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1. Economic Diversification in Africa: How and Why It Matters

Author:
Zainab Usman and David Landry
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Many African countries have placed economic diversification high on the policy agenda, yet they first need to define what it means in their specific structural and socioeconomic contexts. For decades, economic diversification has been a policy priority for low- and middle-income economies. In the words of former managing director of the International Monetary Fund (IMF), Christine Lagarde, “We know that economic diversification is good for growth. Diversification is also tremendously important for resilience.” Unfortunately, this goal continues to elude many African countries. In fact, the continent is home to eight of the world’s fifteen least economically diversified countries. This reality weakens the foundation of their economic transfomation and slows their pace of progress. It also makes these countries particularly vulnerable to sudden external shocks, as the pandemic-induced disruption of tourism and oil-dependent economies has illustrated. Given the importance of diversifying African economies, it is critical to recognize how various dimensions of diversification can have different implications for the menu of policy options. Closely associated with the process of structural transformation from lower to higher productivity sectors, economic diversification has three evident dimensions. The first relates to the expansion of economic sectors that contribute to employment and production or gross domestic product (GDP) diversification, and the second is associated with international trade or exports diversification. This paper, however, focuses on a third dimension that the economics literature pays scant attention to: fiscal diversification. This fiscal element involves expanding government revenue sources and public expenditure targets and can therefore play a central role in helping to catalyze broader economic transformation through the expansion of activity in specific industries and sectors. It is also critical that policymakers effectively measure the extent to which this objective is being achieved. Both the expansion of existing economic sectors and the creation of new ones may diversify an economy. But these processes are vastly different in practice and will garner distinct outcomes. Of the main tools used by economists to measure diversification, the Theil Index differentiates between the respective contributions of new economic sectors and existing ones to overall diversification. Another tool widely used by development practitioners—the Public Expenditure and Financial Accountability (PEFA) framework—has significant potential for evaluating fiscal diversification but would need to capture more information on government revenue collection and spending and link them to policy objectives.
Topic:
Economics, Governance, Diversification, and Trade
Political Geography:
Africa

2. Measuring Trade Facilitation: Evidence from India

Author:
Vijay Singh Chauhan and Sruti Vijayakumar
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The World Trade Organization’s Trade Facilitation Agreement has placed trade facilitation initiatives high on the agenda of international governments. This case study of India studies what trade facilitation may mean for a fast-paced economy. In this paper the authors use the trigger presented by the World Trade Organization’s (WTO’s) Trade Facilitation Agreement (TFA) to undertake a comprehensive review of various publicly available studies for India relating to performance measurement of the ecosystem that handles the cross-border movement of goods, focusing on the period since 2015. The paper summarizes the results of six key composite performance indicators—namely, (1) the Organisation for Economic Co-operation and Development’s (OECD’s) trade facilitation indicators (TFIs); (2) the World Bank’s Ease of Doing Business (EODB) Index; (3) the World Bank’s Logistics Performance Index (LPI); (4) the World Economic Forum’s (WEF’s) Global Competitiveness Index (GCI); (5) the World Bank’s World Governance Indicators (WGIs); and (6) the United Nations’ Global Survey on Trade Facilitation and Paperless Trade Implementation (GSTF-PTI). This paper, by examining these composite survey-based indicators and the intertemporal trends they exhibit for India, reveals that they have not been moving in agreement with each other and that some of the trends are evidently counterintuitive. A comparison between delineated subindicators of select composite indicators sometimes indicates surprising trends. Import cargo release times (a performance measurement prescribed by the TFA) for the largest containerized port in the country, the Jawaharlal Nehru Port Trust (JNPT), have been extracted from various studies that have relied on the data from the customs automation system; the container tracking system, which employs radio-frequency identification (RFID); and survey-based studies, including the Trading Across Borders (TAB) component of the World Bank’s EODB Index. These import cargo release time studies present a consistent trend of improvement since 2017. The paper, therefore, highlights the greater robustness of cargo release time trends, based particularly on technology-enabled data-driven studies as a more meaningful metric for measurement of performance of border management agencies and practices vis-à-vis survey or perception-based indicators representing “enablers” of trade facilitation.
Topic:
Economics, Trade, and WTO
Political Geography:
South Asia and India

3. How Central Asians Pushed Chinese Firms to Localize

Author:
Dirk Van Der Kley and Niva Yau
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
There has been a sea change in China’s economic involvement in Central Asia. Large-scale transport and electricity projects funded by Chinese government loans have dried up. Hydrocarbon exports to China continue, but they are not the focus of most new projects. Instead, there are a growing number of industrial projects that seek to make value-added products that can be exported. These projects are increasingly staffed by Central Asians who receive technical training from Chinese firms. This change has been primarily driven by Central Asian states. The region’s governments have long pushed for industrial capacity building, including the upskilling of local workers. In addition, debt concerns in Kyrgyzstan in particular have made Chinese loans less attractive and less prevalent. This trend has coincided with Chinese policy banks’ embrace of more conservative lending policies globally for infrastructure projects. Chinese firms have begun adapting to these demands. They have steadily increased their proportions of local hires by training Central Asian workers both onsite and in China to address skills shortages. They have tried to engage local communities to earn a social license for their overseas operations. The Chinese government is now following suit. It is developing more formal cooperation agreements on industrialization and upskilling in addition to pre-existing, ad-hoc arrangements by individual companies. So far, the outcomes have been mixed. Many Chinese firms in Central Asia are employing more locals. Yet the more closely integrated these Chinese firms become with the region’s economies, the more they must deal with, or be co-opted by, localized corruption and political fights. Newly available polling data shows that public sentiments toward China are becoming more negative. Chinese companies are flexibly adapting to this environment of heightened expectations in a variety of ways. The views that outside observers in Washington and elsewhere harbor of China’s infrastructure investments through the Belt and Road Initiative (BRI) in Central Asia are outdated and do not reflect how much Chinese firms and eventually the Chinese government have adapted to meet local needs. Any Western-proposed alternative to the BRI needs to take these considerations into account.
Topic:
Economics, Business, Industry, and Job Creation
Political Geography:
China, Central Asia, and Asia

4. Decline, Not Collapse: The Bleak Prospects for Russia’s Economy

Author:
Andre Movchan
Publication Date:
02-2017
Content Type:
Research Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia faces bleak economic prospects for the next few years. It may be a case of managed decline in which the government appeases social and political demands by tapping the big reserves it accumulated during the boom years with oil and gas exports. But there is also a smaller possibility of a more serious economic breakdown or collapse. A proper analysis requires consideration of a number of key and often overlooked features of Russia’s post-Soviet economy.
Topic:
Economics, International Political Economy, and Economic structure
Political Geography:
Russia

5. Keeping EU-Asia Reengagement on Track

Author:
Richard Youngs
Publication Date:
01-2015
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The relationship between the European Union (EU) and Asia is in flux. The EU intensified its economic ties to Asia and boosted its security cooperation in the region in 2011 and 2012. But new challenges, including the crises in Ukraine and the Middle East, have made it difficult to sustain this incipient momentum. There are a number of steps that EU and Asian governments can and should take to continue to strengthen their relations.
Topic:
Security, Diplomacy, and Economics
Political Geography:
Europe, Ukraine, Middle East, and Asia

6. The Politics of 2 Percent: NATO and the Security Vacuum in Europe

Author:
Jan Techau
Publication Date:
09-2015
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The members of the North Atlantic Treaty Organization (NATO) pledged in 2014 to increase their defense spending to 2 percent of their gross domestic products by 2024. It is unrealistic to assume that this goal will ever be reached by all 28 allies, and yet the 2 percent metric persists—and it has assumed a significance beyond its face value. It is about addressing Europe’s growing security vacuum and defining who will be in charge of European security.
Topic:
Security, NATO, Economics, and Military Affairs
Political Geography:
Europe

7. Reforming India's Financial System

Author:
Ila Patnaik and Ajay Shah
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
India's financial system has long been inadequate. With an economy worth $2 trillion, the country's financial flaws are increasingly serious and outright dangerous. But fundamental change is under way. The government-backed Financial Sector Legislative Reforms Commission drafted the Indian Financial Code (IFC), a single unified law that replaces most existing financial law in India and is an important milestone in the development of state capacity. Now the government must work to adopt and implement the full code.
Topic:
Economics, Monetary Policy, Financial Crisis, and Reform
Political Geography:
South Asia and India

8. Time to Reset the European Neighborhood Policy

Author:
Stefan Lehne
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Through its European Neighborhood Policy (ENP), the European Union (EU) aims to support the structural transformation of its Eastern and Southern neighbors, promoting democracy, the rule of law, and successful market economies. Ten years after the ENP's launch, it is clear that the policy is not working. Adjusting the ENP to the changing reality on the ground, sharpening its tools, and rebuilding its credibility should be a top priority for the EU's foreign policy leadership.
Topic:
Foreign Policy, Democratization, Economics, International Trade and Finance, and Markets
Political Geography:
Europe

9. A Window of Opportunity to Upgrade EU Foreign Policy

Author:
Stefan Lehne
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
As the financial crisis recedes and the European Union (EU) regains a measure of internal stability, pressure in Europe\'s neighborhood is on the rise. The Ukraine crisis and turmoil in the Middle East and North Africa have elevated foreign policy to the top of the EU\'s agenda. Whether the EU can make its external action more effective will depend in large part on institutional decisions made in 2014—the selection of a new leadership team and the reorganization of the European Commission.
Topic:
Security, Foreign Policy, Economics, Human Rights, and Regional Cooperation
Political Geography:
Europe, Ukraine, Middle East, and North Africa

10. China's Debt Dilemma: Deleveraging While Generating Growth

Author:
Yukon Huang and Canyon Bosler
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Much of the media coverage of China's economy suggests that the country is headed for a financial crisis. China's mountain of debt is decried, local government finances are labeled menacing, and a property bubble is called disastrous. But this picture is misleading. While China has serious debt problems, with prudent macroeconomic policies and productivity-enhancing structural reforms, the challenges should be manageable if underlying fiscal issues and growth-related reforms are addressed.
Topic:
Debt, Economics, and Reform
Political Geography:
China and East Asia

11. The Future of Big Business in the New Egypt

Author:
Amr Adly
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Egypt's big business community provided strong, early support for the military- backed government that came to power in June 2014. But despite that endorsement, the regime of President Abdel Fattah el-Sisi has made changes that are putting pressure on the private sector. Still, there are signs that some of those shifts are only temporary and that they have been taken out of necessity as the new political leadership attempts to repair a struggling economy. While elements of state-business relations may be reconfigured, big business remains essential to Egypt's long-term recovery.
Topic:
Economics and Political Economy
Political Geography:
Egypt

12. Locked In or Left Out? Transatlantic Trade Beyond Brussels and Washington

Author:
Sinan Ülgen
Publication Date:
06-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Many countries are interested in the Transatlantic Trade and Investment Partnership (TTIP) that Brussels and Washington are negotiating. But the United States and the European Union (EU) began talks without devising a way to involve their main trade partners. This approach, understandable given the complexity of the negotiations, could produce a bilateral agreement that is difficult to multilateralize. To influence the negotiations, third countries interested in eventually joining TTIP should pursue an agenda centered on the accession mechanism, the elimination of nontariff barriers, and dispute settlement.
Topic:
Economics, Human Rights, and International Trade and Finance
Political Geography:
United States and Europe

13. The Rahmon Phenomenon: New Challenges for Tajikistan's Long-Standing President

Author:
Alexey Malashenko and Aziz Niyazi
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Emomali Rahmon's reelection as president of Tajikistan in 2013 testifies to his regime's stability and its capacity for self-preservation. He now faces a number of complex tasks, which include undertaking economic reforms, counteracting religious smism, and resolving conflicts with neighboring countries. It is becoming increasingly difficult to maintain a high degree of stability under these conditions.
Topic:
Security, Economics, Religion, Governance, and Reform
Political Geography:
Central Asia and Tajikistan

14. The Economics of Egypt's Rising Authoritarian Order

Author:
Amr Adly
Publication Date:
06-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Egypt's economy is in crisis as the new military-backed regime seeks to reestablish its authority. Fiscal restructuring and austerity measures are necessary to spur economic recovery, but they may be politically difficult to pass at this time. The new regime, therefore, will have to broaden its base and forge a more inclusive coalition of supporters in order to stabilize Egypt, retain power, and restore economic growth.
Topic:
Security and Economics
Political Geography:
Middle East and Egypt

15. Balancing Without Containment: An American Strategy for Managing China

Author:
Ashley J. Tellis
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China is poised to become a major strategic rival to the United States. Whether or not Beijing intends to challenge Washington's primacy, its economic boom and growing national ambitions make competition inevitable. And as China rises, American power will diminish in relative terms, threatening the foundations of the U.S.-backed global order that has engendered unprecedented prosperity worldwide. To avoid this costly outcome, Washington needs a novel strategy to balance China without containing it.
Topic:
Foreign Policy, Economics, and Military Strategy
Political Geography:
United States, China, America, Washington, and Asia

16. The Impact of Asian Investment on Africa's Textile Industries

Author:
Tang Xiaoyang
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Asian investors' impact on Africa's cotton, textile, and apparel sectors may have profound consequences for the continent's industrialization and development. As southeast African countries seek to industrialize and build indigenous cotton-textile-apparel value chains, the interactions between Asian—particularly Chinese—investors and African companies become more and more complex. Indeed, Asian investors present both a challenge to and an opportunity for local industries, and southeast African countries need a clear vision and tailored policies to make the most of the opportunities. Asian investors' impact on Africa's cotton, textile, and apparel sectors may have profound consequences for the continent's industrialization and development. As southeast African countries seek to industrialize and build indigenous cotton-textile-apparel value chains, the interactions between Asian-particularly Chinese-investors and African companies become more and more complex. Indeed, Asian investors present both a challenge to and an opportunity for local industries, and southeast African countries need a clear vision and tailored policies to make the most of the opportunities.
Topic:
Economics and International Trade and Finance
Political Geography:
Africa and Asia

17. Rethinking Urban Mobility: Sustainable Policies for the Century of the City

Author:
Shin-pei Tsay and Victoria Herrmann
Publication Date:
09-2013
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Each week, more than 1 million people move from rural areas to cities around the world, placing huge demands on existing infrastructure—and especially on existing transport systems. Booming cities need contemporary mobility systems capable of transporting increasing numbers of people while doing the least possible harm to the natural environment. Multiple actors, including national and local governments, must work together to create environmentally and financially sustainable urban transport systems.
Topic:
Development, Economics, Environment, Migration, Infrastructure, and Governance

18. The EU Beyond the Crisis: The Unavoidable Challenge of Legitimacy

Author:
Richard Youngs
Publication Date:
10-2013
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The euro crisis has mobilized the masses and unleashed vitally important debates about changing the model of European integration, both economically and politically. Yet, as European governments deepen economic cooperation and the crisis appears to have calmed, European Union (EU) member states feel increasingly confident that fundamental political changes are not necessary. This is a dangerously short-sighted calculation. To build a truly democratic EU, citizens need to have a greater voice in decision making.
Topic:
Debt, Economics, Markets, Regional Cooperation, Monetary Policy, Financial Crisis, and Reform
Political Geography:
Europe

19. The Eastern Partnership—It Is High Time to Start a Real "Partnership"

Author:
Paweł Dariusz Wiśniewski
Publication Date:
11-2013
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The European Union's (EU's) Eastern Partnership, which aims to deepen cooperation between the EU and its Eastern European neighbors, must be modernized. Partner states and the EU have to acknowledge their own failures instead of playing a “blame game” and work together to make the partnership a success. If the Eastern Partnership initiative fails, both sides—along with Russia, whose role is key—will be responsible.
Topic:
Economics, Regional Cooperation, and Treaties and Agreements
Political Geography:
Europe

20. The Eurasian Customs Union: Friend or Foe of the EU?

Author:
Olga Shumylo-Tapiola
Publication Date:
10-2012
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The customs union formed by Russia, Belarus, and Kazakhstan in 2010— the largest in the world by territory—is becoming very real. Though hurdles remain, member states are eliminating non-tariff barriers to trade within the union, moving toward a common external tariff, and fine-tuning a joint customs code. As the customs union's influence on the world stage and in Europe's neighborhood is likely to increase, the European Union (EU) should attempt to understand the project and find ways to protect its own interests.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Russia, Europe, Central Asia, Eurasia, Kazakhstan, and Belarus

21. The Arab World's Education Report Card: School Climate and Citizenship Skills

Author:
Muhammad Faour
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The youth of the Arab world have driven much of the popular upheaval that has overtaken the region in the last year. Calling for fundamental political and economic change, they seek to remake their societies into more open, global players. But if that grassroots momentum is to be solidified, real societal reform must take place.
Topic:
Democratization, Demographics, Economics, Education, Globalization, Regime Change, and Youth Culture
Political Geography:
Middle East, Arabia, and North Africa

22. The Underachiever: Ukraine's Economy Since 1991

Author:
Pekka Sutela
Publication Date:
03-2012
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
When Ukraine became independent in 1991, there were expectations that it would in the near future become a wealthy free market democracy and a full member of the European and Euro-Atlantic communities. The largest country geographically wholly European, and the fifth-biggest European nation by size of population, it was hoped, would become a member of the European Union (EU), the North Atlantic Treaty Organization (NATO), and the Organization for Economic Cooperation and Development (OECD).
Topic:
Corruption, Economics, Emerging Markets, International Trade and Finance, and Governance
Political Geography:
Europe, Ukraine, and Atlantic Ocean

23. Turkey and the Bomb

Author:
Sinan Ülgen
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Though most states that want a nuclear weapon can get one through determined effort, the fact remains that most choose not to proliferate. Turkey is no exception. Not even the prospect of a nuclear-armed Iran is likely to push Ankara to develop its own nuclear weapons. The only circumstance where such a scenario would acquire a degree of likelihood is a breakdown in Turkey's security relationship with the United States.
Topic:
Security, Defense Policy, Diplomacy, Economics, Nuclear Weapons, and Regional Cooperation
Political Geography:
United States, Turkey, and Middle East

24. Understanding Unconventional Oil

Author:
Deborah Gordon
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Conventional oil production has peaked and is now on a terminal, long-run global decline. However, contrary to conventional wisdom, which many embraced during back-to-back oil crises in the 1970s, oil is not running out. It is, instead, changing form—geographically, geologically, chemically, and economically.
Topic:
Economics, Globalization, Markets, Oil, and Science and Technology

25. Building a Better Yemen

Author:
Charles Schmitz
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The Yemeni economy is often portrayed as a dire picture of impending disaster, as the country runs out of oil and even more devastatingly of water. Yemen's economic problems are real, but they are not caused by an absolute, irreparable shortage of resources. Rather, it is Yemen's contentious politics and its lack of institutional development that constitute the main obstacle to surmounting present economic difficulties.
Topic:
Political Violence, Development, Economics, Poverty, Natural Resources, and Fragile/Failed State
Political Geography:
Middle East and Arabia

26. In Search of the Global Middle Class: A New Index

Author:
Uri Dadush and Shimelse Ali
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The swelling middle class in emerging economies has received much attention in recent years, as it well should. The implications of its rise are far-reaching, from expanding economic opportunity to transforming the political landscape in some of the world's most populous countries. Measuring the middle class, however, is no easy task. There is no widely accepted definition of what constitutes the middle class, and the commonly used income-based measures suffer from a number of deficiencies.
Topic:
Economics, Globalization, Political Economy, Poverty, and Social Stratification

27. A Regional Approach to WMD Nonproliferation in the Asia-Pacific

Author:
Togzhan Kassenova
Publication Date:
08-2012
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
The Asia-Pacific region epitomizes the type of proliferation challenges the international community faces. Globalization turned the region into one of the most important international trade hubs, the home to leading dual-use companies, and the anticipated site of the world's most significant growth in nuclear energy. While those trends are beneficial, they also create new sources of weapons of mass destruction (WMD) proliferation.
Topic:
Arms Control and Proliferation, Development, Economics, International Trade and Finance, Markets, Weapons of Mass Destruction, and Nuclear Power
Political Geography:
Asia and Australia

28. Challenges of Egypt's Economic Transition

Author:
Ibrahim Saif
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The Egyptian economy is going through a critical period as the country transitions to democracy. While the shift from authoritarianism is certainly welcome, it has inevitably incited instability unknown to Egypt for the past thirty years. The implementation of economic reform amid this uncertainty is particularly challenging as political demands take precedence. The state attempted several times to revive the Egyptian economy since the Infitah, or “open door,” policy initiated by President Anwar Sadat in the mid-1970s. Successive, though unsuccessful, reform programs during the 1990s contributed to the pervasive poverty that served as a central driver of the 2011 Egyptian revolution and persists today. Past experiences can provide useful lessons for what to avoid in the future, even if they are unable to impart what exactly should be done.
Topic:
Democratization, Development, Economics, and Regime Change
Political Geography:
Arabia, North Africa, and Egypt

29. Education for Citizenship in the Arab World: Key to the Future

Author:
Marwan Muasher and Muhammad Faour
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Any romantic notions in the West that the 2011 Arab uprisings could create instantaneous democracy in countries that have succeeded at toppling their leaders are already shattering. In the absence of strong political parties and viable civil society structures in most of the Arab world, these uprisings are proving to be only the first step in a process that will not follow a clear path and will take years to unfold. Much trial and error will take place and the region will experience multiple ups and downs before stable political and economic systems take hold.
Topic:
Democratization, Development, Economics, Education, and Regime Change
Political Geography:
Middle East and Arabia

30. Russia, China and the Geopolitics of Energy in Central Asia

Author:
Alexandros Petersen and Katinka Barysch
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Energy has come to symbolise the geopolitics of the 21st century, reflecting countries' diminishing reliance on military and political power. Today, energy is an instrument of geopolitical competition, like nuclear weapons or large armies were during the Cold War. The means of international influence have become more diverse and sophisticated, but the goals remain much the same: national security, power projection, and control over resources and territory.
Topic:
Economics, Energy Policy, International Trade and Finance, Bilateral Relations, and Natural Resources
Political Geography:
Russia, China, and Central Asia

31. Sovereign Wealth Funds and the Santiago Principles: Where Do They Stand?

Author:
Sven Behrendt
Publication Date:
05-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Sovereign wealth funds (SWFs) have become dominant players in global finance and world affairs, controlling considerable financial assets. Their investment behavior continues to resonate across the world economy and their increasingly extroverted investment policy prompted a political backlash in mature economies. Reacting to this backlash, in October 2008 a group of 26 SWFs commit-ted themselves to transparency, good governance, and accountability standards by signing a voluntary code of principles, the “Generally Accepted Principles and Practices,” for SWFs (GAAP), also known as the “Santiago Principles.”
Topic:
International Relations, Economics, Treaties and Agreements, and Sovereign Wealth Funds

32. Pakistan\'s Roller-Coaster Economy: Tax Evasion Stifles Growth

Author:
S. Akbar Zaidi
Publication Date:
09-2010
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
Over the last sixty years, Pakistan\'s economy has seen severe ups and downs. Once considered a model for other developing nations, Pakistan has been unable to sustain solid growth. Furthermore, a third of its population now lives below the poverty line, and its literacy rate is abysmally low. Pakistan\'s economic instability stems in large part from low government revenue resulting from the elite\'s use of tax evasions, loopholes, and exemptions. Fewer than three million of Pakistan\'s 175 million citizens pay any income taxes, and the country\'s tax-to-GDP ratio is only 9 percent. Tax evasion means fewer resources are available for essential social services. Pakistan spends too much on defense and too little on development: It has spent twice as much on defense during peacetime as it has on education and health combined. The government knows how to increase its revenue through tax reform, but the rich and powerful have resisted such measures for fear of lowering their own incomes. Without sufficient revenue the government will continue to be burdened with an unsustainable debt. It needs to end tax exemptions for the wealthy and develop broader, long-term economic plans for sustain able growth. In the past, the United States and other Western nations have come to Pakistan\'s rescue by paying off debts and funding development initiatives. Pakistan\'s elite has no reason to support reform as long as these bailouts come with no conditions attached.
Topic:
Development, Economics, and Monetary Policy
Political Geography:
Pakistan and United States

33. Five Surprises of the Great Recession

Author:
Uri Dadush and Vera Eidelman
Publication Date:
11-2010
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
The Great Recession included five major surprises: (1) the severity of the global trade and output collapse, (2) the United States suffered a milder than expected recession, (3) Europe saw the onset of a severe sovereign debt crisis, (4) China grew at an extraordinary rate even though it's greatly dependent on exports, and (5) Latin America showed remarkable resilience.
Topic:
Economics, Globalization, Global Recession, and Financial Crisis
Political Geography:
United States, China, Europe, and Latin America

34. Russia's Oil Exports: Economic Rationale Versus Strategic Gains

Author:
Adnan Vatansever
Publication Date:
12-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia, the world's largest oil producer, is vigorously promoting the development of new outlets for oil exports. While the recent launch of a long-awaited cross-border oil pipeline between Russia and China has received most of the publicity, it is a part of a much larger Russian initiative aimed at developing new oil export infrastructure in almost every possible direction: Asia, the Baltic Sea region, the Black Sea region, and the Arctic. This export strategy will have considerable policy and economic implications for Eastern and Central Europe and even the United States.
Topic:
Economics, Energy Policy, Markets, and Oil
Political Geography:
United States and Europe

35. Reinterpreting China's Success Through the New Economic Geography

Author:
Yukon Huang
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China has in recent years capitalized on its huge, diverse population and geographical expanse to transform itself into the world's most efficient assembler and exporter of a wide range of manufactured goods. In achieving this development, it has followed a strategy essentially based on the New Economic Geography, which explains how lower transportation costs and concentration of economic activities foster economies of scale and explosive urbanization.
Topic:
Economics, Globalization, and Industrial Policy
Political Geography:
China

36. Sustaining Social Safety Nets: Critical for Economic Recovery

Author:
Alejandro Foxley
Publication Date:
03-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The current global financial shock will be followed by a long period of abnormally high unemployment, and by severe pressure to reduce government expenditures, once the fiscal stimulus runs its course. As a consequence, the coverage and quality of basic social services—from unemployment insurance to health care and social security—may suffer. At the same time, the recession is reducing household income, and thus many households that cannot afford privately provided services will face increasing difficulties in accessing underfunded public services. Significant segments of the middle class might slide back into poverty.
Topic:
Economics, Human Welfare, Labor Issues, and Financial Crisis

37. Russia's Neglected Energy Reserves

Author:
John P. Millhone
Publication Date:
05-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia has the world's largest share of fossil energy resources. During the Soviet era, because this wealth of resources insulated the country from global energy crises, citizens never had to worry about conserving energy, and much was squandered. Since the collapse of the Soviet Union, the situation has improved in western, urban Russia, but great expanses of this vast country continue their inefficient ways. Indeed, recognizing that minimizing waste helps preserve Russia's resources, Russian President Dmitry Medvedev successfully urged the Duma to pass sweeping new energy-efficiency legislation. But more remains to be done to identify how energy resources are used and wasted, and where efficiency might be improved.
Topic:
Economics, Energy Policy, International Trade and Finance, and Labor Issues
Political Geography:
Russia and Soviet Union

38. Regional Trade Blocs: The Way to the Future?

Author:
Alejandro Foxley
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
While middle-income countries have pursued regional trade agreements since the 1960s, these ties are becoming more important as the global economic crisis curtails demand from the United States and other major markets. With the Doha Round of multilateral trade talks stalled, regional trade agreements (RTAs) offer an alternative approach to increase trade, spur stronger economic growth, and lower unemployment rates in participating countries.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Asia, and Latin America

39. The Arctic: A View From Moscow

Author:
Dmitri V. Trenin and Pavel K. Baev
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The Arctic is emerging as the world's next hot spot for oil and gas development. The U.S. Geological Survey has estimated that the Arctic seabed could contain 20 percent of the world's oil and gas resources and Russia's Ministry of Natural Resources says the Arctic territory claimed by Russia could be home to twice the volume of Saudi Arabia's oil reserves. While accessing those reserves once seemed impossible, the melting ice cap now makes it more feasible and opens new shipping lanes for international trade. Countries around the world—particularly Russia—have noticed.
Topic:
Foreign Policy, Economics, Bilateral Relations, and Natural Resources
Political Geography:
Russia, United States, Moscow, and Saudi Arabia

40. Toward Realistic U.S.–India Relations

Author:
George Perkovich
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
As he prepares to visit India in November, President Obama faces criticism that his administration has done too little to enhance U.S.–Indian relations. Pundits of this persuasion in Washington and New Delhi complain that Obama\'s team has tried too hard to cooperate with China in addressing regional and global challenges and has not done enough to bolster India.
Topic:
Foreign Policy, Economics, and Bilateral Relations
Political Geography:
United States, China, Washington, India, Asia, and New Delhi

41. The Oil Boom in the GCC Countries: Old Challenges, Changing Dynamics

Author:
Ibrahim Saif
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The recent oil boom (2002 to mid-2008) generated a large volume of revenues for the six Gulf Cooperation Council (GCC) countries: Bahrain, Oman, Kuwait, Qatar, the United Arab Emirates (UAE), and Saudi Arabia (SA). Estimated at an annual average of U.S. $327 billion over the period 2002– 2006, the revenues more than doubled their average as compared with the preceding five years. The abundant revenues were instrumental in boosting economic growth; and macroeconomic indicators such as growth and investment in the GCC were also robust over the period 2002–2007. On the other hand, other indicators pertinent to the labor market, the structure of the economy, and governance were less positive.
Topic:
Economics, Energy Policy, International Organization, and Oil
Political Geography:
Middle East, Kuwait, Saudi Arabia, Bahrain, and Oman

42. A New Direction for U.S. Policy in the Caspian Region

Author:
Martha Brill Olcott
Publication Date:
02-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
With Washington's influence on the Caspian region at its lowest ebb in many years, the Obama administration could reverse this trend with a new approach that accepts Russia's presence and China's interest as historical and geographical givens and emphasizes short- and medium-term problem solving in multilateral and bilateral settings instead of long-term political and economic transformations. The United States can accomplish more in the Caspian region by focusing on military reform and building security capacity than on forming military alliances. The United States should switch from a multiple pipeline strategy to a policy that advances competition by promoting market pricing for energy producers, consumers, and transit states. The United States could facilitate the introduction of renewable sources of energy as a stimulus to economic recovery and a source of enhanced social security. The United States should develop a nuanced strategy that encourages political development through social and educational programs and local capacity building. The Obama administration should name a high-level official as a presidential envoy to this region.
Topic:
Security, Foreign Policy, Development, Economics, and Nuclear Weapons
Political Geography:
Russia, United States, China, Washington, and Central Asia

43. The G20 Meetings: No Common Framework, No Consensus

Author:
Michael Pettis
Publication Date:
05-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
Participants in the recently completed G20 meeting in London agreed on a number of measures, some substantial and some merely symbolic, but they sidestepped the real issues dividing the major economic powers and, in so doing, failed to address the root causes of the global trade and investment imbalances. This was almost inevitable. China, Europe, and the United States have incompatible conceptual frameworks for understanding the causes of the global financial crisis; furthermore, their conflicting domestic political constraints make agreement on solutions hard to reach. Europeans believe that the root cause of the crisis was excessively deregulated financial systems, and they are skeptical about U.S. and Chinese calls for fiscal expansion, worrying that excessive spending would prolong the imbalances and make the ultimate adjustment more difficult. China also believes that the roots of the crisis lie within the structure of the global financial system, although Beijing insists that it was mainly the reserve status of the U.S. dollar that permitted imbalances to develop to unsustainable levels. China is particularly vulnerable to trade protection and seeks to maintain open markets for its continued export of domestic overcapacity. Like the United States, it is pushing for more aggressive, globally coordinated fiscal expansion. However, because of rigidities in its financial system and development model, its fiscal response to the crisis may exacerbate the difficult global adjustment and may, ironically, increase the chances of trade friction. In a time of contracting demand, the United States controls two-thirds of the most valuable resource in the world: net demand. Consequently, it is U.S. policies that will determine the pace and direction of the global recovery, along with the institutional framework that will govern trade and investment relationships for decades to come. The crisis puts the United States more firmly at the center of the emerging world order than ever. So far, the United States has not understood the need to consider the global outcomes of its recovery policies. Until the major powers can reach consensus about the roots of the imbalance and cooperate on policies to promote recovery, it is likely that the world economy will get worse before it gets better. The United States will drive the recovery process, but in order to do so effectively it will need to recognize its position of strength and negotiate the appropriate agreements with other major powers, especially China, on the pace and nature of the adjustment.
Topic:
Economics, Globalization, International Trade and Finance, and Monetary Policy
Political Geography:
United States, China, Europe, and London

44. Managing Arab Sovereign Wealth in Turbulent Times—and Beyond

Author:
Sven Behrendt and Bassma Kodmani
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The debate about the role that sovereign wealth funds (SWFs) from Arab and other emerging economies play in international financial markets has been a highly cyclical one. Only twelve months ago, the Western public questioned the deeper rationales for sovereign investments in what were perceived to be strategic assets of Western economies. Commentators argued that these investments could harm the long-term competitiveness and national security of Western economies.
Topic:
Economics, International Trade and Finance, Political Economy, and Foreign Direct Investment
Political Geography:
Arabia

45. Recovery: The Global Financial Crisis and Middle-Income Countries

Author:
Alejandro Foxley
Publication Date:
07-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
No country has proved immune to the devastating effects of the current global financial crisis. But the middle-income countries of Eastern Europe, Latin America, and East Asia, which previously had achieved significant progress—economically and socially— have shown themselves to be particularly vulnerable. The crisis has high- lighted important lessons for these countries, which inhabit a twilight zone between the developed and developing worlds –and those that aspire to join their ranks – as they rebuild
Topic:
Economics, Globalization, Markets, and Financial Crisis
Political Geography:
Europe, East Asia, and Latin America

46. WTO Reform: The Time to Start Is Now

Author:
Uri Dadush
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
Since its inception in 1995, the World Trade Organization has been the guardian of stability and predictability in world trade, but it has failed to fulfill its promise as a source of new trade rules and liberalization. Conclusion of the diluted Doha Development Agenda will not end the need for WTO reform. At the heart of WTO reform must be a more flexible approach to negotiations, one more tailored to the needs of individual countries and groups. The process of reflection and consultation on WTO reform should begin with the WTO Ministerial in Geneva in November.
Topic:
Economics, International Organization, International Political Economy, and International Trade and Finance
Political Geography:
Geneva

47. Migrants and the Global Financial Crisis

Author:
Uri Dadush and Lauren Falcao
Publication Date:
12-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
More than 200 million people reside in a country that is not their birthplace. This “diaspora nation” of migrants outranks all but four of the world's countries in population. These migrants make an immense economic contribution both to their host country and to their home country, primarily through transfers of money they earn back to their home country, which are known as “remittances.” About 82 percent of migrants originate in developing countries, and their remittances, which amounted to an estimated $305 billion in 2008, represent an essential source of foreign exchange for these countries, as well as a major instrument in the fight against poverty.
Topic:
Economics, Globalization, Migration, Immigration, and Financial Crisis
Political Geography:
Russia, America, and Dubai

48. Sharing the Pain: The Global Struggle Over Savings

Author:
Michael Pettis
Publication Date:
11-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
In September, the Obama administration imposed tariffs on Chinese tires. In October, the U.S. Department of Commerce announced it would launch an investigation into imports of seamless steel pipes from China. That same month, the U.S. Chamber of Commerce and the U.S.–China Business Council, two groups that in the past have defended Chinese policies, testified to the Office of the U.S. Trade Representative that Chinese contracting rules, technical standards, and licensing requirements were protectionist.
Topic:
Economics, Globalization, Foreign Direct Investment, and Financial Crisis
Political Geography:
China, Middle East, and Asia

49. Russia and the Global Meltdown: Domestic and Foreign Policy Responses to the International Financial Crisis

Author:
Robert Jellinek
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
This paper has its origins in the observation that government responses to the global financial crisis are as much political phenomena as they are economic. The current global financial crisis, among its many consequences, has on a very high level shaken up the world political order. And while the crisis is international in origin—its roots lie in the breadth and the degree of the dispersal of risk associated with mortgagebacked securities, as well as the growing imbalance in international capital flows—its resolution is necessarily being carried out first and foremost on a domestic level. This is not least of all because, in the decade since the Asian financial crises, states have begun to play a dramatically increased role in international finance in relation to both multilateral financial institutions such as the IMF and traditional private actors. In an age where global economic ties are integral to domestic economies and where states themselves are becoming some of the biggest players in international capital markets, a state's global financial standing will more than ever determine its political clout on the world stage. With states acting as market makers, lenders of last resort, and regulators of last resort, the key to understanding the future of individual states in the global economic order can be found only by analyzing states' domestic and foreign policy decisions within the context of the specific constraints facing those states at home and abroad.
Topic:
Economics, Emerging Markets, Human Rights, International Trade and Finance, and Financial Crisis
Political Geography:
Russia and Asia

50. Brazil in the Global Economy: Measuring the Gains From Trade

Author:
Sandra Polaski, Dirk Willenbockel, Eduardo Zepeda, Scott McDonald, Joaquim Bento de Souza Ferreir, Janine Berg, and Karen Thierfelder
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Brazil's economic growth rate has been positive for the past eight years, after two decades of setbacks and extreme volatility. The country has once again been growing—for a sustained period—at rates that exceed its population growth, with average gross domestic product (GDP) growth per capita averaging 1.63 percent from 2000 to 2007. This exceeds average per capita GDP growth of 0.83 percent from 1980 to 1989 and 0.28 percent from 1990 to 1999, although it still falls well short of the 5.92 percent per capita growth rate from 1970 to 1979.
Topic:
Economics, International Trade and Finance, Labor Issues, and Governance
Political Geography:
Brazil and South America

51. Recovery: The Global Financial Crisis and Middle-Income Countries

Author:
Alejandro Foxley
Publication Date:
07-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
No country has proved immune to the devastating effects of the current global financial crisis. But the middle-income countries of Eastern Europe, Latin America, and East Asia, which previously had achieved significant progress—economically and socially—have shown themselves to be particularly vulnerable. The crisis has highlighted important lessons for these countries, which inhabit a twilight zone between the developed and developing worlds?and those that aspire to join their ranks—as they rebuild.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
Europe, East Asia, and Latin America

52. The Impact of the Doha Round on Kenya

Author:
Eduardo Zepeda, Mohamed Chemingui, Hedi Bchir, Christopher Onyango, and Bernadette Wanjala
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
As the first decade of the twenty- first century comes to an end, Kenya's economy is being confronted with a number of challenges that call for carefully crafted, well- informed policies. After fifteen years of stagnation—when the country witnessed zero increase in its gross domestic product (GDP) per capita and investment at levels below 20 percent of GDP—it has risen to become one of Africa's fast growing economies (see Arbache and Page 2008). Between 2004 and 2007, Kenya's economy showed signs of revitalization, and the average annual growth rate climbed above 5 percent, allowing Kenyans to finally enjoy an increase in GDP per capita. However, the political turmoil of 2008 slowed growth, and the current global financial and economic crisis has made it difficult to return to high growth rates. Thus, Kenya now faces shrinking export markets, rising protectionist measures worldwide, and meager financial flows.
Topic:
Agriculture, Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
Kenya and Africa

53. Market Versus State: Postcrisis Economics in Latin America

Author:
Alejandro Foxley
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The global financial crisis has reignited the fierce debate about the roles of the market and the state in modern economies. Latin America, in particular, revisits this debate every time it suffers an external shock. While some blame unregulated markets, others fault states' inability to design institutions or implement policies capable of neutralizing the negative impact of these shocks on output, employment, and social welfare.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
Latin America

54. China's Economic Rise -- Fact and Fiction

Author:
Albert Keidel
Publication Date:
07-2008
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
China's economy will surpass that of the United States by 2035 and be twice its size by midcentury, a new report by Albert Keidel concludes. China's rapid growth is driven by domestic demand—not exports—and will sustain high single-digit growth rates well into this century. In China's Economic Rise—Fact and Fiction, Keidel examines China's likely economic trajectory and its implications for global commercial, institutional, and military leadership.
Topic:
Economics, Globalization, and International Trade and Finance
Political Geography:
United States, China, and Asia

55. International Labor Migration in a Globalizing Economy

Author:
Robert Lucas
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Although migration has expanded less rapidly than either trade or direct investment, migration has become increasingly contentious. The immediate labor market impacts on host countries appear small and dynamic gains from induced technical progress remain undocumented. Circular migration from low-income countries offers a key safety valve where the home state fails to provide employment and security, but there are dangers from over-dependence on the migration–remittance nexus. The least-developed countries benefit only through south–south migration and are probably harmed by a rapidly expanding brain drain. Impact on sending countries: Remittances from migrants back to their home countries can promote rapid growth in developing regions, and the withdrawal of laborers can induce higher wages or less underemployment for those left behind. However, remittance flows can decline quickly and unexpectedly, as currently observed in Mexico. Migration of highly skilled workers can become problematic through "brain-drain" of talented healthcare workers and educators in developing regions.   Relationship between trade and migration: Subsidies in many industrialized countries often protect the sectors in which migrants seek work. There is little or no coherence between the trade and migration policies adopted by higher-income countries. Better internal coordination is necessary to reconcile the two agendas.   Policy implications: Many countries prefer a policy of temporary migration, in which migrants contribute to the local economy but depart before they become dependents. But such programs should be better managed, as reports of abuse and exploitation by recruiters and intermediaries become more common. Effective contracting schemes will require better oversight to improve worker conditions, increased transparency, and bilateral cooperation between the host and recipient nations. Lucas concludes:   "The net potential gains to migrants entering the industrialized countries are extremely high. Yet the impacts of any additional migrations on the incomes of those left at home and of natives in the host countries are more ambiguous. While migrants are clearly the big winners, others may even lose." Robert Lucas is a professor of Economics at Boston University. His research has included work on internal and international migration, employment and human resources, income distribution and inter-generational inequality, international trade and industry, the environment, and sharecropping.  He has served as chief technical adviser to the Malaysia Human Resource Development Program, and director of undergraduate studies and the M.A. program in Economics at Boston University. He is also a Research Affiliate at the MIT Center for International Studies. His latest book, International Migration and Economic Development: Lessons from Low-Income Countries, was published by Edward Elgar Press in 2005.
Topic:
Economics, Globalization, and Migration

56. When Money Talks: Arab Sovereign Wealth Funds in the Global Public Policy Discourse

Author:
Sven Behrendt
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
In recent years, Arab and other emerging economies' sovereign wealth funds (SWFs)—government-controlled pools of assets designed to engage primarily in foreign investments—have grown into a relevant class of investors in global financial markets. Their past and projected growth has triggered an intense debate about their impact on the structure and architecture of the global financial system.
Topic:
Economics and International Political Economy
Political Geography:
Arabia

57. China's Economic Fluctuations: Implications for its Rural Economy

Author:
Albert Keidel
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Since market reforms began in 1978, China's economy has shown cyclical fluctuations. These cycles of change appear in obvious statistical patterns-faster growth and then slower growth, higher price inflation and then lower inflation, stronger investment flows and then weaker investment-and all are accompanied by other cyclical fluctuations in a range of variables and policy initiatives. Most of these fluctuations tend to move together. Their beauty is that they allow analysis of which fluctuations influence others and, by extension, which policies might make a difference in managing China's economy. In this regard, the cyclical interaction between China's formal urban economy and its rural economy is particularly relevant for the issues facing Chinese policy makers today.
Topic:
Economics, International Trade and Finance, and Governance
Political Geography:
China and Asia

58. India's Trade Policy Choices

Author:
Sherman Robinson, Sandra Polaski, Scott McDonald, Manoj Panda, and A. Ganesh-Kumar
Publication Date:
01-2008
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
India's economic growth has accelerated in recent years, and its share of world trade has expanded. These are welcome developments for the country and, given India's large share of the world's population, for the global economy. Yet, despite these recent positive trends, India faces daunting challenges and policy decisions if it is to maintain high economic growth rates, employ its burgeoning population, and raise incomes across the full range of households, skill levels, sectors, and regions. India remains the largest reservoir of poverty in the world. Its recent high growth has been driven mainly by its modern services sector, which accounts for only a small proportion of overall employment and household incomes. Its agricultural sector is in a deep crisis, whether measured by slow growth rates, persistent rural poverty, or widespread farmer suicides.
Topic:
Agriculture, Economics, International Trade and Finance, and Treaties and Agreements
Political Geography:
India

59. China's Looming Crisis—Inflation Returns

Author:
Albert Keidel
Publication Date:
09-2007
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
Surging food prices in China indicate a serious risk of inflationary overheating. Past steps to control inflation caused social protest and deadly unrest. China faces the same risk now. China could avoid severe inflation by learning from its past failures and quickly raising interest rates—but politics make this unlikely. “Cooling off” policies in the future will thus be harsher than necessary. Beyond short-term fixes, China should increase imports of fine grains, with long-term U.S. supply assurances, both to stabilize prices and to promote lucrative farm diversification. U.S. intelligence analysis of this overheating risk should refute the conventional wisdom that China's growth is export-led—it is clearly domestically driven. Policy makers need to realize that China's rapid economic rise is homegrown and sustainable. The United States should quietly remind China that harsh handling of inflation-related unrest could seriously damage U.S.-China relations—especially in a U.S. election year.
Topic:
Economics and Globalization
Political Geography:
United States, China, and Asia

60. U.S. Living Standards in an Era of Globalization

Author:
Sandra Polaski
Publication Date:
07-2007
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
U.S. wages have stagnated for the past three decades, while the workforce has also faced an erosion of job security, health care, and pension plans. This increasing economic insecurity has coincided with rapid globalization. Is there a causal relationship between the two?
Topic:
International Relations, Economics, and Globalization
Political Geography:
United States

61. The Challenge of Economic Reform in the Arab World: Toward More Productive Economies

Author:
Sufyan Alissa
Publication Date:
05-2007
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The issue of economic reform in the Arab world is surrounded by many key questions. How do we define meaningful economic reform and what does it entail? To what extent has such economic reform advanced in the region? What is needed to accelerate the process? Are ruling elites motivated to undertake real economic reform and are they capable of doing so? Are state institutions able to implement economic reform and handle its consequences? Is it possible to have economic transformation without political reform? Furthermore, in individual countries, what can we say about the timing of reform-has it been planned out and phased in or pushed through quickly in response to crises? Who have been the winners and losers? What has been the interplay between economic and political reform-have they proceeded independently or can we detect a direct connection? What has been the role of external rents-whether oil revenues, remittances, or bilateral aid-in the speed or slowness, the depth or shallowness, of the process?
Topic:
Development, Economics, and Government
Political Geography:
Arabia

62. China's Economic Prospects 2006-2020

Author:
Sandra Polaski, Jianwu He, and Li Shantong
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China's economic growth during the past twenty-five years has been remarkable, averaging more than 9 percent a year. While there have been earlier episodes of comparable growth rates in countries such as Japan and South Korea, there is no precedent for such rapid growth in a country the size of China, whose population of 1.3 billion is thirteen times that of Japan when that nation began its rapid growth. The impact on the rest of the world of economic dynamism on this scale is already being felt. If China continues its rapid growth in the coming decades, it will take the global economy into uncharted terrain.
Topic:
Demographics, Development, and Economics
Political Geography:
Japan, China, Asia, and South Korea

63. China's Social Unrest: The Story Behind the Stories

Author:
Albert Kiedel
Publication Date:
09-2006
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
China is confronting widespread violent and even deadly social unrest, raising Communist Party alarms about national security. Some observers speculate that unrest could undermine China's national leadership, as it did in the Ukraine and the Philippines. Some U.S. policy makers might welcome unrest in China as a path to democracy and “freedom.” But rather than an opportunity to transform China's political order, China's social unrest should be understood as the unavoidable side effects—worsened by local corruption—of successful market reforms and expanded economic and social choice. Managing this unrest humanely requires accelerated reform of legal and social institutions with special attention to corruption. More violence would generate more suffering, potentially destabilizing East Asia and harming U.S. interests. The United States should encourage China to strengthen its social reconciliation capabilities, without making electoral political reform a prerequisite for intensifying engagement across the board.
Topic:
Civil Society, Development, and Economics
Political Geography:
United States, China, Ukraine, East Asia, and Asia

64. Illusive Reform: Jordan's Stubborn Stability

Author:
Julia Choucair
Publication Date:
12-2006
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Since independence in 1947, Jordan has shown a remarkable ability to survive as a political entity. Surrounded by regional conflict and starved of resources, it has endured a massive influx of Palestinian refugees and numerous coup attempts. For decades, the Hashemite monarchy has overcome these political and economic storms by weakening institutionalized opposition to its rule and relying on the distribution of benefits and privileges to create a cohesive support base and a security establishment loyal to the existing political order. The regime has been able to sustain this situation by capitalizing on Jordan's geographic centrality. Benefiting from Jordan's image as an oasis of stability in a deeply troubled region, the monarchy has been able to secure a flow of external assistance that has helped counteract the lack of natural resources and maintain domestic political stability. But the balance has always been precarious. The contemporary process of political reform in Jordan must be understood in this context.
Topic:
International Relations, Security, Democratization, and Economics
Political Geography:
Middle East and Jordan

65. Intellectual Property Rights as a Key Obstacle to Russia's WTO Accession

Author:
Matthew Ocheltree and Sherman Katz
Publication Date:
10-2006
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Russia has been in the process of seeking membership in the World Trade Organization (WTO) since June 1993. Currently, the United States is the only major economic power that has yet to finalize a bilateral market access agreement with the Russian Federation. Most observers of the situation concur that the enforcement of intellectual property rights laws remains, along with agriculture, one of the two major hurdles to Russian accession to the World Trade Organization.
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
Russia, United States, Europe, and Asia

66. Reading Russia Right

Author:
Dmitri V. Trenin
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
After the fall of Communism, Russia reverted to czarism. But more importantly, Russia embraced capitalism. Although not democratic, Russia is largely free. Property rights are more deeply anchored than they were five years ago, and the once-collectivist society is going private. Indeed, private consumption is the main driver of economic growth. Russia's future now depends heavily on how fast a middle class—a self-identified group with personal stakes in having a law-based government accountable to tax payers—can be created. The West needs to take the long view, stay engaged, and maximize contacts, especially with younger Russians.
Topic:
Economics and Government
Political Geography:
Russia, Europe, and Asia

67. China's Currency: Not the Problem

Author:
Albert Keidel
Publication Date:
06-2005
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
In Washington, politicians and pundits have settled on a single magical solution for the country's economic ills: getting China to revalue its currency, the RMB. By any reasonable economic measure, however, the RMB is not undervalued. China does have a trade surplus with the United States, but it has a trade deficit with the rest of the world. And China's accumulation of dollar reserves is not the result of trade surpluses, but of large investment inflows caused in part by speculators' betting that China will yield to U.S. pressure. Focusing on China's currency is a distraction. If the United States wants to improve its economy for the long haul, it had best look elsewhere beginning with raising the productivity of American workers.
Topic:
Economics and Government
Political Geography:
United States, China, America, Washington, and Asia

68. Lessons Not Learned: Problems with Western Aid for Law Reform in Postcommunist Countries

Author:
Wade Channell
Publication Date:
05-2005
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
THE FALL OF THE BERLIN WALL IN 1989 and the subsequent breakup of the Soviet Union presented an unparalleled opportunity for fundamental political and economic change in more than two dozen countries. As postcommunist countries sought to attain the economic development of their Western neighbors, it became clear that the existing framework of laws and institutions would not support the desired growth. Reformers and development experts soon identified a panoply of gaps and shortcomings in financial resources, human resources, and organizational capacity, all of which appeared ripe for outside assistance.
Topic:
International Relations and Economics
Political Geography:
Eastern Europe, Soviet Union, Portugal, and Berlin

69. A Better Way to Support Middle East Reform

Author:
Thomas Carothers
Publication Date:
02-2005
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
The Middle East Partnership Initiative (MEPI), an important component of the Bush administration's policy of promoting Middle East reform, is falling short. MEPI should be relaunched as a private foundation funded by the government, akin to the Asia Foundation or the Eurasia Foundation. Such a relaunch would permit MEPI to develop greater expertise in the region, use more flexible, effective aid methods, and gain some independence from other U.S. programs and policies that serve conflicting ends. The restructuring of MEPI should be part of a broader set of measures to establish a more visible, coherent institutional policy structure to pursue the critical goal of fundamental political and economic change in the Middle East.
Topic:
Development, Economics, and Politics
Political Geography:
Eurasia, Middle East, and Asia

70. Why Did the Poorest Countries Fail to Catch Up?

Author:
Branko Milanovic
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
DURING THE PAST TWENTY YEARS, THE POOREST COUNTRIES of the world have fallen further behind the middle-income and rich countries. The median per capita growth of the poorest countries was zero. This is an unexpected outcome because, from the perspective of economic theory, both globalization and economic-policy convergence imply that poor countries should grow faster than the rich. The main reasons why this has not happened lie in poor countries' much greater likelihood of being involved in wars and civil conflicts. This factor alone accounts for an income loss of about 40 percent over twenty years. Slower reforms in poor countries compared with faster reforms in middle-income countries played some, albeit a minimal, role. Increased flows from multilateral lenders did not help either because the net effect of the flows on growth rates is estimated to have been zero. Finally, neither democratization nor better educational attainment of the population can be shown to have had any notable positive impact on poor countries' growth. Reducing the prevalence of conflict seems to be the first and most important step toward restoring growth.
Topic:
Development, Economics, Globalization, Poverty, and Third World

71. Cambodia Blazes A New Path To Economic Growth and Job Creation

Author:
Sandra Polaski
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
A UNIQUE AND SUCCESSFUL INTERNATIONAL POLICY EXPERIMENT has been under way in Cambodia for the last six years. In the country's export apparel factories, working conditions and labor rights are monitored by inspectors from the International Labor Organization (ILO), an international public organization. The results of the inspections are published in credible, highly transparent reports that describe in detail whether the factories are in compliance with national labor laws and internationally agreed basic labor rights. These reports are published on the Internet, and a range of Cambodian and international actors use them. The U.S. government uses the reports as a key input for decisions under an innovative scheme that allows Cambodian firms to sell more apparel in the U.S. market if they improve working conditions and respect workers' rights. Private retail apparel firms that buy from Cambodian factories also use the reports. These buyers, conscious of their brand reputations, use the reliable information they find in the reports to steer orders toward compliant factories and away from noncompliant ones.
Topic:
Foreign Policy, Development, Economics, and Government
Political Geography:
United States, Cambodia, and Southeast Asia

72. Lessons Not Learned: Problems with Western Aid for Law Reform in Postcommunist Countries

Author:
Wade Channell
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
THE FALL OF THE BERLIN WALL IN 1989 and the subsequent breakup of the Soviet Union presented an unparalleled opportunity for fundamental political and economic change in more than two dozen countries. As postcommunist countries sought to attain the economic development of their Western neighbors, it became clear that the existing framework of laws and institutions would not support the desired growth. Reformers and development experts soon identified a panoply of gaps and shortcomings in financial resources, human resources, and organizational capacity, all of which appeared ripe for outside assistance.
Topic:
Democratization, Development, Economics, and International Political Economy

73. Development and Foreign Investments: Lessons Learned from Mexican Banking

Author:
Jacob Steinfeld
Publication Date:
07-2004
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
FOREIGN DIRECT INVESTMENT (FDI) HAS TRANSFORMED MEXICO'S BANKING SYSTEM during the past decade, making it the second largest in Latin America with $165 billion in commercial assets in 2003. In the past four years, Mexico received $25.3 billion of FDI into its financial sector. This composes nearly 40 percent of total FDI inflows into the country. As a result of FDI flowing into the country's financial sector, the Mexican banking system has the highest ratio of foreign ownership in Latin America.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Latin America and Mexico

74. Job Anxiety Is Real-And It's Global

Author:
Sandra Polaski
Publication Date:
05-2004
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
These are not normal times. Two changes in the past decade have produced a huge global oversupply of labor and intense competition for an expanding array of jobs. First, the Cold War's end threw millions of workers, who formerly produced only for the socialist bloc, onto the global labor market. And second, that market has become integrated by technological change that now permits outsourcing of service as well as manufacturing jobs. The current economic recovery will not solve the resulting global mismatch of supply and demand, and it cannot be addressed by the United States alone. Many current policies aggravate the problem. This paper proposes that the United States revise its policies and devote a concerted effort to get the major countries to work together to expand employment at that global level.
Topic:
Economics, Globalization, and Industrial Policy
Political Geography:
United States

75. Small Enterprises and Economic Policy

Author:
Simon Johnson and Anders Åslund
Publication Date:
03-2004
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
Institutions such as strong property rights and the rule of law are important for both long-run economic performance and short-run volatility. Developing good institutions is generally viewed as a desirable goal, but there is no agreed road map for such changes.
Topic:
Economics
Political Geography:
Israel, Eastern Europe, East Asia, and Latin America

76. Promoting the Rule of Law Abroad: The Problem of Knowledge

Author:
Thomas Carothers
Publication Date:
01-2003
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Although the current rule-of-law promotion field is still expanding as it approaches the end of its second decade, it still faces a lack of knowledge at many levels of conception, operation, and evaluation. There is a surprising amount of uncertainty, for example, about the twin rationales of rule-of-law promotion—that promoting the rule of law will contribute to economic development and democratization. There is also uncertainty about what the essence of the rule of law actually is—whether it primarily resides in certain institutional configurations or in more diffuse normative structures. Rule-of-law promoters are also short of knowledge about how the rule of law develops in societies and how such development can be stimulated beyond simplistic efforts to copy institutional forms. And the question of what kinds of larger societal effects will result from specific changes in rule-of-law institutions is also still open. Although aid institutions engaged in rule-of-law assistance do attempt some—lessons learned—exercises, many of the lessons produced are superficial and even those are often not really learned. Several substantial obstacles to greater knowledge accumulation in this field persist, including the complexity of the task of promoting the rule of law, the particularity of legal systems, the unwillingness of aid organizations to invest sufficient resources in evaluations, and the tendency of both academics and lawyers not to pursue systematic empirical research on rule-of-law aid programs. Whether rule-of-law aid is on the path to becoming a well-grounded field of international assistance remains uncertain.
Topic:
International Relations, Democratization, Development, and Economics
Political Geography:
Latin America

77. New Role in U.S. Trade Policy

Author:
John Audley
Publication Date:
09-2002
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
On a hot day in August, President George W. Bush signed into law the Trade Act of 2002. Months of debate between the administration and members of Congress, their constituencies, and other governments were over; with the stroke of his pen President Bush became the first president in almost a decade to enjoy the benefits of trade promotion authority (TPA).
Topic:
Economics, Environment, International Trade and Finance, and Political Economy
Political Geography:
United States

78. Russia's Decline and Uncertain Recovery

Author:
Thomas E. Jr. Graham
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
For much of the first decade after the collapse of the Soviet Union, the issue of reform—of transition to free-market democracy—dominated discussions of Russia in Russia itself and in the West. Russian president Boris Yeltsin advocated reform; Western governments declared their support and offered their assistance. This was particularly true of the U.S. government. President Clinton's administration came into office in 1993 determined to assist Russia in its transformation into “a normal, modern state—democratic in its governance, abiding by its own constitution and by its own laws, market-oriented and prosperous in its economic development, at peace with itself and the rest of the world,” as deputy secretary of state Strobe Talbott, the chief architect of the U.S. administration's Russia policy, was wont to put it.
Topic:
Economics and Government
Political Geography:
Russia, United States, Europe, Asia, and Soviet Union

79. Revisiting the 12 Myths of Central Asia

Author:
Martha Brill Olcott
Publication Date:
09-2001
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
NEARLY TEN YEARS HAVE PASSED since the countries of Central Asia received their independence. This impending anniversary is a good opportunity to look at how these states are managing the state-building process, and in particular what symbolic or ideological defenses they are offering for their actions. States need little protection from their successes but are always seeking ways to explain away their various failures. This paper looks at the “myths” that the leaders of the five Central Asian states are using to explain away the very disappointing results in both economic and especially political reforms and shows how U.S. policy makers have bought into some of these myths as well.
Topic:
Security, Economics, and Politics
Political Geography:
United States, Central Asia, and Asia

80. Pitfalls on the Road to Fiscal Decentralization

Author:
Vito Tanzi
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
IN PAST YEARS, the subject of fiscal decentralization interested mainly specialists—even though several countries, including the United States, came into existence through the political and economic integration of already existing political entities, such as states or principalities. Recently, however, fiscal decentralization has been attracting more general attention, largely because of pressures for greater fiscal decentralization in many countries around the world. The purpose of this paper is to discuss a range of issues related to fiscal decentralization, focusing in particular on possible alternatives to decentralization and various pitfalls that may be associated with it. Unlike much of the previous literature on the subject, therefore, this paper will pay less attention to the actual processes of decentralization and more on whether decentralization is the right direction for a country to choose.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

81. The Myth of Output Collapse after Communism

Author:
Anders Åslund
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
According to official statistics, output plunged in almost all Soviet-type countries toward the end of communism. Then in the first year of transition, the plunges turned even more dramatic, continuing for years. The total registered declines in GDP range from 13 percent in the Czech Republic from 1989 to 1992 to 77 percent in Georgia from 1989 to 1994. This collapse has been widely proclaimed as the worst depression in the industrialized world, exceeding the Great Depression of 1929–33. Both communist and post-communist statistics are deeply flawed, however—and in different ways.
Topic:
Communism and Economics
Political Geography:
Eastern Europe

82. Human Capital and the Quality of Growth

Author:
Nancy Birdsall
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
T. W. SCHULTZ was ahead of his time, at least among economists. The earliest postwar models of development emphasized accumulation of physical capital, and saw spending on health and education as a drain on the accumulation of "productive" assets. But eventually, the newer classical growth models incorporated formally Schultz's insight, and related work on accounting for growth by Hollis Chenery and colleagues at the World Bank pointed to the contribution of more skilled workers with more human capital to increased productivity and growth. The more recent endogenous growth models are even more emphatic. Sustainable growth in these models is the result in part of positive externalities generated by education, an important form of human capital. In these models, the new ideas and new technologies that are critical to high sustained growth rely fundamentally on high levels of human capital.
Topic:
Economics, Education, and Science and Technology
Political Geography:
India

83. Natural Resources, Human Capital, and Growth

Author:
Nancy Birdsall, Thomas Pinckney, and Richard Sabot
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
In this paper, we present evidence that among developing countries, those that are resource-abundant invest less in education. We then discuss the economic processes behind this evidence. We describe a virtuous circle in which rising private returns to human capital and other assets lead to increased work effort and higher rates of private investment immediately, including among the poor, and generate higher productivity and lower inequality in the future. With resource abundance, however, governments are tempted to move away from the policies that generate this virtuous circle. Dutch Disease and related effects tend to lower the rate of return to the agricultural and human capital investments available to the poor. Resource rents accumulate in the hands of the government, and/or a small number of businessmen, further reducing incentives to invest. Staple-trap effects lead to the subsidization of capital, thereby taxing labor. The labor market in the resulting capital-intensive economy offers little benefit for moderate levels of education. The government may try to assuage the poor by directing some proportion of resource rents to populist programs that create new fiscal burdens but that do not enhance productivity. In short, resource abundance tends to break the virtuous circle linking education, growth and inequality in several places: the choice of development strategy, the level of inequality, the lack of incentives for investment in education, and the creation of a welfare state. We illustrate this breakdown by contrasting the cases of Korea and Brazil, and, since resource abundance need not be destiny, we conclude with policy lessons for resource-abundant developing economies.
Topic:
Economics, Education, Emerging Markets, Government, Political Economy, and Third World
Political Geography:
Brazil and Korea

84. After the Crisis: The Social Contract and the Middle Class in East Asia

Author:
Nancy Birdsall and Stephan Haggard
Publication Date:
01-1998
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The Asian financial crisis put in bold relief two big differences between the Asian and the Western economies. One has been hotly contested, while the other has been virtually ignored.
Topic:
Economics and Emerging Markets
Political Geography:
Israel and East Asia