narrative of falling global inequality that has been rather oversold, in the sense, we argue, it is likely to be temporary. We argue the decline in global inequality will reverse due to changes in the between-country component. We find there is a potentially startling global inequality ‘boomerang’, possibly in the mid-to-late 2020s, which would have happened even if there were no pandemic, and that the pandemic is likely to bring forward the global inequality boomerang.
Topic:
Inequality, Pandemic, and COVID-19
Political Geography:
Global Focus

561. Impact of female peer composition on gender norm perceptions and skills formation in secondary school

Author:
Martina Querejeta
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines peer effects on students’ gender norm perceptions and skills formation. I use a Uruguayan nationally representative survey of 9th grade students and exploit the quasi-random variation in the proportion of female peers across classes within schools for causal identification. Results show that a higher exposure to female peers in the class leads to more progressive gender norms. Furthermore, these effects in gender perceptions are driven mostly by male students. Female students are also impacted by peers’ sex composition and significantly reduce the time devoted to domestic work and improve mathematics scores when exposed to more female peers. No effects on language were found for either sex. Thus, exposure to female peers operates not only by reducing traditional gender perceptions but also by changing actual behaviour regarding housework and academic performance of female students. My results suggest that short peer interactions in secondary school contexts may have substantial effects on reducing gender stereotypes and change gendered behaviours among students.
Topic:
Developing World, Inequality, Peer Effects, and Gender Norms
Political Geography:
Global Focus

562. Monetary policy in South Africa, 2007–21

Author:
Patrick Honohan and Athanasios Orphanides
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper reviews South Africa’s monetary policy since 2007 and makes recommendations towards improving the inflation-targeting framework currently in place. Following a surge in inflation into double digits in 2007/08, the South African Reserve Bank managed to guide inflation in line with the 3–6 per cent target band. Estimates of South Africa’s potential output underwent successive downward revisions. The resulting output gap misperceptions contributed to the tendency of inflation to be closer to the upper edge of the band in the 2010s. Our assessment is that the current definition of the target is not ambitious enough and reduces the benefits that inflation targeting could otherwise provide. An eventual point target of 3 per cent would better promote growth and protect the value of the currency, as mandated by the Republic’s Constitution.
Topic:
Monetary Policy, Economy, History, and Inflation
Political Geography:
Africa and South Africa

563. Two decades of Tanzanian health policy Examining policy developments and opportunities through a gender lens

Author:
Roosa Lambin and Milla Nyyssölä
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Tanzania has undertaken important health sector reforms in the new millennium, and the most recent Health Sector Strategic Plan (2021–26) lays out ambitious targets to achieve universal health coverage. Yet, women in Tanzania continue to face significant barriers in accessing healthcare and the country is grappling with important gender-biased health challenges disadvantaging women. The aims of this paper are two-fold. First, we examine the evolution of Tanzania’s health policy over the past two decades (2000–21) from the perspective of enhancing financial protection for working-age women. Second, we explore policy options for genderresponsive health insurance expansion in the context of Tanzania. Methodologically, the paper draws on a scoping study of diverse literature and data and a review of evidence from other contexts with public health insurance schemes. We find that Tanzania has a fragmented health system that relies on several independent schemes introduced throughout the years, characterized by insufficient risk-pooling. Such a system provides insufficient financial protection for workingage women and female-headed households, which are financially less secure than dual-earner households. Although expanding health insurance coverage represents a viable corrective measure, future reforms must account for women’s lower financial contribution capacity to enable equitable access. Additionally, the policy design requires gender-mainstreamed investments in awarenessraising, service quality, and benefit packages.
Topic:
Health Care Policy, Reform, Women, Finance, and Health Insurance
Political Geography:
Africa and Tanzania

564. Affirmative action with no major switching: Evidence from a top university in Brazil

Author:
Rodrigo C. Oliveira, Alei Santos, and Edson Severnini
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Affirmative action in higher education may lead to mismatch, a situation where students benefiting from preferential admission struggle with their college-level work because of poor precollege academic preparation. In the United States, those students can switch majors if they underperform in the originally intended major. Only in the extreme may they drop out. What happens when major switching is not allowed? In this paper, we examine the margins of adjustment for beneficiaries of affirmative action in a top university in Brazil, where prospective students must choose a major prior to the entrance test, and cannot switch it while in college. Surprisingly, we do not find a larger effect on dropout rates relative to the United States, and also provide evidence of strong catching up for students who remain in school. Because they fail more courses early on, to successfully graduate students benefiting from preferential admission end up reducing the number of credit hours taken in the first and second college years, but compensate by taking more credit hours in the final years.
Topic:
Higher Education, Students, and Affirmative Action
Political Geography:
Brazil and South America

565. Affirmative action: meaning, intentions, and impacts in the big picture

Author:
Satu Kuitunen
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper provides a broad overview of the meaning of affirmative action and its intended and unintended impacts. The paper is a literature review and does not make any arguments specifically for or against affirmative action but describes the broad arguments and findings in the existing literature. Central to the definition of affirmative action is its proactive nature in rectifying horizontal inequalities and historical wrongdoing. Motivations can be ethical, economic, or political. The designation criteria and the scope of affirmative action also vary across countries, which affects how its effectiveness and value are measured. Affirmative action can have positive intended impacts as well as adverse unintended impacts, and the jury is still out on its overall effectiveness. Affirmative action has also been implemented on the grounds of conflict management, but the results have been mixed, and the evidence of affirmative action as a conflict management tool is limited.
Topic:
Education, Inequality, Literature Review, and Affirmative Action
Political Geography:
Global Focus

566. The indirect costs of corporate tax avoidance exacerbate cross-country inequality

Author:
Javier Garcia-Bernardo, Daniel Haberly, Petr Janský, Miroslav Palanský, and Valeria Secchini
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Corporate tax avoidance hampers domestic revenue mobilization and, with it, the development of lower- and middle-income countries. While a wide range of studies has shed light on the magnitude of profit shifting by multinational corporations, the indirect costs of this behaviour is underexplored. These indirect costs are likely to be skewed based on a country’s level of income. We hypothesize that developed countries tend to recover a larger part of corporate tax revenue losses (primary effects or direct costs) via capital gains and dividend taxes on corporate investors (secondary effects). Furthermore, developed countries can offset tax losses by borrowing in financial markets at very low interest rates (tertiary effect or, together with secondary effects, indirect costs). In this paper, we introduce a dynamical model that includes not only corporate tax revenue losses but also tax revenue collected from capital gains and dividend taxes, as well as government borrowing costs. We use country-by-country reporting data on the operations of multinational corporations to estimate profit shifting, alternative operationalizations of the location of investors to proxy the tax revenues from capital gains and dividend taxes, and yields on government bonds to measure the cost of borrowing. Our results show that when these indirect costs are included, the total cost of profit shifting for developing countries increases significantly, while some developed countries can often offset or recover the majority of the direct costs of profit shifting. The ability of the latter to do this is, however, uneven with, for example, most European countries losing revenues from profit shifting even after indirect effects are taken into account. Only a handful of other countries actually appear to profit from profit shifting—and by an amount that is far smaller, in relation to gross domestic product, than the losses suffered by others.
Topic:
Inequality, Multinational Corporations, Tax Systems, and Tax Havens
Political Geography:
Global Focus

567. The Tanzanian state response to COVID-19: Why low capacity, discursive legitimacy, and twilight authority matter

Author:
Amy S. Patterson
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Tanzania received significant global attention for its COVID-19 response during the first year of the pandemic. It did not share pandemic statistics, require masks, implement lockdowns, or close borders; it questioned testing and vaccine efficacy; and it emphasized traditional medicines as a cure. The country’s response reflected a centralized, paternalistic state that emerged under postcolonial president Julius Nyerere and that stressed self-reliance and national unity. Although local officials did have some discretion to respond, the state’s top-down solutions, its low capacity, and the broader campaign against bureaucratic corruption curtailed the space in which they could act. Nyerere’s legitimating discourse of nationalism, self-reliance, and paternalism further problematized the global cooperation needed to address the pandemic and limited the space in which civil society could challenge state actions. The state’s struggle for authority in the face of nonstate actors such as opposition parties and civil society groups led it to embrace strategies such as electoral authoritarianism to maintain control, thereby obscuring transparency and accountability in the pandemic. The focus on state capacity, legitimacy, and authority situate individual leaders’ actions in broader structural contexts, while also showing African state agency.
Topic:
Nationalism, Authoritarianism, Elections, Legitimacy, Capacity, and Authority
Political Geography:
Africa and Tanzania

568. Countering global oil theft: responses and solutions

Author:
Etienne Romsom
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This second of two papers on global oil theft discusses ways to reduce oil theft, misappropriation, and fraud. At US$133 billion per year, oil is the largest stolen natural resource globally, while fuel is the most smuggled natural resource. Oil theft equates to 5–7 per cent of the global market for crude oil and petroleum fuels. It is so engrained in the energy supply chain that thefts are priced in by traders and tolerated by many shipping companies as petty theft. Oil theft and related insecurity have substantial negative economic effects on developing countries, whether they produce oil or not. In 2012, non-oil-producing Benin saw a 28 per cent drop in taxable income after a spate of oil tanker hijacking incidents in the Gulf of Guinea in 2011. In Nigeria, the oil capacity shut-in and amount of oil deferred is more than twice the amount estimated as stolen, with a US$20 billion annual loss in petroleum profit tax—63 per cent of total government tax revenue in 2019. Organized oil crime syndicates are often transnational and conduct theft and fraud professionally, exploiting gaps in jurisdiction and adapting their practices when law enforcement becomes more effective. They evolve from ship piracy to stealing tanker cargoes to kidnapping tanker crews; from physical ransom of assets to digital hijacking via ransomware. The proceeds of oil theft often finance other organized crime, and it triggers violence against the community and in crime-on-crime activities. Twelve commonalities in oil theft and fraud have been identified that can direct international solutions, in three target areas: stolen oil volumes, stolen oil transport, and stolen oil money. Prosecution for acts of bribery offers opportunities for action: transport of or payment for illegal oil could constitute a bribe under the US Foreign Corrupt Practice Act if government officials were involved in the transaction or shipment. Bribe charges could be raised for paid ‘services’ that facilitate oil theft (through action or non-action).
Topic:
Corruption, Oil, Piracy, Cybersecurity, Fossil Fuels, Tax Evasion, and Theft
Political Geography:
Global Focus

569. Profit shifting by multinational corporations: Evidence from transaction-level data in Nigeria

Author:
Bathusi Gabanatlhong, Javier Garcia-Bernardo, Paulinus Iyika, and Miroslav Palanský
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Research on profit shifting by multinational corporations in developing countries is limited due to a lack of data. In this paper we use, for the first time, novel administrative data on the transactions of multinational corporations operating in Nigeria vis-à-vis related parties in other jurisdictions. The data provides a breakdown of these intra-group transactions into seven categories: (1) tangible goods, (2) services and fees, (3) royalties, (4) interest, (5) dividends, (6) reimbursements, and (7) other. We develop a methodology that uses this data to identify which transactions are most often used by multinationals to shift profits out of Nigeria and estimate their relative importance. We find that profits reported in Nigeria are highly sensitive to the hypothetical tax that would be paid on a transaction’s value in the partner jurisdiction: a 1 per cent increase in the hypothetical tax on outgoing transactions is associated with a 0.28 per cent increase in reported profits in Nigeria. Payments for services and fees, royalties, and interest going from Nigerian companies to affiliates in low-tax countries are the most important channels of profit shifting in Nigeria. We argue that our approach can be used to inform low-cost policy interventions and increase audit efficiency with potentially strong effects on corporate income tax collection.
Topic:
Multinational Corporations, Profit, Transactions, and Tax Havens
Political Geography:
Africa and Nigeria

570. Corruption and crisis: do institutions matter?

Author:
Shrabani Saha and Kunal Sen
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
While the short-term effects of the COVID-19 pandemic on lives and livelihoods are well understood, we know little about the effect of the pandemic for longer-term outcomes such as corruption. We look at the historical data on political and economic crises to assess what we can learn from the long-term effects of past crises on corruption. We hypothesize that strong rule of law institutions may ameliorate the possible adverse effects of political and economic crises on corruption. We test our hypotheses using panel data for over 100 countries during the years 1800– 2020. The results suggest heterogeneous effects depending on the type of crisis and how we measure it. We find that rule of law institutions can control corruption in cases of political violence and economic slowdown, but the effect is not seen for democracy breakdowns, coups, armed conflict and civil war, and economic crisis such as currency and debt crisis.
Topic:
Corruption, Politics, Rule of Law, Institutions, Data, COVID-19, and Economic Crisis
Political Geography:
Global Focus

571. Exploring social policy trajectories in Mainland Tanzania: Driving for gender-inclusive development?

Author:
Roosa Lambin and Milla Nyyssölä
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In July 2020, the United Republic of Tanzania gained the status of a lower-middleincome country. This came after two decades of significant social policy reforms and transformations in the country’s economic structures. This paper explores social policy trajectories in Mainland Tanzania with a gender lens, to better understand the contributions of these developments to inclusive development. More precisely, we examine past and current policy developments across the areas of health policy, social protection, and employment policy, and the level, reach, and quality of government social policy delivery to working-age women. The paper draws on a scoping review of diverse secondary materials, including academic publications, government policy documents, relevant statistics, and other types of literature. The findings indicate that despite significant advancements in the legal frameworks and increasingly gender-responsive government policy plans, Tanzanian social policy delivery remains two-tiered, with differences in provisions for women in the formal and informal sectors. Additionally, women continue to be largely overlooked in the broader industrialization and development strategy, which hinders the achievement of inclusive development in Tanzania.
Topic:
Development, Social Policy, Inclusion, and Gender
Political Geography:
Africa and Tanzania

572. Profit shifting by multinational corporations in Kenya: The role of internal debt

Author:
Roseline Misati, Kethi Ngoka, Anne Kamau, and Maureen Odongo
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Illicit financial flows directly impact a country’s ability to raise, retain, and mobilize its own resources to finance sustainable development. Against a backdrop of a weak public financial position attributed to capital flight, tax avoidance, and dependence on corporate income taxes, governments in Africa face impediments to their efforts to widen the tax base. Using firm-level annual data from 2015–19 from multinational corporations’ audited financial statements, we assess the scale of profit shifting by those corporations with a presence in Kenya. Using a panel analysis, the study delves into the incentives for profit shifting, focusing on internal debt. It finds that a 10 per cent increase in the difference between Kenya’s corporate tax rate and that of the lending corporation’s home country increases the internal debt ratio by between 1 and 2 per cent. The results provide a basis for the design of targeted tax and revenue administration reforms against the backdrop of rising revenue needs.
Topic:
Multinational Corporations, Tax Systems, Profit, and Corporate Tax
Political Geography:
Kenya and Africa

573. Whose intergenerational mobility? A new set of estimates for Indonesia by gender, geography, and generation

Author:
Diding Sakri, Andy Sumner, and Arief Anshory Yusuf
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Various scholars have estimated levels of intergenerational mobility in OECD countries. Fewer estimates are available for developing countries, where mobility arguably matters more due to starker differences in living standards. This paper presents new estimates of mobility for a developing country, namely Indonesia. The estimates are based on data from five waves of the Indonesian Family Life Survey, a longitudinal analysis of socio-economic status which began in 1993. We constructed a pooling sample consisting of 9,445 matching pairs of children and their parents. The paper estimates relative mobility using the intergenerational elasticity of income. We find that although, overall, the intergenerational elasticity of income is low compared with other developing countries, the level of mobility in Indonesia differs markedly by children’s gender and across provinces and generations.
Topic:
Mobility, Family, Survey, and Longitudinal Analysis
Political Geography:
Indonesia and Southeast Asia

574. Saudi Arabia’s Engagement in the Israeli-Palestinian Peace Process

Author:
Ksenia Svetlova
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
During the last few decades Saudi Arabia had exercised a role of a regional coordinator between various Middle Eastern states and between them and the USA. Twice in the past it had put on the table a peace initiative that was aimed at finding an acceptable solution for Palestinian-Israeli conflict, and both times these initiatives didn’t take off for various reasons. The reality of the Arab spring and Iran domination, as well as the rise of the crown-prince Muhammad Bin-Salman and Abraham accords had radically altered the regional dynamic, and during the last few years Saudi Arabia moved closer to Israel, especially since it became more preoccupied with Iranian threat and domestic reforms. How can Saudi Arabia facilitate peace or contribute for peace-making between Israel and Palestinians, openly or behind the scenes, and what needs to happen first to allow this scenario?
Topic:
Foreign Policy, Treaties and Agreements, Peace, and Abraham Accords
Political Geography:
Middle East, Israel, Palestine, and Saudi Arabia

575. Palestinian Expectations from The Biden Administration

Author:
Rawan AbuJulia
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
The United States’ (US) foreign policy trend of intervention in the Middle East has long been accepted as a truism in international relations and politics. For decades, the US has demonstrated a steadfast commitment to peace in the Middle East and has made commendable efforts to mediate the Israel-Palestine conflict. While Washington-Palestinian relations experienced tension during Trump presidency, the victory of Biden left the Palestinians upbeat. Today, one year into Biden’s tenure, the Palestinians continue to hold mixed expectations of the Biden administration’s ability to advance the peace process. This paper attempts, in particular, to analyze the Palestinians’ expectations of the of the Biden Administration, as articulated by high officials and leaders of the Palestine Liberation Organization (PLO): a legitimate authority representing the Palestinian people recognized by Israel in 1993.[1] An approach that aims to understand Palestinian expectations can yield major benefits: it can contribute to making progress toward better conflict resolution, help advance the peace process, and likely revive the two-state solution. In fact, ignoring Palestinian expectations might lead to misunderstanding, miscommunication and could perhaps interrupt or even thwart the peace process entirely. To identify these expectations, this paper relies on Palestinian and international news sources, along with open governmental data published by the US government and the Palestinian Authority. This paper is divided into four sections. The first section presents the efforts that different US administrations made to advance the Israeli-Palestinian peace process. The second section summarizes President Trump’s policy towards the Palestinians, highlighting actions that provoked strong condemnation by the Palestinians. The third section presents President Biden’s policy toward the Palestinians in the first year of his administration, emphasizing the main differences between Biden and Trump’s decisions. The fourth and final part presents the overarching Palestinian expectations from the Biden administration.
Topic:
International Relations, Foreign Policy, Media, News Analysis, Peace, and Joe Biden
Political Geography:
Middle East, Israel, Palestine, and United States of America

576. ‘Peace through Health’ in the Israeli-Palestinian conflict: Ground for dialogue or guise for continued occupation?

Author:
Yotam Rosner
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
“Peace through Health” is a theoretical and applied approach that sees humanitarian health initiatives as a primary basis for dialogue and cooperation between adversaries. This approach posits that health initiatives can spawn increased discourse and dialogue between parties to a conflict, build trust and promote cooperation on various issues, eventually facilitating the transition from conflict to peace. Based on interviews with representatives of an Israeli human rights organization that provides health services in the Occupied Territories, this article examines the implementation of the “peace through health” approach in the Israeli-Palestinian conflict. Under the Oslo Accords, Israel handed responsibility for the health of the Palestinian population to the Palestinian Authority (PA).However, continued Israeli control and absence of full Palestinian sovereignty have resulted in a weakened and poor Palestinian health system. The severe shortage of health resources has created growing Palestinian dependence on local and international humanitarian health organizations, including health professionals from the Israeli side. An analysis of the interviews conducted for this article indicates that the humanitarian assistance by Israeli health professionals provides an opportunity to develop dialogue, achieve logistical cooperation, and establish trust between the peoples.At the same time, the article discusses the possible disadvantages of this approach in the Israeli-Palestinian test case as an example of humanitarian work that fosters normalization and preserves the status quo of occupation.
Topic:
Health, Occupation, Conflict, Peace, and Dialogue
Political Geography:
Middle East, Israel, and Palestine

577. Energy as a Tool for Israeli-Palestinian Peacebuilding

Author:
Bar Rapaport
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
This article focuses on energy as a tool for promoting peace between Israel and the Palestinians. It describes how the energy relations between Israel and the Palestinians reflect the existing relationship between the parties, and the potential they hold for promoting cooperation and peace. The energy sector and the energy relations between Israel and the Palestinians largely determine the level of energy services and electricity infrastructure in the West Bank. At present, this dependency does not benefit either party. The article points to a number of current initiatives aimed at strengthening Palestinian energy independence as well as energy security. At the same time, it highlights the inherent tensions in the management of the energy sector in the Israeli-Palestinian case, for example between energy independence and energy poverty in the West Bank and between responses to the climate crisis and the need for energy security. Finally, the article argues that the energy sector must be examined as an integral part of the political-diplomatic relationship between Israel and the Palestinians and that it must address the various tensions and promote energetic cooperation in the interest of peace.
Topic:
Climate Change, Infrastructure, Peacebuilding, and Energy
Political Geography:
Middle East, Israel, Palestine, and West Bank

578. Environmental Organizations as Potential Players in the Peace Process

Author:
Nir Arielli
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
Environmental issues cross geographic and man-made political boundaries. Shared environmental problems and situations of interdependence may exacerbate conflicts between communities, but they can also offer opportunities for cooperation. This article discusses the capacity of non-governmental organizations to use environmental issues as a platform for promoting peace in the region, especially between Israelis and Palestinians. It focuses on three organizations that see Israeli-Palestinian cooperation as a central pillar of their activities: EcoPeace Middle East, the Arava Institute for Environmental Studies, and Comet Middle East. The article examines the variety of activities these organizations engage in: promoting and encouraging cooperation between political entities, education, facilitating meetings between individuals and groups on both sides, addressing energy and water-related problems (mainly sewage treatment and river pollution), and more. The notable achievements of the three organizations are also highlighted, as well as the considerable difficulties they face. This review of their activities suggests some conclusions and recommendations for organizations and for individuals interested in environmental protection and the future of relations between Israelis and Palestinians. This paper is the second in a series of a joint project between the Mitvim Institute and the Davis Institute for International Relations.
Topic:
Environment, Water, Peace, Pollution, and Civil Society Organizations
Political Geography:
Middle East, Israel, and Palestine

579. One step forward, one step back: International discourse on advancing Israeli-Palestinian peacemaking

Author:
Lior Lehrs
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:
The Israeli-Palestinian peace process has been locked in a stalemate since the 2014 collapse of the US mediation initiative led by then-Secretary of State John Kerry. The relations between the parties have been all but severed and characterized by a series of crises and tensions that peaked over Israel’s 2020 West Bank annexation plan. While the Israeli-Arab normalization agreements removed the annexation idea from the agenda, this did not change the Israeli-Palestinian situation. Developments in recent months in the Israeli-Palestinian arena pose challenges and risks but also new opportunities and possibilities. Special attention should be paid to the impact of the May 2021 escalation, the deep crisis in the Palestinian Authority (PA), and the establishment of a new government in Israel. This paper maps the international discourse on advancing Israeli-Palestinian peace under the current conditions, and constitutes a follow-up to the paper we published in April 2021. It is based on a series of dialogues held by Mitvim Institute experts in August and September 2021 with European, American and Palestinian diplomats and experts, as well as UN officials, and also on a series of discussions among a team of Israeli experts formed by Mitvim.[1] The paper offers an analysis of the positions and perceptions of international actors regarding the effects of the latest developments on the Israeli-Palestinian arena, and their insights and conclusions about the feasible and desired measures that could be undertaken to advance Israeli-Palestinian peace.
Topic:
Territorial Disputes, Negotiation, Peace, Annexation, and Dialogue
Political Geography:
Middle East, Israel, and Palestine

580. Prosperity and Resilience: Diverse Production and Comparative Advantage in Modern Economies

Author:
David Henig and Anna Guildea
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
A common version of trade theory suggests that countries will specialise in a limited number of products. Using the example of David Ricardo from 1817, England specialises in cloth and Portugal in producing wine – and then they trade with each other to mutual benefit. However, this is a crude version of comparative advantage that routinely leads to political concerns about trade. Today the prime concern is that Europe and other developed countries have become too dependent on China by allowing the logic of comparative advantage to work. In short, trade has made us vulnerable. The observed reality is different. Most advanced economies produce and export a broad range of goods and services. Their governments have similar aspirations to develop and support diverse manufacturing and services, including in the most traded global sectors such as pharmaceuticals, automotive, business services, and food and drink. Modern specialisation comes in countries producing various, but not all, products within global supply chains. Patterns of trade suggest such specialisation has allowed countries to both grow and become resilient to individual shocks. Knowledge and ownership of the whole supply chain is more important than producing everything.
Topic:
Globalization, Economy, Services, Resilience, WTO, and Production
Political Geography:
Europe and Global Focus

581. Strategic Autonomy and Long-term Innovation Competitiveness: On the Importance of Intellectual Property Rights for the Production of High-Value Medicines in the EU

Author:
Matthias Bauer
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Europe’s political leaders have in recent months called for “European industrial autonomy”. Notions of dependency, sovereignty and resilience are now also referred to in policy proposals targeted at pharmaceutical companies, with “strategic autonomy” being the ultimate political ambition. The precise meaning of strategic autonomy in biopharmaceutical industries remains yet to be defined, although the current Pharmaceutical Strategy only refers to “open strategic autonomy” in the context of dependencies and supply chains. This is regrettable, as it does not take into account the importance of strategic research and innovation autonomy, allowing the EU to ensure a high degree of autonomy in innovative medicines and therapies. Current policy conceptions fail to account for businesses’ long-term international innovation competitiveness and Europe’s capability to attract investments in pharmaceutical research and cutting-edge production technologies. Present conceptions of strategic autonomy of Europe’s pharmaceutical industry disregard the fact that the EU is substantially lagging the USA and, increasingly, other parts of the word in pharmaceutical innovation. Clinical trials’ pipeline data shows that, in the future, EU Member States will very likely become increasingly dependent on innovative medicines that are temporarily protected by patents and market exclusivity rights held by non-EU rights holders in many therapeutic areas. This gives some urgency to Commission President von der Leyen ensuring that the European industry remains an “innovator” and “world leader” (Mission Letter by Commission President von der Leyen to Commissioner Kyriakides). The European Commission’s current understanding of sovereignty in pharmaceutical industries centres around one core theme: the reduction of dependencies from pharmaceutical suppliers outside the EU. At the same time, in an effort to achieve equitable access to affordable medicines and to foster research into unmet medical needs, it considers changes in the incentive structure for research in medicines for children and rare diseases, and new obligations for companies to achieve a more equitable access to medicines across Member States. While these objectives are generally merited, the Commission has established a narrow perspective about a concept that is aiming for ambitious long-term achievements for Europe’s pharmaceutical industry. The industry’s future innovation competitiveness and the capacity to develop and produce high value-added medicines, which should be at the core of any concept of long-term autonomy, have largely been ignored.
Topic:
Intellectual Property/Copyright, European Union, Innovation, Medicine, Strategic Autonomy, and Economic Competition
Political Geography:
Europe

582. After the DMA, the DSA and the New AI regulation: Mapping the Economic Consequences of and Responses to New Digital Regulations in Europe

Author:
Fredrik Erixon, Oscar Guinea, Erik van der Marel, and Elena Sisto
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The European Union (EU) has pursued an ambitious agenda for regulating the digital economy, and it is now planning to establish a new package of regulations, including the Digital Markets Act (DMA), the Digital Services Act (DSA), and a new regulation of Artificial Intelligence (AI). These regulations build on an already established structure of digital and business regulations in Europe that is comparatively restrictive but that varies substantially between EU member states. In this study, we take stock of the new incoming regulations and review their effect on EU member states’ economies. More precisely, the paper considers how different countries in Europe will be affected by the regulations and how they should balance these effects with policies that help the economy to prosper. The European Commission’s economic analyses and impact assessments of the new regulations are thin. In fact, they are grossly inadequate for the purpose at hand: to better understand how the economy will change because of these regulations. The Commission identifies some benefits – for instance, positive competition outcomes from reduced network effects and more trust in AI-based goods and services. There are good reasons to think that these benefits are real. However, these regulations will also lead to new costs and have broader consequences for firms and resource allocation in the economy. Remarkably, the only costs identified in the impact assessments are direct compliance and administrative costs. Obviously, for far-reaching regulations such as the DMA, the DSA and the AI regulation, the main costs will not be the direct compliance burden, but the dynamic and downstream economic effects spurred by their implementation. This is because these regulations will prompt firms and markets to change their current and future behaviour: these changes are likely to define the most important costs. Furthermore, it is important to get a better idea of the distribution of these costs. It is highly unlikely that all sectors and countries will be affected equally. Some sectors will be more affected than others just as some countries will experience economic consequences that are bigger than in other countries. The question is: what factors will lead to the expected variation in the costs and consequences of the three new regulations? In this paper, we argue that two factors are important for grasping the distributive patterns of costs from digital regulations. First, the industry structure of a country is key. In the economy, countries have different endowment structures, and the modern European economy is defined by factor endowments such as data and digital competences. These factor endowments are exploited in the economy by firms and organisations that use them to create different comparative advantages. In turn, these advantages influence how a firm and a country market, sell and trade. Second, the existing structure of a country’s business and digital regulations will influence how an economy will respond to new and additional digital regulations. In fact, the restrictiveness of regulations that we know to impact on the digital economy vary substantially in the European Union – both between countries and between sectors. This variation will have consequences for the distribution of the costs of the three new regulations that are going to be implemented. This paper maps countries and country groups in the digital economy: their endowments, advantages, and flows. Especially, it evaluates the digital performance of countries in a number of key indicators and data points, and anchors the analysis in the academic literature. The paper points to some specific consequences of the DMA, the DSA and the AI regulation, and how different regulations will affect endowments structures and advantages. One key finding is that the distributive effects of the regulations will depend on size advantages and disadvantages. In short, small economies and small firms will likely carry a disproportionate part of the cost of new digital regulations. Furthermore, countries that have used their endowments to specialise in the digital economy will be more affected than others. On this score, there is a vast difference between EU countries. For instance, countries in Europe’s North – generally small, competitive, and open economies – will be most affected by these new regulatory burdens. Countries in Central and Eastern Europe will also be negatively affected, especially through risks of market exclusion effects for small firms. It is important for European policymakers to now consider how they can avoid that these new digital regulations continuously reinforce size advantages for big economies and big firms. There are some policy strategies that should be considered. First, regulations can be changed to better fit the overwhelming evidence that young, dynamic, and innovative firms drive a substantial part of productivity growth in the economy. Second, EU and national policymakers can pursue policies that make the transition into a more size-balanced economy easier, for instance by taxing and regulating small firms differently. Smaller economies can also be helped by having corporate taxes that are lower than in big economies. Third, EU and national policymakers can reform other digital and business regulations and make them less burdensome. Fourth, the EU can help to support the build-up of digital advantages in smaller economies.
Topic:
Markets, European Union, Regulation, and Digital Economy
Political Geography:
Europe

583. The New Wave of Defensive Trade Policy Measures in the European Union: Design, Structure, and Trade Effects

Author:
Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Vanika Sharma, and Renata Zilli
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This study undertakes a comprehensive review of proposed and adopted defensive trade policy instruments in the EU, with the purpose of better understanding their design, functioning, and implications. The study covers eight policy instruments at different stages of development. These are: Anti-Coercion Instrument (ACI), International Procurement Instrument (IPI), Carbon Border Adjustment Mechanism (CBAM), Foreign Subsidy Instrument (FSI), Corporate Sustainability Due Diligence (DD), Level Playing Field Provisions in the EU-UK Trade and Cooperation Agreement (LPF), Enforcement Regulation (ER), and the Deforestation Initiative (DI). It is understandable that the EU seeks both redressive and retaliatory measures in its trade policy. However, these measures would have the total effect of Europe producing more for itself and being less dependent on imports. This is a significant policy shift, because in their totality the defensive trade policies make the EU more inward-looking. This can lead to major negative consequences. An extensive distortion of trade and markets would reduce the gains from trade and prompt a reallocation of European resources. Notably, the EU is a larger supplier of goods and services than it is a buyer, and an inward-looking policy that leads to retaliation from EU’s trading partners can harm its exports and trade surplus. There are also potential strategic consequences that could follow, and their importance has increased considerable as a result of the Russian war against Ukraine. Under these measures, the EU could introduce new trade frictions with friends and allies, and with countries that the EU seeks closer cooperation with to provide for a safer geopolitical environment. For each of these defensive measures, the study takes an extensive look at the objectives of the instruments, their legality, proportionality, and subsidiarity, the working of the instruments and the division of labour between institutions, as well as their enforceability in conjunction with existing multilateral and bilateral rules affecting the EU. It also attempts to capture the impact and potential for retaliation for the EU and its partners as a result of the implementation of the instruments. The study highlights the areas where the instruments lack clarity, particularly in the implementation of the instrument, the division of labour between the EU and EU member states, and the compliance of the instruments with WTO rules and bilateral FTA provisions. The instruments share some general characteristics. Many of the instruments have been created as retaliatory measures against coercion and unfair trade practices by partner countries. Very often, the partner countries most affected by the instruments are also the same. The United States, China, Russia, the UK, and Turkey are likely to be on the receiving end of the instruments due to the significant volumes of trade and economic interdependence with the EU, but also because they either do not follow the same trade rules as the EU, or the EU wants to maintain with them the current level of competitiveness. Most instruments also use restrictions to the EU market as the main policy lever. The objective is not just about creating an equal playing field but also ensuring that the rest of the world follows EU rules. Particularly, the EU aims at regulating non-EU companies directly and unilaterally through EU policies, which increases the risk of retaliation against the EU. At the same time, there are also important areas of departure in the specifics of each instrument, as illustrated by the varying objectives, measures, compatibility with international obligation, affected sectors, and whether the measures apply automatically or at the discretion of the EU.
Topic:
Defense Policy, Political Economy, European Union, and Trade
Political Geography:
Europe

584. The Role of Non-Pecuniary Considerations: Location Decisions of College Graduates from Low Income Backgrounds

Author:
Yifan Gong, Todd Stinebrickner, Yuxi Yao, and Ralph Stinebrickner
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
We examine the initial post-college geographic location decisions of students from hometowns in the Appalachian region that often lack substantial high-skilled job opportunities, focusing on the role of non-pecuniary considerations. Novel survey questions allow us to measure the full non-pecuniary benefits of each relevant geographic location, in dollar equivalents. A new specification test is designed and implemented to provide evidence about the quality of these non-pecuniary measures. Supplementing perceived location choice probabilities and expectations about pecuniary factors with our new non-pecuniary measures allows a new approach for obtaining a comprehensive understanding of the importance of pecuniary and non-pecuniary factors for location decisions. We compare this approach to alternative expectations-based approaches. We also combine the non-pecuniary measures with realized location and earnings outcomes to characterize inequality in overall welfare.
Topic:
Income Inequality, Welfare, Higher Education, Data, and Location Choice
Political Geography:
North America, United States of America, and Appalachia

585. A Task-Based Theory of Occupations with Multidimensional Heterogeneity

Author:
Sergio Ocampo
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Centre for Human Capital and Productivity (CHCP), Western University
Abstract:
I develop an assignment model of occupations with multidimensional heterogeneity in production tasks and worker skills. Tasks are distributed continuously in the skill space, whereas workers have a discrete distribution with a finite number of types. Occupations arise endogenously as bundles of tasks optimally assigned to a type of worker. The model allows us to study how occupations respond to changes in the economic environment, making it useful for analyzing the implications of automation, skill-biased technical change, offshoring, and worker training. Using the model, I characterize how wages, the marginal product of workers, the substitutability between worker types, and the labor share depend on the assignment of tasks to workers. I introduce automation as the choice of the optimal size and location of a mass of identical robots in the task space. Automation displaces workers by replacing them in the performance of tasks, generating a cascading effect on other workers as the boundaries of occupations are redrawn.
Topic:
Occupation, Automation, Skills, and Tasks
Political Geography:
Global Focus

586. Policy Paper: Considerations of condemnation and balance of Palestine’s position on the war in Ukraine

Author:
Palthink
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
In classic wars, we waited for the military result, and then we formed a political response. In new wars, there is not a final resolution; there is only the stronger party imposing its conditions. Additionally, there is also geographical control, regime projection, or behavior modification goals. Russia is seeking to maintain its national security and enhance its regional and international position. It has a deep fear that NATO will expand, bringing weapons to its border with Ukraine. Now that the first shock of the war has receded, the world realizes that the war will not exceed Ukraine’s borders. Russia has given indications that it will limit itself to the minimum that preserves its national security by preventing Ukraine from joining NATO. Global concern about the consequences of war is high. People are wondering if it will continue or stop. Additionally, sanctions have been announced. In this context, developing and poor countries are affected by conflict because they depend on foreign aid. Their positions on the war will determine where they are positioned, and how the political, economic and security consequences will affect them. Trying to show a neutral position would not endear them to the great powers. On the face of it, it may seem to be a war fought on Ukrainian lands only, but it is a world war of influence. The survival of developing nations depends on the strength of the international community and the extent to which it supports these nations in the light of political realism, not because of their strength and resources. Many places cannot survive without traditional international support.
Topic:
International Relations, Defense Policy, Military Strategy, and Conflict
Political Geography:
Europe, Ukraine, Middle East, and Palestine

587. Position Paper: Municipal elections in the Westbank: a first step towards inclusive democracy.

Author:
Palthink
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
PalThink for Strategic Studies followed the second phase of the electoral process in its second phase with great interest. It was conducted in eleven governorates in the West Bank, including occupied Jerusalem, and was held in fifty local municipalities. Two-hundred thirty-four lists competed in the elections. According to the Chairman of the Central Election Commission, Hanna Nasser, who spoke at the morning press conference in Al-Bireh city on March 26, 2022, independent parties comprised 64.4% of the candidates, while there were 35.6% party lists. The overall turnout was 53% of those eligible to vote despite the challenges of holding regular and permanent elections in all Palestinian areas, sectors, and institutions.
Topic:
Elections, Democracy, Local, Voting, and Participation
Political Geography:
Middle East and Palestine

588. New Policy Papaer : The Consequences of No General Elections in Palestine

Author:
Palthink
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Pal-Think For Strategic Studies
Abstract:
This paper tracks the disastrous repercussions of the political and legal absence of Palestinian elections, the distortion of the work of the three authorities as a result of the suspension of some provisions of the Basic Law and the dissolution of the Legislative Council. In addition, the absence of elections in the Palestinian economy is due to the duplication of public politics in both the West Bank and the Gaza Strip, and their direct effects on the general budget considering the lack of planning and oversight, which has affected the level of transparency and accountability. All this has directly affected Palestinian society in all its aspects and has increased tensions such as demonstrations and strikes, which have increased the situation of impunity and crimes without accountability among segments of society. At the international level, the absence of elections and the negative renewal of legitimacy have affected the political project and the international community’s advocacy of the Palestinian cause, considering the rapid global changes and transformations. In the end, the policy paper outlined four main trends in promoting the chances of elections in Palestine.
Topic:
Elections, Democracy, Voting, and Participation
Political Geography:
Middle East and Palestine

589. Powered by Twitter? The Taliban's Takeover of Afghanistan

Author:
Laura Courchesne, Bahar Rasikh, Brian McQuinn, and Cody Buntain
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Empirical Studies of Conflict Project (ESOC)
Abstract:
On August 15, 2021, a spokesperson of the Islamic Emirate of Afghanistan, the Taliban’s self- proclaimed state, declared on Twitter: “With the help of God, and the support of the nation, we are now in control of all parts of the country. We would like to congratulate our nation on this big achievement.” After 20 years of conflict with U.S. and NATO coalition forces, no one predicted the speed with which the Taliban would consolidate power and precipitate the collapse of the Afghan government and military. Presenting research conducted by the newly established Centre for Artificial Intelligence, Data, and Conflict (CAIDAC), this report explores social media’s central role in the Taliban’s takeover of Afghanistan and the strategies used by the group to manipulate international and domestic audiences. It examines the Taliban’s social media strategy on Twitter throughout their takeover of Afghanistan, which culminated in the storming of Kabul on August 15, 2021. Specifically, we studied the activity of 63 accounts claimed by the Taliban leadership, spokespersons, and avowed members from April 1 to September 16, 2021. These accounts had more than 2 million followers on Twitter in September 2021. As of May 8, 2022, Taliban content reaches more than 3.3 million accounts. We also examined the broader Taliban ecosystem, which included more than 126,000 Twitter accounts that either retweeted Taliban content or posted content subsequently shared by the Taliban’s core network. We found clear patterns in the group’s communication strategies, visual imagery deployed, and the timing and content of social media activity and events on the ground.
Topic:
NATO, Terrorism, Taliban, Social Media, and Political Extremism
Political Geography:
Afghanistan

590. UN Peacekeeping and the Protection of Civilians from Sexual and GenderBased Violence

Author:
Jenna Russo
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
International Peace Institute
Abstract:
While all UN multidimensional peacekeeping operations are mandated to prevent and respond to conflict-related sexual violence (CRSV), the missions in the Democratic Republic of the Congo (DRC) and South Sudan, as well as in the Central African Republic, are also mandated to protect civilians from sexual and gender-based violence (SGBV). While SGBV is often used and understood interchangeably with CRSV, SGBV is broader in scope, as it encompasses nonsexual forms of gender-based violence and need not be connected to armed conflict. This report examines how missions are implementing their mandates to protect civilians from SGBV, including CRSV, and assesses good practices, gaps, and opportunities for improvement. The report draws on lessons learned from the UN missions in South Sudan (UNMISS) and the DRC (MONUSCO). It considers how the complexities of preventing and responding to SGBV necessitate a whole-of-mission approach to the protection of civilians (POC) that encompasses not only physical protection from violence but also activities that address cultural norms related to gender, strengthen the rule of law, and enhance women’s participation. This report thus considers a range of protection activities carried out by missions, as well as structures and processes that promote the effective integration of gender into mission planning and activities. The paper concludes with several recommendations for UN peacekeeping missions, the UN Department of Peace Operations (DPO), and member states on the Security Council to strengthen work on SGBV: Provide clear guidance on what it means to protect civilians from SGBV as part of a peacekeeping mandate; Systematically and meaningfully integrate gender advisers and women’s protection advisers into POC planning at the strategic and operational levels; Include gender-sensitive indicators in monitoring and reporting systems and prioritize the gathering of sex-disaggregated data; Take a holistic approach to protecting civilians from violence, recognizing the risks of armed responses and prioritizing partnerships; and Continue to combat impunity and engage with governments and armed groups to promote accountability.
Topic:
Security, Peacekeeping, Women, Gender Based Violence, Sexual Violence, Peace, Civilians, and Protection
Political Geography:
Global Focus

591. The effect of COVID certificates on vaccine uptake, public health, and the economy

Author:
Philippe Aghion, Guntram Wolff, Philippe Martin, Lionel Guetta-Jeanrenaud, Bary Pradelski, Miquel Oliu-Barton, Nicolas Woloszko, Patrick Artus, and Arnaud Fontanet
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
In the COVID-19 pandemic, governments have, among other measures, mandated the use of COVID certificates to prove vaccination, recovery or a recent negative test, and have required individuals to show certificates to access shops, restaurants, and education or workplaces. While arguments for and against COVID certificates have focused on reducing transmission and ethical concerns, the incentive effects of COVID certificates on vaccine uptake, health outcomes and the economy has not yet been investigated. To estimate these effects, we construct counterfactuals based on innovation diffusion theory for France, Germany and Italy. We estimate that the announcement of COVID certificates during summer 2021 led to increased vaccine uptake in France of 13.0 (95% CI 9.7–14.9) percentage points (p.p.) of the total population up to the end of the year, in Germany 6.2 (2.6–6.9) p.p., and in Italy 9.7 (5.4–12.3) p.p. Further, this averted an additional 3,979 (3,453–4,298) deaths in France, 1,133 (-312–1,358) in Germany, and 1,331 (502–1,794) in Italy; and prevented gross domestic product (GDP) losses of €6.0 (5.9–6.1) billion in France, €1.4 (1.3–1.5) billion in Germany, and €2.1 (2.0–2.2) billion in Italy. Notably, the application of COVID certificates substantially reduced the pressure on intensive care units (ICUs) and, in France, prevented occupancy levels being exceeded where prior lockdowns were instated. Varying government communication efforts and restrictions associated with COVID certificates may explain country differences, such as the smaller effect in Germany. Overall, our findings are more sizeable than predicted. This analysis may help inform decisions about when and how to employ COVID certificates to increase vaccine uptake and thus avoid stringent interventions, such as closures, curfews, and lockdowns, with major social and economic consequences.
Topic:
Government, Economy, Public Health, Vaccine, and COVID-19
Political Geography:
Europe

592. The private sector advances in China: The evolving ownership structures of the largest companies in the Xi Jinping era

Author:
Nicolas Véron and Tianlei Huang
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper documents recent structural changes in China’s corporate landscape, based on company level data, providing a complementary perspective to that of official Chinese statistics. We classify China’s largest companies by revenue since 2004 (based on Fortune Global 500 rankings), and largest listed companies by market capitalisation since 2010, into state and private-sector categories, using a conservative definition of the private sector. Among the largest companies by revenue, the private sector was non-existent in the mid-2000s but has grown steadily in the past decade, even though the state sector still dominates. The aggregate revenue of private-sector companies grew from zero in Fortune’s ranking in 2005 (based on 2004 revenue) to $104 billion in the 2011 ranking, or merely 3.8 percent of the $2.78 trillion in aggregate revenue for all Chinese companies in the ranking, and to $1.7 trillion in the latest 2021 ranking (based on 2020 revenue), or 19 percent of the Chinese companies’ aggregate revenue. As for market value of the largest listed firms, the private sector’s share in the top 100 listed Chinese companies was only 8 percent at end-2010 but crossed the 50 percent threshold in 2020 and retreated slightly in 2021 to 48 percent, following that year’s regulatory crackdown on several private-sector-dominated industries. These findings do not support a narrative of broad based rollback in recent years of previous private-sector expansion.
Topic:
Business, Private Sector, and Corporations
Political Geography:
China and Asia

593. Measuring the intangible economy to address policy challenges

Author:
Marie Le Mouel
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
European economies exhibit the so-called ‘productivity puzzle, whereby investments’ in digital technologies and intangible assets have not delivered the hoped-for productivity gains. Explanations for this puzzle lie in the unequal ability of companies to make use of these technologies, and resulting patterns of market concentration, productivity divergence and dampened business dynamism. Access to firm-level data is essential to properly understand these rich dynamics. The purpose of the first work package of the MICROPROD project was to improve the firm-level data infrastructure, expand the measurement of intangible assets and enable cross-country analyses of these productivity trends. The MICROPROD researchers developed the Micro Data Infrastructure (MDI), a centralised platform that harmonises access to the firm-level data gathered by national statistical institutes. The data infrastructure developed through this work package offers valuable insights into the evolution of productivity across the European Union and into the effects of digitalisation and globalisation. It can thus generate important evidence for designing policies to support the European Commission’s policy objectives, especially for achieving the digital and green transitions. In addition, the research enabled by this data infrastructure and carried out within the context of MICROPROD can provide valuable lessons about the response of European economies to the COVID-19 pandemic and its aftermath.
Topic:
Infrastructure, European Union, Digital Economy, Economy, and COVID-19
Political Geography:
Europe and Global Focus

594. Knowledge flows and global value chains

Author:
Niclas Poitiers and Marta Bisztray
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
The organisation of global value chains via supplier links and within business groups shapes global trade and forms a major channel through which knowledge is disseminated between countries. Global value chains are also an important channel through which economic shocks propagate. At the same time, knowledge seeking and knowledge protection are important determinants for multinational companies when structuring their production processes. Contract enforcement in general, and intellectual property rights protection in particular, are key institutions in this regard. Hierarchical ownership structures within business groups tend to be organised in the shape of an inverted pyramid, with more complex tasks located closer to the headquarters in ownership terms, facilitating stronger control. Recently, ownership structures have become ‘flatter’, meaning business groups have pulled key operations closer to their headquarters. New supply-chain relationships with key business partners are often accompanied by process and product innovation, making long-term business relationships an important driver of productivity growth. Knowledge transmission through such links not only benefits participating companies, but also leads to spillover effects. Import competition from high-income countries leads to investment in R&D and productivity growth in countries that have comparative advantage in capital-intensive goods. This is not the case for import competition from low-income countries, which instead makes companies downsize. Import competition also makes firms focus on their core product. To improve our understanding of this key aspect of globalisation, comparable microlevel data is needed on firms and firm connections across multiple countries. Trade and industrial policy can support productivity growth through global value chains by providing the right legal environment that supports the formation of longterm business relationships.
Topic:
Industrial Policy, Business, Trade Policy, and Global Value Chains
Political Geography:
Global Focus

595. The low productivity of European firms: how can policies enhance the allocation of resources?

Author:
Gregory Claeys, Giovanni Sgaravatti, and Marie Le Mouel
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper summarises the most important policy lessons from the research undertaken in the MICROPROD project, work package 4, related to the allocation of the factors of production, with a special focus on the weak dynamism of European small and medium-sized enterprises (SMEs). In particular, MICROPROD work package 4 investigated the impact of labour market institutions and skill shortages on firm dynamism, and which types of (foreign) competition are conducive for total factor productivity (TFP) maximizing factor allocation. The papers of this work package also explored the side effects of unconventional monetary policy and of forbearance in bank restructuring for the survival of ‘zombie’ firms, and for employment growth and the TFP of new SMEs.
Topic:
Monetary Policy, Business, Productivity, and Resource Allocation
Political Geography:
Europe

596. Cutting Putin’s energy rent: ‘smart sanctioning’ Russian oil and gas

Author:
Georg Zachmann, Guntram Wolff, Agata Łoskot-Strachota, Simone Tagliapietra, Axel Ockenfels, Ricardo Hausmann, and Ulrich Schetter
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
In the wake of the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia’s access to hard international currency. However, Russia remains the world’s first exporter of oil and gas, and at current energy prices this provides large hard currency revenues. As the war continues, European governments are under increased pressure to scale-up their energy sanctions, following measures taken by the United States, the United Kingdom, Canada and Australia. Given the inelasticity of Russia’s oil and gas supply, the most efficient way for Europe to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.
Topic:
Oil, Sanctions, Gas, Vladimir Putin, and Energy
Political Geography:
Russia, Eurasia, and Ukraine

597. Is the workforce ready for the jobs of the future? Data-informed skills and training foresight

Author:
Fabian Stephany and Rosemary Luckin
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
For many newly emerging jobs, labour-market mismatches prevail as workers and firms are unable to apply precise occupation taxonomies and training lags behind workforce needs. We report on how data can enable useful foresight about skill requirements and training needs, even when that data has not been collected for this express purpose. First, we show how online generated freelance data can help monitor labour-market developments in the short run. Second, in the long run, we illustrate how data can shed light on development of workplace-ready aptitudes among students, even when these are not the direct focus of instruction. This combination of data-intensive activities can inform the immediate and long-term needs for education and training in order to help individuals develop the ability to learn, train and retrain as often and as much as needed.
Topic:
Business, Training, Data, Labor Market, Workforce, and Skills
Political Geography:
Europe and Global Focus

598. Raising EU productivity through innovation

Author:
Reinhilde Veugelers and Frederic Warzynski
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Research and development is seen as a key contributor to growth because it generates knowledge, leading to new or improved products through product innovation, and makes firms more efficient at producing goods through process innovation. Firm level studies generally find evidence of strong positive productivity effects for firms that invest in R&D. In this context, digital systems could be an important driver of productivity growth, particularly in combination with investments in R&D. But there has been little hard evidence of a significant productivity boost from digital technologies. How the relationship between productivity growth, innovation and digital technology adoption plays out is particularly important for the European Union, where productivity growth has long been weak. Researchers from the MICROPROD project have assessed the effect of technology investment on productivity and performance. Combining recent unique firm-level data and state-of-the art research methodologies, MICROPROD research provides a better overview of which firms are most likely to adopt digital technologies and to innovate, and to turn these investments into productivity growth.
Topic:
European Union, Investment, Innovation, and Productivity
Political Geography:
Europe

599. Measuring macroeconomic uncertainty during the euro’s lifetime

Author:
Monika Grzegorczyk and Francesco Papadia
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
It is a cliché in official economic institutions’ publications and their leaders’ speeches to lament exceptional uncertainty. The complaint does, however, ring true currently. A solid empirical basis should be given to this view by properly measuring macroeconomic uncertainty. To measure macroeconomic uncertainty, we start from observable forecasts of macroeconomic variables, which are transformations of underlying economic conditions. By observing how forecasts change over time, we measure the flow of macroeconomic surprises. The more intense the flow of surprises, the greater uncertainty can be said to be. Greater differences among forecasts are also evidence of uncertainty. We draw out four indicators of macroeconomic uncertainty, measured over the lifetime of the euro: How the macroeconomic forecasts of a given institution for the same time period change over time; How the macroeconomic forecasts of a given institution deviate from realised outcomes; How the macroeconomic forecasts of different institutions deviate from one other; How dispersed the forecasts of different professionals are. We also measure whether the ‘stag-‘ or the ‘-flationary’ component is stronger in the overall stagflationary shock caused by the Russian invasion of Ukraine.
Topic:
Economy, Institutions, Macroeconomics, Uncertainty, and Euro
Political Geography:
Europe and Global Focus

600. The role of competition in the transition to climate neutrality

Author:
Georg Zachmann
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
The transition to climate neutrality requires the reallocation of production factors from polluting activities to non-polluting activities. The main push for this reallocation will come from governmental decarbonisation targets that are translated into stringent climate policy tools, such as carbon pricing and emissions standards. But the complex process of recombining production factors will require the coordination of millions of individuals and firms. The efficiency of this recombination process will be a main driver of the cost of the transition. Based on a consistent analytical framework, I argue that much more political attention should be paid to the markets and regulators that guide the re-allocation of production factors, to bring them in line with a carbon-neutral economy at the best service of European consumers. Three main issues should be considered: 1. The transition will change the role and efficiency of markets in allocating resources; 2. Competitive markets can make the transition more efficient; 3. In some areas, a too-narrow focus on competition can be detrimental, and needs to be discussed. To improve the institutions for resource allocation in the transition, policymakers should revisit three levels of intervention: 1) competition rules and enforcement should be adjusted to meet the new challenges of the transition; 2) efficient markets that are central to a climate-neutral economy – such as for electricity, emission rights or circular logistics – need to be properly designed; 3) the advantages and disadvantages of more direct state control in specific sectors should be revisited in light of the challenges of the transition. In summary, policymakers need to get away from simplistic state-or-market narratives. The focus should be on developing politically feasible frameworks for leveraging the benefits of competition for efficient resource allocation in the transition. Institutions should not focus solely on static efficiency, but must forcefully encourage investments in new systems and innovation. The role of institutions that determine resource allocation in the transition is an underappreciated but crucial area for future research and policy action.
Topic:
Climate Change, Institutions, Pollution, Carbon Emissions, Neutrality, and Decarbonization
Political Geography:
Global Focus