Political Geography: / Publication Year: within 1 Year

1801. Impact of economic sanctions on net commodity-producing and net commodity-consuming countries

Author:: Sergio R. Vale and Eduardo Viola
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Revista Brasileira de Política Internacional (RBPI)
Institution:: Instituto Brasileiro de Relações Internacionais (IBRI)
Abstract:: The war in Ukraine has had a marked economic impact. However, since Russia is a net producer of important commodities, the impact of sanctions on its economy was less than expected. But what would happen if there was a war involving a country that was a net importer of commodities? In the case of a possible China-US conflict over Taiwan, the impact on the world economy would be different, with a deeper recession around the world, but the impact on the Brazilian economy would still be positive on account of the possibility that would remain of agricultural exports to China.
Topic:: Agriculture, Economics, International Trade and Finance, Sanctions, Commodities, and Exports
Political Geography:: Russia, China, Europe, Ukraine, Taiwan, Asia, North America, and United States of America

1802. The impacts on the change of training architecture for UN Peacekeeping Operations in Brazil

Author:: Edson Ramon Lima Pereira dos Santos and Mariana Pimenta Oliveira Baccarini
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Revista Brasileira de Política Internacional (RBPI)
Institution:: Instituto Brasileiro de Relações Internacionais (IBRI)
Abstract:: This article seeks to analyze how norms and procedures created in International Organizations spread to member states. More specifically, the analysis focuses on how changes in the training architecture for UN peace operations, driven by the Brahimi report, caused institutional and procedural changes on the administrative, political and military spheres in Brazil. Combining official documents and analytical literature, through process tracing, we find that the main causal mechanism observed was emulation, given Brazil’s desire to adapt to use the capacity building as a tool for international action.
Topic:: International Cooperation, United Nations, Public Policy, Peace, and Strategic Interests
Political Geography:: Global Focus

1803. What Losing the Iran Deal Could Mean for the Region

Author:: Seyed Hossein Mousavian
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Cairo Review of Global Affairs
Institution:: School of Global Affairs and Public Policy, American University in Cairo
Abstract:: If President Joe Biden is seeking to restore sustainable peace and security in the region, he has to start with reviving the JCPOA
Topic:: Security, Nuclear Weapons, Military Strategy, Peace, JCPOA, and Strategic Interests
Political Geography:: Iran, Middle East, North America, and United States of America

1804. Navigating R2P Between Norm and Practice

Author:: Omar Auf
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Cairo Review of Global Affairs
Institution:: School of Global Affairs and Public Policy, American University in Cairo
Abstract:: The idea that states are responsible for the protection of their own people is a powerful normative and transformative one, but is far from complete or conclusive
Topic:: Security, Governance, Police, and Responsibility to Protect (R2P)
Political Geography:: Global Focus

1805. Democratizing International Relations

Author:: Antonio de Aguiar Patriota
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Cairo Review of Global Affairs
Institution:: School of Global Affairs and Public Policy, American University in Cairo
Abstract:: Former UN Secretary-General Boutros Boutros-Ghali deserves to be remembered for his defense of the application of democratic principles to the international order. Today, the multipolarity of the contemporary world can help further Botrous-Ghali’s vision
Topic:: International Relations, International Cooperation, United Nations, Democracy, Multilateralism, and International Order
Political Geography:: Global Focus

1806. Strategic Survival in Syria

Author:: Omar Abu Layla
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Cairo Review of Global Affairs
Institution:: School of Global Affairs and Public Policy, American University in Cairo
Abstract:: How Russia and Iran maintain their grip in Syria under the shadows of the Ukraine war
Topic:: Defense Policy, Conflict, Strategic Stability, and Strategic Interests
Political Geography:: Russia, Europe, Iran, Ukraine, Middle East, and Syria

1807. Fortune and Hazard for Algeria

Author:: Zine Labidine Ghebouli
Publication Date:: 01-2023
Content Type:: Journal Article
Journal:: Cairo Review of Global Affairs
Institution:: School of Global Affairs and Public Policy, American University in Cairo
Abstract:: War in Ukraine has brought new cash flow to Algiers, but the state must walk an ever-narrowing path to maintain its non-alignment
Topic:: Security, Military Strategy, Conflict, and Russia-Ukraine War
Political Geography:: Africa and Algeria

1808. From a space of conflict to a space of peace: The role of urban planners in advancing the peace process

Author:: Oded Haas
Publication Date:: 02-2023
Content Type:: Research Paper
Institution:: Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:: This review paper is based on the concept of creating space to understand the ongoing Israeli-Palestinian conflict. In fact, the paper argues, the conflict produces and is produced by a process of creating conflict spaces. Therefore, intervention is proposed in the process of generating space in order to create an alternative to the conflict space – a space for peace. A joint planning model places urban planners at the heart of the space producing process, and identifies urban planning as activity with great impact potential, both because it mediates between the global economy, national policy, and individual daily life in the production of space, and because it can promote the creation of a peace space born of professional consensus. Joint planning is the practice of bringing knowledge, experience and an alternative perspective into the planning process. Mixed cities that constitute core spaces in the Israeli-Palestinian conflict are proposed as spaces that currently offer an opportunity to create change, or can be created as change, which will serve as a basis for turning the Israeli-Palestinian conflict space into the Israeli-Palestinian peace space.
Topic:: Conflict, Peace, Urban Planning, and Peacebuilding
Political Geography:: Middle East, Israel, and Palestine

1809. Area C: From a Hub of the Israeli-Palestinian Conflict to a Space for “Creeping Peace”

Author:: Omer Zanany
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Mitvim: The Israeli Institute for Regional Foreign Policies
Abstract:: Area C of the Occupied Palestinian Territories is a key hub of the Israeli-Palestinian Conflict claimed by Israelis and Palestinians and left under temporary Israeli responsibility by the Interim Agreement (1995). For almost three decades, Israel has been reducing the Palestinian living space in the area and deepening its hold, managing all planning and building processes, expanding settlement areas and so-called “state lands” and demarcating “military zones” and “nature reserves” for itself. The collapse of the peace process also encouraged the Palestinian Authority (since 2009) to act unilaterally on the ground. While Israel has assumed a “piecemeal” approach and sees Area C as a vital space for settlement and security, the Palestinians have taken a “holistic” approach, viewing the area as a necessary space for a contiguous and sustainable state. The campaign currently being waged on the ground perpetuates friction and a bloody struggle over land and infrastructure, distances the chance of a stable Israeli-Palestinian agreement, prevents development and construction for Palestinians, poses a tangible danger to nature and the environment, and deepens humanitarian and legal challenges of population expulsion and relocation. Turning this important area into a foundation for Israeli-Palestinian progress requires two types of policies – a reactive policy in the short term to prevent further deterioration, and a long-term policy of practical cooperation. In light of the new radical right-wing government’s policy advocating the de facto annexation of Area C to Israel, the pro-peace camp must take preventive measures: promote a campaign to “unmask” the government’s moves and intentions and expose the dangers of annexation as a fatal blow to Israel’s identity, security, and political and economic standing; expand demonstrations in conjunction with the overall protest against the new government’s anti-democratic policies; file objections to settlement construction and to harmful measures against the Palestinians. Down the line, Israel and the Palestinians must abandon their “zero sum game” approach and instead formulate joint systemic planning and promote positive steps in Area C: approve outline plans for Palestinian construction that were already submitted to Israel for approval, prevent crime and piracy, and promote joint projects with international and Arab assistance. These include solar power fields, agricultural and food cultivation areas, water and wastewater treatment facilities, and industrial zones. Advancing these measures without a political horizon will result, at most, in some specific improvement. On the other hand, advancing measures with a view to a political settlement – including the transfer of parts of Area C to the Palestinian Authority (PA) and the advancement of a comprehensive economic plan for the Palestinians – will lead to a real change, strengthen Palestinian ability and motivation to prevent terrorism, and make it possible to gradually advance the two-state vision based on the “Creeping Peace” strategy.
Topic:: Occupation, Conflict, Peace, and Peacebuilding
Political Geography:: Middle East, Israel, and Palestine

1810. Building Resilience? The Cybersecurity, Economic & Trade Impacts of Cloud Immunity Requirements

Author:: Matthias Bauer
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: EU Member States should call on the EU’s Cybersecurity Agency (ENISA) and the European Commission to abandon immunity requirements in the proposed EU Cloud Certification Scheme (EUCS). With immunity requirements in the EUCS, the EU risks opening a Pandora’s box, paving the way for data localisation, foreign ownership restrictions, and local establishment requirements in digital industries globally leading to rising trade tensions. ENISA’s current proposal could increase policymakers’ appetite for data localisation in the EU. It would empower the European Commission and Member State authorities to exclude foreign businesses from domestic cloud services markets and set a dangerous precedent for any data-intensive sector. The list of “sectors of high criticality” could be logically extended to both existing services (e.g., financial services) and to new technologies and business models, such as IoT in the energy and healthcare sectors, and autonomous driving in the transport sector. Non-EU jurisdictions would be pressured to respond in kind. EUCS immunity requirements would increase cloud adopters’ exposure to cybersecurity risks. Data localisation often creates obstacles to an integrated management approach towards cybersecurity risks. Country of headquarter and foreign ownership restrictions in the proposed EUCS risk removing global frontier cybersecurity technologies from Member State markets. Excluding these and other EU and non-EU companies from EU Member States could result in a long-lasting security deficit of EU cloud adopters vis-à-vis organisations that are still able to use reliable and often best-practice cloud services offered by providers from outside EU Member States. Immunity requirements in the EUCS are discriminatory by design. They could provoke retaliatory measures by EU trading partners, either unilaterally or through WTO or bilateral FTA (e.g., UK-EU) Dispute Settlement. Local establishment requirements and foreign ownership restrictions would by design discriminate against foreign cloud providers. US-headquartered companies, which currently serve more than 75% of the EU market, would be most affected by EU immunity requirements.[1] Depending on US preferences and the scope of the proposed EUCS, the EU could be subject to retaliatory tariffs of up to USD 12 billion worth of EU goods exports or equivalent restrictions for EU services exports to the US. Other governments could lodge complaints via the WTO as well (e.g., Singapore, Japan, Canada and others, where cloud development is advancing rapidly). EU suppliers are currently in no position to manage a broad-based transition to cloud, and thus such requirements would delay significant efficiency and security gains that current foreign suppliers could offer. A blanket exclusion of non-EU cloud vendors would also likely undermine Europe’s objective to achieve a 75% cloud adoption rate for EU enterprises. Sensitive European businesses and public sector organisations would have to delay migration and make do with legacy systems for a very long time. Contrary to large countries, these negative impacts would be much more pronounced for smaller EU Member States, which lack the presence of large domestic incumbents and generally rely much more on an open international trading regime for digital services. ENISA’s cloud certification scheme should be limited to technical and transparency requirements. Immunity requirements for non-personal data should be addressed in bilateral initiatives such as the EU-US Trade and Technology Council (TTC) or agreements requiring a company that sought to offer services of the highest level of sensitivity to be headquartered in a country granted adequacy with EU data protection rules, or a country that is an adherent to the OECD’s Trusted Government Access principles, or (concerning the US) a participant in the upcoming Trans-Atlantic Data Privacy Framework. Excluding foreign companies from operating in the EU would have far-reaching consequences. If that is the intent, it should require a sound legal analysis and the decision should be taken through a formal legislative procedure at the EU level.
Topic:: Economics, Markets, European Union, Cybersecurity, Digital Economy, Trade, and Resilience
Political Geography:: Europe

1811. The Economic Dividend of Competitiveness

Author:: Fredrik Erixon, Oscar Guinea, Philipp Lamprecht, Elena Sisto, and Erik van der Marel
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: In a world of technological and economic rivalry, the EU must devote increased attention to its competitiveness. Higher levels of competitiveness will help the EU build a more prosperous economy which will in turn produce innovation and resources to address the great challenges of our time. ECIPE published a study presenting a competitiveness compass with concrete policy recommendations that will improve EU’s competitiveness. These policy recommendations, once implemented, will bring tangible benefits to the EU economy in the form of higher levels of trade and productivity. This report presents five scenarios in which the EU pursues competitiveness policies that lead to higher economic growth.
Topic:: Economics, Science and Technology, European Union, Economic Growth, and Competition
Political Geography:: Europe

1812. Building a Mature UK Trade Policy

Author:: David Henig
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: Global Britain has not delivered according to the hopes expressed by supporters of leaving the EU. Trade with the rest of the world has not grown to make up for leaving a bloc with seamless trade, early Free Trade Agreements with Australia and New Zealand are of minor economic significance, and it is hard to discern much of a strategy beyond completing a few more similar deals. Meanwhile the world of trade policy is transformed since 2016, negatively. The US has essentially declared its national interests to be more important than global rules, while the EU wants to act unilaterally as the global regulator. In both, the climate crisis is being used as an excuse to reintroduce protectionist measures threatening economic damage and global stability. Expectations of what a UK outside of the EU could achieve were exaggerated, but nonetheless the country could be doing a lot better in its trade policy. There is no good reason for such tensions as exist with a broad range of frustrated stakeholders, the absence of clear purpose on UK strengths such as services, or the defensiveness that seemingly takes pride in secrecy and resistance to proper scrutiny. Adjustment time was inevitable, but six years should have been enough.
Topic:: Economics, European Union, Free Trade, and Trade Policy
Political Geography:: United Kingdom and Europe

1813. In Support of Market-Driven Standards

Author:: Matthias Bauer, Fredrik Erixon, Oscar Guinea, and Vanika Sharma
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The EU published its new Standardisation Strategy in 2022. The strategy contains some good ideas to improve the way European standards are set. However, in its attempt to gain more control over technical standards, the EU risks killing the goose that lays the golden egg. The primary motivation behind the strategy is the belief that the process governing the way CEN, CENELEC, and ETSI – the three European Standardisation Organisations – take decisions over EU standards favours non-EU multinationals. To address this perceived imbalance, EU National Standardisation Bodies will have the exclusive power to accept standardisation requests, and adopt, revise and withdraw European technical standards. These changes are particularly significant for ETSI, Europe’s Standardisation Body in charge of telecommunication standards and one of Europe’s most successful organisations. ETSI is a prime example of EU normative power since it hosts companies from more than 60 countries, while retaining a large membership of EU firms. The regulatory changes included in the strategy are not risk-free. There could be unintended consequences that may undermine a standardisation system that has delivered significant economic benefits for the EU and the world. First, giving more responsibility to EU’s National Standardisation Organisations will turn a European discussion into 30 (EU and EEA) national debates. As a consequence, small companies will not be able to contribute to each and every one of the National Standardisation Organisations, diluting their contribution, while multinational companies, with the resources needed to cooperate with a larger number of bodies, will benefit from an expanding role in the EU standard setting process. Second, if standards are fragmented along national borders and companies must multiply their efforts to take part in several Standardisation Development Organisations, there will be less resources for Research and Development spending. Finally, if each and every National Standardisation Organisation needs to have a position with regards to the acceptance of a standardisation request, or adoption, revision and withdrawal of European technical standards, the time period required to adopt a technical standard may be extended rather than shortened, which is the exact opposite of what the European Commission wants to achieve. The regulatory changes included in the EU Standardisation Strategy are akin to cracking a nut with a sledgehammer. If the European Commission is concerned about the influence of non-EU companies in European Standardisation Bodies, it does not need to overhaul their governance systems. Supporting greater participation of European firms in the European standard system will ease EU’s concerns without the downside risks associated with changing the rules of the game that govern Europe’s Standardisation Bodies. The success of the European standardisation system, which is market-driven and based on consensus, has had significant economic benefits in the development of specific industries, like the European Information and Communication Technologies (ICT). Technical standards in ICT have shaped a European industry that is not only dynamic and international but also enjoys some of the highest levels of wages and Research and Development spending. Moreover, if technical standards are not developed through an open, consensus-based, and industry-led voluntary process, they will be developed in different ways. For instance, governments and private companies can develop standards by themselves. Both solutions are inferior to the current market-driven approach that governs European standards. However, the European market-driven approach to set standards is voluntary, and its success and continuation must not be assumed. European policymakers should be worried about tinkering with a European standardisation system which has produced economic specialisation and innovation to the benefits of EU firms and consumers.
Topic:: Markets, European Union, Regulation, Economy, and Standardization
Political Geography:: Europe

1814. What is Wrong with Europe’s Shattered Single Market? – Lessons from Policy Fragmentation and Misdirected Approaches to EU Competition Policy

Author:: Matthias Bauer
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: What is wrong with Europe’s Single Market? The brief answer to that question is that it does not really exist – it is unsingle. The Single Market is in many ways a political illusion. It exists only nominally. Any company doing business in Europe faces significant barriers to cross-border exchanges within the EU, and it is these barriers that hamper companies’ ability to scale and compete internationally on the back of innovation and economic integration. We outline that Brussels and national governments need to beat the drum for eliminating policy fragmentation in Europe’s internal market and at the same time change course in competition policy to sufficiently support investments in innovation, business growth, and the adoption of advanced technologies across industries. Major economic indicators show that Europe is caught in a protracted corporate and technology crisis. The EU has for a very long time now been tailing US corporate and innovation leadership. At the same time, competition with technology-intensive imports from China is getting increasingly intense. Europe’s underperformance is rooted in a legally fragmented internal market which is disincentivising business growth and innovation. On top of that, an outdated approach to competition policy is discouraging businesses from adopting innovation and scaling across national borders, risking that EU companies continue to lose clout and international competitiveness. 30 years have passed since the formal establishment of Europe’s Single Market. Data reveals that regulatory convergence has reversed or come to a halt in most policy areas. Recent policies for technologies and digital business models, which are key sources of cross-industry competitiveness, created new layers of regulation and legal uncertainty in EU and Member State law. Overall, EU policies have not significantly helped European companies, large and small, to do business in another Member State or use advanced technology-enabled services. EU competition policy does not live up to its promise to “enable the proper functioning of the EU’s internal market”. Europe’s competition policy is still fragmented along national borders and largely ignorant to dynamic effects of competition, especially investments in innovation. Due to mixed legal competences, competition rules are often enforced differently by Member States’ national authorities and can be appropriated to support protectionist industrial policy ambitions. The recently enacted Digital Market Act (DMA) demonstrates that the European Commission and Member State authorities favour protection and discretionary enforcement over innovation and economic disruption, without providing solid evidence of abusive business behaviour and consumer harm. With the DMA, the EU introduced legislation with serious ambiguities in objectives, concepts, and rules, and explicitly allows national Member States to regulate competition at their own discretion. A recent attempt by Germany’s competition authority, the Bundeskartellamt, to enforce its own rulebook for large digital companies (Section 19a of the German Competition Act) risks creating a patchwork of competition rules for large providers of advanced digital services across the EU. Local adopters of advanced digital services, particularly small businesses, that use advanced technology services to compete in their markets would be confronted with less choice and quality. Recently imposed policies under the umbrella of European Strategic Autonomy will hardly help policymakers in their ambition to achieve “innovation and technology leadership”. The paramount task for the EU and national governments is to eliminate policy fragmentation in Europe’s internal market, accompanied by an approach to competition policy that embraces investments in innovation and business growth while accounting for the substantial value created through the adoption of innovative technologies and disruptive business models across industries in the EU.
Topic:: Markets, European Union, Economy, and Competition
Political Geography:: Europe

1815. Reforming Standard Essential Patents: Trade, Specialisation, and International Jurisprudence

Author:: Fredrik Erixon and Oscar Guinea
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The European Commission is considering a radical overhaul of the system governing Standard Essential Patents (SEPs). A leaked proposal suggests that the Commission wants to take control over the registration of SEPs, take efforts to regulate their essentiality, and intervene in negotiations over royalty rates if parties do not come to an agreement. The underlying assumption is that such a system will benefit SEP implementers and the European economy, and that the common holders of SEPs will be cut down a size or two. The logic behind this policy is that, since there are more SEP implementers than holders, any change in favour of implementers will have a net positive effect on the EU economy. However, this is doubtful. The EU is a R&D powerhouse for many of the technologies protected under SEPs and since most of the global production of the goods using these technologies is done outside Europe, the EU is a net exporter of innovation and a receiver of revenues from the licensing of these technologies. Using data on trade, specialisation, and market revenues, this paper comes to a different conclusion: the EU economy is likely to be a net loser if the balance between holders and implementers is changed. Moreover, there is a general and fundamental interest for Europe to preserve a system of standards and SEPs that allows it to punch above its weight in international policies and practices in standards and patents.
Topic:: Reform, European Union, Trade, Patents, Specialization, European Commission, and Jurisprudence
Political Geography:: Europe

1816. Strategic Autonomy and the Competitiveness of Europe’s Innovative Pharmaceutical Sector: A Wake-up Call

Author:: Fredrik Erixon and Oscar Guinea
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: It is high time for Europe to break its relative decline in the pharmaceutical sector. Europe used to be the preeminent region in the world for Research and Development and innovation in the sector – being the location for a majority of R&D and the development of new medicines. However, its competitiveness has been going down for several decades – and, in more recent time, the pace of the decline is now accelerating. Europe is not just outpaced by the United States. Unless there is a new direction, China will soon be ahead of Europe too. Europe is behind the global frontier in innovation and new product development in medicines. It is not just Europe’s share of global R&D that is going down. Of all the new chemical and biological entities that are developed, Europe is contributing a falling share. There is a similar development in the drug pipeline – medicines that are in the regulatory approval process. The location of clinical trials for Advanced Therapy Medicinal Products – an area of new frontline drug development – is moving out of Europe. If Europe is to improve its strategic autonomy and restore competitiveness in the pharmaceutical sector, better policies are needed to incentivise innovation and attract R&D investment. A new strategy for the pharmaceutical industry should include – among other things – better protection of intellectual property, more and focused R&D expenditures, and streamlined regulatory and reimbursement processes.
Topic:: European Union, Pharmaceuticals, Strategic Autonomy, Research and Development, and Competition
Political Geography:: Europe

1817. Trade and Competitiveness: Putting the Firm at the Centre of the Analysis

Author:: Lucian Cernat and Oscar Guinea
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The European Commission published its communication for the long-term competitiveness of the EU. Trade and Open Strategic Autonomy were among the selected policy areas that will drive EU competitiveness in the future and trade with the rest of the world as a share of EU Gross Domestic Product (GDP) was the selected indicator to measure progress. This Policy Brief proposes a new set of indicators that complement this and similar indicators that focus on the value of trade. Using the Trade by Enterprise Characteristics (TEC) database, this paper produces indicators that measure the number of exporters, non-EU suppliers, non-EU customers, and foreign companies. By putting the firm at the centre of the analysis, these indicators offer insights that complement policy-makers’ views on trade and competitiveness.
Topic:: European Union, GDP, Trade, Strategic Autonomy, European Commission, Economic Competition, and Competition
Political Geography:: Europe

1818. Increasing Systemic Legal Risks in the EU: The Economic Impacts of Changes to the EU’s Product Liability Legislation

Author:: Matthias Bauer and Elena Sisto
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: The EU’s Product Liability Directive (PLD) determines the rules for strict product liability in the EU. It establishes a framework in which manufacturers’ liability is determined solely based on the presence of defects in the product, regardless of the manufacturer’s fault. The PLD is intended to serve as a “safety net” when fault-based or contractual liability rules do not offer sufficient compensation to consumers. It operates independently from contractual arrangements between businesses and consumers, and it cannot be weakened by contractual agreements between businesses and consumers. The PLD is a horizontal regulation that applies to a wide range of industries in the EU because it applies to all products available on the EU market. The recently proposed changes by the European Commission would increase systemic legal uncertainty for producers and sellers of technology-intensive goods and services in the EU. The impact assessment of the European Commission does not sufficiently account for changes to the PLD proposed in 2022. Nor does it sufficiently account for the major impacts of increased legal uncertainty for European businesses. Legislators in the Council and the European Parliament should slow negotiations to allow time for policymakers to collect more evidence on the impacts on businesses, insurers, and courts we detail in this paper. This would be an opportunity to improve regulatory quality in light of the high levels of legal uncertainty associated with the changes proposed by the Commission.
Topic:: Economics, European Union, Legislation, and Risk
Political Geography:: Europe

1819. The Insurance Implications of Government Student Loan Repayment Schemes

Author:: Martin Gervais, Qian Liu, and Lance Lochner
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Centre for Human Capital and Productivity (CHCP), Western University
Abstract:: A large literature examines the extent to which consumption responds to idiosyncratic earnings shocks.1 This paper studies whether student loan repayments serve as a source of insurance, much like government tax and transfer programs.2 Indeed, this insurance mechanism is an explicit aim of formal income-contingent repayment schemes in many countries, where the efficient structure of contingencies depends on such market frictions as moral hazard, adverse selection, and costly income verification (Lochner and Monge-Naranjo, 2016). We use new administrative data that links detailed information on Canadian student loan recipients with their repayment and income histories from the Canada Student Loans Program (CSLP), income tax filings, and post-secondary schooling records to measure the extent to which student borrowers adjust loan repayments to insure against income variation.3 Several mechanisms are available for students to adjust loan repayments in response to income fluctuations: formal, like CSLP’s Repayment Assistance Plan (RAP); and informal, such as delinquency or default. Close to 30% of students are enrolled in RAP soon after graduation, although that fraction falls as incomes rise thereafter. ∗ Gervais: University of Georgia, Athens, mgervaisca@gmail.com. Liu: Brock University, St. Catharines, Canada, qliu@brocku.ca. Lochner: Western University, London, Canada, llochner@uwo.ca. We thank the Statistics Canada Research Data Centres at Western University and McMaster University. Lochner gratefully acknowledge support from the Social Sciences and Humanities Research Council of Canada. 1See, e.g., the survey by Meghir and Pistaferri (2011) and references therein. 2Brzozowski et al. (2010) show that the tax and transfer system in Canada is very effective at absorbing income movements. 3Lochner, Liu and Gervais (2021) document sizable transfers implicit in the CSLP through differences in repayment by expected post-school income. Within 5 years of graduation, nearly 10% of borrowers have defaulted on their debt. In addition, borrowers can make larger payments than required should they experience unexpectedly high income: 40% of borrowers have fully repaid their student debt within 5 years of graduation. Indeed, loan payments are shown to increase in income, more so in early years and for individuals with higher initial debt. More formally, we estimate that on average, an unexpected $1,000 change in yearover-year income is associated with a $30 change in loan payment: from a $50 change the year after graduation, declining to a $20 change 5 years after graduation. Loan repayments are also used to absorb income variation that is more permanent in nature: for borrowers whose income is consistently below or above expected income at graduation, the magnitude of average repayment adjustment is similar to the average yearly response.
Topic:: Debt, Education, Economy, Insurance, and Student Loans
Political Geography:: Canada and North America

1820. The Putin Doctrine: What is it? The Russian Strategic Issue and the Enlarged National Security

Author:: Jose Alexandre Altahyde Hage
Publication Date:: 03-2023
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: One can mention that this essay is only a contribution for an urgent issue in International Relations that is igniting debates in part of the academic community and the press in general, Russian expansionism and its conception of international security that, in our view, can be defined as enlarged national security. For Moscow, the dividing line between the international and the domestic whereas considering this issue is very thin4. This is why it is not a part of our objective to exhaust such a broad and complex topic, but to present some of its features.The period analysed in this article begins in 1991, with the demise of the Soviet Union, till January 2022, that marks the beginning of military exercises in some parts of Ukraine, namely the Donbass region, promoted by Putin ́s government. Our theoretical and methodological framework is based on classical and contemporary geopolitical literature, Halford Mackinder and Zbigniew Brzezinski, and International Relations realist thinkers such as Henry Kissinger and John Mearsheimer. Nevertheless, that does not mean that we will not be able to reference some liberal authors, such as Francis Fukuyama and Joseph Stiglitz.Apart from this Introduction, our essay is divided as such: a first part in which we propose a brief review of the concept of doctrine, as used by interstate politics and the State ́s national power principle. Following, we present an analysis of the Putin Doctrine, seen as both a result and as a drive for Moscow ́s revisionism in the face of the current geopolitical balance. In the third part, we examine some passages of the 1990s and of this emerging system, as an era of globalization, liberalization and “shock therapy” that disturbed the Russian quantum. Last, but not least, in our Final Thoughts some reflections will be brought.
Topic:: International Relations, Security, Military Strategy, and Strategic Interests
Political Geography:: Russia and Europe

1821. Political Analysis of the Purchase and technology Transfer Process for Gropen Fighters

Author:: Francisco Porto Junior and Marco Antonio Alves
Publication Date:: 03-2023
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: This article aims to present a descriptive study from a qualitative perspective through a bibliographical analysis, according to Coutinho (2014), which aims to discuss the political process of purchase and Technology Transfer (TT) of GRIPEN NG fighters. For this, we resort to the study of the decision-making process involving interrelationships between the main actors, consensus, interests and values. The goals is to present some reflections about the results of the political game that had taken place during the FHC, Lula and Dilma governments, to verify their relationship with the neoliberal political-social project and its actors in the international sphere. As a guide for this study, questions are presented, which must be answered throughout the text referring to political actors: Who were these actors? How did political actors act? What are the reasons for their actions?
Topic:: Science and Technology, Governance, and Conflict
Political Geography:: Global Focus

1822. The East Mediterranean Gas Forum: Convergence of Regional and Energy Security Concerns

Author:: Stefy Joseph and Aneeta Thomas Peedikayil
Publication Date:: 03-2023
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: As energy insecurity remains an imminent characteristic of energy security, it can simultaneously influence the securitization of non-energy referent objects in other sectors (Adamides and Odysseas 2015). This leads one to examine the geopolitical underpinnings behind the formation of the EMGF which by and large has affected the region as a whole. Egypt, the region’s star player has always played a fundamental role in harbouring relations based on energy and regional security and hence its relations with Greece, Cyprus, Israel, France, Italy and the EU needs examination in the wake of the establishment of the EMGF. The EMGF has been kept as the central pillar in understanding the international political economy behind the energy and regional security convergences by the above-mentioned member states. The objective behind undertaking this study has been to point out the inadequacies in establishing the EMGF which has inevitably shaped the geopolitics of the region.
Topic:: Security, Energy Policy, Natural Resources, and Gas
Political Geography:: Global Focus

1823. United States Foreign Policy Towards Jordan From the Political and Security Dimensions from 1990 to 2017

Author:: Ala Alkhawaldeh and Ayman Hayajneh
Publication Date:: 03-2023
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: Foreign policy cannot be dissociated from what we call the theory of international relations (Holsti, 2015). Relations between Jordan and the United States go back to 1949 when diplomatic relations were first established. The United States contributed to providing economic and military assistance to Jordan for the first time since 1951 and 1957, respectively, and has continued until now. The United States and Jordan share the common goals of a comprehensive, just, and lasting peace in the Middle East and to end violent extremism that threatens the security of Jordan, the region, and the world at large. The peace process and counterterrorism between the two countries aid American interests. The United States has helped Jordan maintain its stability and prosperity through military assistance and close political cooperation (Bush, 2009).This study examines the United States foreign policy towards Jordan from 1990 to 2017. This period witnessed important regional and international political events that significantly impacted American foreign policy in the Arab region and the United States - Jordan in particular. The political events covered in the study have the greatest impact on the development or decline of relations between the two countries in terms of politically and security aspects.
Topic:: Security, Foreign Policy, Military Strategy, Hegemony, and Strategic Interests
Political Geography:: North America and United States of America

1824. The Foreign Policy of Post-Revolutionary Iran: Expediency at the Crossroad of Suprra-Nationalism and Soverignty

Author:: Hamoon Khelghat-Doost
Publication Date:: 03-2023
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: The direction of the Islamic Republic of Iran’s foreign policy has been a source of argument among scholars since the establishment of the revolutionary regime in 1979. Iran’s foreign policy just like its revolution is still a mystery to many researchers as it is difficult to find an appropriate theoretical framework for it. Revolution and how revolutionary states such as China and Cuba view the world and build their foreign relations with other nations have been long discussed in the works of prominent scholars including Leng (1972), Armstrong (1993), Walt (1996), Halliday (2002), and Doma-Nguez & Domínguez (2009). However, what makes the foreign policy of revolutionary Iran different from other revolutionary states (mostly Marxist revolutions) and, therefore, more confusing to study, is the Shi’a Islamic nature of it.
Topic:: Security, Foreign Policy, Defense Policy, Military Strategy, and Strategic Interests
Political Geography:: Iran and Middle East

1825. The Belt and Road Initiative: Dynamics for Latin America and the Caribbean Region

Author:: Anurag Tripathi, Abhishek R.L., and Arun Teja
Publication Date:: 03-2023
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: To examine the challenges and risks arising from the Belt and Road Initiative, this article, in its initial section undertakes a case study of Venezuela in explaining the probable debt-trap situation arising in the Latin American region. Following it, the next section examines the risks arising from BRI from the perspective of dependency theory. It is observed that the US has taken the Latin American region for granted. However, China appears to encroach into what the US considers as its backyard. With this hindsight, China’s increasing involvement in the region is dichotomously analyzed to ponder whether it is a strategy to gain influence or an extension of peaceful rise in the third section. China’s post-pandemic investments in LAC have been analyzed to enhance the argument of a tussle between the US and China. This provides a clear picture of how the two global economic giants are scrambling their money to sustain their influence over LAC. Finally, digital geopolitics has also been considered in explaining the risks and challenges of BRI. It is observed that without any data regulation regime currently across the world, would end up LAC states into what we call data-trap. As all the above is considered, it cannot be ignored that the future of geopolitics is no more validly explained through hegemonic stability theory or hierarchical structures. It is either going to be a horizontally varied power poles anchored to the regional institutions or going back to the idea of sovereignty as the main concept
Topic:: International Cooperation, Infrastructure, Hegemony, and Belt and Road Initiative (BRI)
Political Geography:: China, Asia, South America, and Venezuela

1826. tarr Forum: Iran and the Struggle for 'Normalcy': Woman, Life, Freedom

Publication Date:: 01-2023
Content Type:: Video
Institution:: MIT Center for International Studies
Abstract:: The death of 22-year-old Mahsa Amini on September 16, 2022, in government custody sparked what is commonly referred to as the "hijab protests" but the uprising is about much more, including such themes as agency, women rights, human rights, democracy, political freedoms, due process and justice. This panel investigates how women are at the forefront of resistance to the "Resistance State" in the struggle for "normalcy."
Topic:: Gender Issues, Feminism, Equality, and Activism
Political Geography:: Iran and Middle East

1827. Refugees Revitalizing Emptied Spain

Publication Date:: 02-2023
Content Type:: Video
Institution:: MIT Center for International Studies
Abstract:: Susan Akram is a Clinical Professor at the Boston University School of Law and the Director of the International Human Rights Clinic. Her research and publications focus on immigration, asylum, refugee, forced migration, and human and civil rights issues, with an interest in the Middle East, the Arab, and Muslim world. She is currently leading the "Refugees Revitalizing Emptied Spain" project, which would place refugees and asylum seekers in municipalities that are struggling to survive in the face of massive population loss, as young people move to larger cities in search of economic opportunities.
Topic:: Immigration, Refugees, Asylum, and Humanitarian Crisis
Political Geography:: Europe and Spain

1828. Starr Forum: Ukraine and Russia One Year On: The Domestic Impact of the War

Publication Date:: 03-2023
Content Type:: Video
Institution:: MIT Center for International Studies
Abstract:: Ukraine and Russia One Year On: The Domestic Impact of the War
Topic:: Defense Policy, Military Strategy, Governance, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

1829. Enhancing the Benefits of Human Mobility through Development Interventions

Publication Date:: 03-2023
Content Type:: Video
Institution:: MIT Center for International Studies
Abstract:: During each academic year, the Committee sponsors a seminar series on international migration, The Myron Weiner Seminar Series on International Migration, held at MIT's Center for International Studies. The seminars explore factors affecting international population movements and their impact upon sending and receiving countries and relations among them.
Topic:: Development, Migration, Displacement, and Mobility
Political Geography:: Global Focus

1830. Crossing the Divide: Rural to Urban Migration in Developing Countries

Publication Date:: 03-2023
Content Type:: Video
Institution:: MIT Center for International Studies
Abstract:: Robert E.B. Lucas is Professor of Economics at Boston University. His research has focused largely, though not exclusively, on developing countries. Most of the contributions are empirical with a few theory papers, encompassing international and internal migration, employment and human resources, income distribution and inter-generational inequality, international trade and industry, sharecropping, and the environment. His publications include seven books, the most recent of which are Migration and Development: The Role for Development Aid (2019) and Crossing the Divide: Rural to Urban Migration in Developing Countries (2021).
Topic:: Development, Migration, Governance, Urban, and Rural
Political Geography:: Global Focus

1831. State Upgrading in Global Value Chains and Production Networks: A Conceptual Note

Author:: Andries Bezuidenhout and Søren Jeppesen
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: Despite the contribution and influence of the Global Value Chains (GVCs) and Global Production Networks (GPNs) perspectives on our understanding of processes of economic and social development, the understanding of the role of the state within in this framework has some limitations. Based on an assessment of perspectives on the role of the state within GVCs/GPNs, we propose that there is a need to supplement these existing understandings of the state with an analysis of ‘state upgrading’. Recognizing state upgrading as a distinct process, but related to economic and social upgrading, provides an opportunity to analyze in more detail the dynamic exchange between state institutions and GVCs/GPNs. This allows for the development of an enhanced understanding of what the substantive dimensions of the role of the state within GVCs/GPNs consists of. We suggest that such dimensions should include ‘state representational upgrading’ and ‘state institutional upgrading’. We further propose to extent the analysis to what we term the ‘upgrading nexus’ – describing the dynamic interaction between the three types of upgrading in relation to the main actors in GVCs/GPNs (the private sector/industry, the civil society/labor, and the state). With such an approach, we imply an analytical understanding of how economic, social, and state upgrading in GVCs/GPNs are either mutually reinforcing, or potentially mutually undermining. Our aim is to suggest a way of analytically addressing the role of the state within GVCs/GPNs to supplement and refine existing approaches, not to propose to develop an original theory of the state.
Topic:: Economy, Business, Networks, Institutions, Global Value Chains, Production, and State Upgrading
Political Geography:: Global Focus

1832. Potential and Pitfalls for African Industrialization in Chinese-built Standard Gauge Railways

Author:: Yunnan Chen
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: Railway development has been a key feature of transport infrastructure investments in several African economies, with several new standard gauge railways (SGR) built in the last ten years in Ethiopia, Nigeria, and Kenya. These planned projects have also entailed substantial Chinese involvement through construction contractors, in financing, and in the operations and management, becoming part of the wider Chinese discourse of the Belt and Road Initiative (BRI). They also have significant potential in supporting the industrialization plans of African states, and in some cases, have been explicitly linked to plans for a green transformation. This brief draws from case studies across Africa with a focus on Ethiopia, to highlight the significant potential of railway investments as a low-cost, low-carbon transport for green industrialization, but also its pitfalls and challenges as an infrastructure for governance, and local technology transfer.
Topic:: Development, Belt and Road Initiative (BRI), Industrialization, and Railways
Political Geography:: China and Africa

1833. Electric Vehicles and the Changing Automotive GVC: A Window of Opportunity for African Countries?

Author:: Tobias Wuttke
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: Only two African countries have successfully integrated with the automotive GVC to date: South Africa and Morocco. Their experiences, compared to other even more successful developing and emerging economies with automotive industries, highlight both the opportunities as well as the limitations of automotive GVC participation as an economic development engine. Scale in vehicle production, facilitated by government industrial policy, is the key prerequisite for successful participation with localisation benefits. These fundamentals do not change with the shift to electric vehicles. Governments in Africa and elsewhere need to attract FDI in electric vehicle production and from there can support the development of a local component and materials value chain. Once these basics are covered, governments and local firms can aim for making use of the technological window of opportunity by investing in EV-related technology, mainly battery technology, to potentially capture more value from automotive GVC participation than has traditionally been possible in the ICE vehicle value chain.
Topic:: Development, Industrial Policy, Foreign Direct Investment, Global Value Chains, Automotive Industry, and Electric Vehicles
Political Geography:: Africa

1834. Current Capabilities and Future Potential of African Textile and Apparel Industries

Author:: Lindsay Whitfield and Chema Triki
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: The textile and apparel industry is a globalised industry characterised by a high degree of dependency and fragmentation in global supply chains. From the mid-20th century, cotton textile and apparel manufacturing production relocated from industrialised to developing countries, particularly in Asia, and was quickly followed by the emergence of the petrochemical industry and synthetic fibre production in East Asian countries, while South Asia continued to focus on cotton and natural fibres. China, Bangladesh, and Vietnam are currently the central players in global apparel supply chains, with China and increasingly Vietnam having vertically integrated industries with access to a diverse range of fabrics and thus a large product portfolio. The largest apparel consumer markets are concentrated in Europe, North America, and other wealthy countries such as Japan, as they have higher purchasing power and economically larger markets. Large emerging economies such as China and India largely supply their domestic markets but have not yet become major destination consumption markets for other developing economies. Changes in international trade over the past 30 years fostered the textile and apparel global value chain dynamic. These changes were marked by opening trade borders, lowering tariffs, tax breaks or subsidies offered by various governments, and free trade agreements. Low labour costs and lower production costs have shaped the decisions of global actors to relocate their operations from one country to another. Current global trends are set to transform the global value chains of textiles and apparel again. These trends include increasing production costs in China, the drive to shorten supply chains post-Covid pandemic through nearshoring and seeking countries with yarn-to-garment (or vertical) production capabilities, and a sustainability shift. These trends are leading global apparel buyers to diversify their sourcing away from China and Asia more generally and to consider new supply bases. These structural trends in the industry, together with the AfCFTA, represent a window of opportunity for African countries. African industry actors and their governments should build new textile and apparel industries that seek to participate in global and regional markets and engage with global technologies and international partnerships. Attracting foreign firms with the necessary technical, organisational, and managerial capabilities is essential. The AfCFTA represents a powerful tool to respond to the verticality need of the industry, considering the current production levels of raw materials, but also an opportunity to increase the number of African countries with industrial capabilities in textile and apparel. The ongoing negotiations on rules of origin will significantly impact the continent's potential to create synergetic regional value chains.
Topic:: Development, Industrial Policy, International Trade and Finance, Business, Supply Chains, and Textile Industry
Political Geography:: Africa

1835. Climate Change Mitigation for Late Industrialisers: The Role of Technology Intensity in Manufacturing

Author:: Elvis Korku Avenyo and Fiona Tregenna
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:: Many developing countries now have a renewed focus on industrialisation and industrial policy. This is based on the recognition that industrialisation is a key driver of long-term economic progress and is the central route to improve the well-being of citizens in developing countries (Chenery, 1955; Tregenna, 2016; United Nations Industrial Development Organization [UNIDO], 2016). At the same time, the climate crisis poses an existential threat to the global economy and to humanity and has emerged as a challenge to the industrial development prospects and pathways of developing countries. This is because industrialisation is an important contributor to global warming, specifically to anthropogenic emissions of cardon dioxide (CO2.) (Adom et al., 2012; Han & Chatterjee, 1997). Late industrialisers thus face a dual challenge: industrialising while mitigating climate change (Altenburg & Rodrik, 2017). Hence, there is now a degree of tension as to how late industrialisers can achieve long-term economic development under paths involving heavy or intensive industrialisation, while mitigating emissions and environmental damage more broadly. An emerging discourse recognises the critical need for developing countries to push towards industrial development that, while generating growth in productivity and jobs, is also environmentally sustainable. This is especially important, as poorer countries are particularly vulnerable to the immediate effects of the climate crisis (Altenburg & Rodrik, 2017; Padilla, 2017). Thus, transforming towards sustainable production systems and green industrial policies offers developing countries opportunities to industrialise in an environmentally sustainable way while contributing to job creation and economic prosperity (Altenburg & Rodrik, 2017; Padilla, 2017; Rodrik, 2014). However, the high ‘green premia’ and new access barriers to the ‘green’ energy technologies from advanced economies directly threaten this potential sustainable industrial development pathway in developing countries.
Topic:: Climate Change, Development, Science and Technology, Manufacturing, Industrialization, Sustainability, and Carbon Emissions
Political Geography:: Global Focus

1836. Centralization in National High-Performance Sports Systems: Reasons, Processes, Dimensions, Characteristics, and Open Questions

Author:: Wolfgang Maennig
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Chair for Economic Policy, University of Hamburg
Abstract:: Centralization provides for the bundling of tasks that are relevant to the achievement of an institution's goals. Centralization is discussed in almost all areas of life: For example, in politics (more centralized structures in France vs. more decentralized structures in Germany), in economics (centrally planned organization as in the former COMECON-Countries), decentralized decision-making at the individual level in market economies), and at the corporate level. Objects of centralization can be, for example, decision-making processes, products, personnel and customer groups. In some cases, the aim is to centralize (only) certain objects, while other activities are to remain decentralized, for example. In some cases, centralization in some areas virtually necessitates decentralization in others: For example, centralization by product usually leads to decentralization by sales area. Synergy effects, specialization advantages and, ultimately, cost degression effects are cited as benefits or advantages of more centralization; duplication of work and infrastructure can be avoided. Decision-making processes can be accelerated and simplified – subordinate or geographically distant units do not participate in the decision-making process. Unified concepts and strategies can be better enforced. “Density effects" must also be taken into account: There often are positive spill-over effects between people with related activities, for example, due to imitation and learning effects, but also due to the exchange of experience, which leads to an increase in the productivity of those involved. However, the decentralization tendencies that have emerged as a result of the Corona pandemic, for example through homeworking, partly question this finding. One of the disadvantages of centralization is that large centralized companies have high demands on information and decision-making systems because the experience, problems and ideas for solutions that arise decentrally have to reach the decisionmakers and therefore often (but not always) react more slowly to external changes. Less consideration may be given to regional peculiarities. Due to the standardization usually associated with centralization the scope for adaptation to specific circumstances may be lost. Centralization can increase the distance of decision-makers from "grassroots" concerns. The non-central units can suffer from devaluation, delegitimization, and demotivation, possibly associated with a long-term decrease of activities. The restricted competition of ideas can lead to a long-term decline in competitiveness, since the reduced competencies of the decentralized employees can inhibit their individual performance development. Centralization leads to a greater burden on central decisionmakers because the quantity and complexity of decisions increase. Individuals affected by centralization (in a different location) may experience family relocation problems and additional financial problems. The Corona pandemic and the current China discussion have brought additional arguments into the discussion with contagion risks for (too) many and (too) strong dependencies/blackmail possibilities on centralized procurement. And Ukraine's energy supply, which is based on relatively few large nuclear power plants, illustrates the possible increased susceptibility of certain centralized structures to crises.
Topic:: Sports, Economic Policy, Olympics, and Centralization
Political Geography:: Europe, Germany, and Global Focus

1837. Erdoğan's Re-election as President Raises Concerns among Allies

Author:: Aleksandra Maria Spancerska
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Recep Tayyip Erdoğan’s win in the presidential election and ministerial appointments promises to further weaken democracy, move Türkiye further away from EU standards, and continue so-called personal diplomacy and transactionalism in foreign policy. This could prolong the Turkish parliament’s ratification of Sweden’s accession to NATO.
Topic:: Foreign Policy, NATO, Diplomacy, Elections, European Union, and Recep Tayyip Erdoğan
Political Geography:: Europe, Turkey, Middle East, and Sweden

1838. EU-South Korea Extend Cooperation Beyond the Economy

Author:: Oskar Pietrewicz
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The 10th EU-Republic of Korea Summit, held on 22 May in Seoul, reaffirmed the importance of South Korea as a critical Asian partner of the Union. The meeting also signalled the growing importance of security issues in bilateral relations. South Korea shares the EU’s assessment of Russian aggression against Ukraine and intends to continue to support the invaded country, but not with supplies of military equipment for now. The announcement of a “green” partnership indicates both sides’ willingness to engage in other areas of cooperation, which also will benefit the development of Polish-South Korean relations.
Topic:: Security, International Cooperation, Bilateral Relations, and European Union
Political Geography:: Europe, South Korea, and Poland

1839. Examining Changes in Regional Cooperation in Central Europe from a Polish Perspective

Author:: Tomasz Żornaczuk
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The Visegrad Group (V4), until recently the most active and multidimensional cooperation platform in Central Europe, does not serve currently to strengthen the voice of the region on the most essential issues concerning its security. This is because Hungary’s stance on Russia’s attack on Ukraine is different than that of its partners. That is why Poland is tightening relations with the other Visegrad countries—Czechia and Slovakia. At the same time, Poland is also intensifying cooperation with the Baltic states, which has its source in joint actions on security and eastern affairs in the years preceding the war.
Topic:: Security, Foreign Policy, Regional Cooperation, Visegrad Group, and Russia-Ukraine War
Political Geography:: Russia, Ukraine, Poland, Hungary, Central Europe, Slovakia, and Czechia

1840. What is the Significance of Prigozhin's Revolt for Russian Security Policy?

Author:: Anna Maria Dyner
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: On the night of 23-24 June, Yevgeny Prigozhin, the head of the Wagner Group private military company, which has been fighting in Ukraine and operating elsewhere, stood up to the Russian Ministry of Defence and began an armed march on Moscow. However, in the end he and his forces did not storm the capital, officially as a result of negotiations led by Belarusian leader Alexander Lukashenka. Prigozhin’s actions will worsen the morale of Russian soldiers and mercenaries fighting in Ukraine but will not change Russia’s hostile actions towards NATO countries.
Topic:: NATO, Wagner Group, Russia-Ukraine War, Private Military Companies (PMCs), and Yevgeny Prigozhin
Political Geography:: Russia, Europe, and Ukraine

1841. EU Development Cooperation Policy Shifts from Charity to Self-interest

Author:: Patryk Kugiel
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: In recent years, the EU’s development cooperation policy has evolved, moving away from an approach based on poverty eradication and the needs of partner countries to focusing more on its own interests. This change is supported by the majority of EU members. This gives the EU the opportunity to exert strategic influence in the world but risks the loss of its unique identity as an altruistic donor and attractive partner in development cooperation. The change in the Union’s approach is consistent with the position of Poland, which can use it to reform and strengthen its development aid system.
Topic:: Development, Regional Cooperation, European Union, and Development Aid
Political Geography:: Europe and Poland

1842. Syria returns to the Arab League

Author:: Sara Nowacka
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The decision to restore Syria’s membership in the Arab League (AL) is aimed at Arab states gaining greater control over the situation in the region and reducing external influence, including that of the West. Although the AL imposed a number of obligations on Syrian leader Bashar al-Assad, such as holding elections, it is doubtful whether the League can enforce them. The organisation’s decision to normalise relations with Syria will be used to undermine the effectiveness of the sanctions in counteracting violations of international law, also in the context of the Russian aggression against Ukraine.
Topic:: International Law, Sanctions, Syrian War, Normalization, Bashar al-Assad, Arab League, and Russia-Ukraine War
Political Geography:: Arab Countries and Syria

1843. Using Frozen Russian Assets to Rebuild Ukraine: Possibilities for the EU

Author:: Elzbieta Kaca
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The EU wants to finance the reconstruction of Ukraine, using for this purpose frozen Russian assets, among others. The European Commission proposes to improve the system of confiscation of private assets of sanctioned persons in case of criminal activity and to obtain income from the active management of immobilised Russian public assets. These solutions may yield limited results. To be more effective, the EU would have to reach an international agreement to confiscate the reserves of the Central Bank of the Russian Federation.
Topic:: Sanctions, Reconstruction, European Union, Assets, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

1844. Ending the War in Sudan will be Difficult

Author:: Jędrzej Czerep
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Fighting in Sudan between the regular army and the paramilitary Rapid Support Forces (RSF) has been ongoing since 15 April. The clashes are mainly taking place in the capital, Khartoum, and in the Darfur region, causing the destruction of infrastructure, a humanitarian disaster, and the displacement of the population. Although neither side has achieved military superiority or the support of the population, they are determined to continue fighting until the opponent is eliminated, which makes efforts to achieve a permanent ceasefire difficult. In the longer term, international support for a political solution to the crisis should aim to restore civilian control of the state.
Topic:: Conflict Resolution, War, Armed Forces, and Humanitarian Crisis
Political Geography:: Africa and Sudan

1845. West and China Compete for Tech Influence in Arab Persian Gulf States

Author:: Sara Nowacka
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: New technologies are an increasingly important element of the Sino-American rivalry in the Persian Gulf. China has become the preferred partner in this area due to, for example, the dominant role of government (vs. private) investment in the technology sector in both China and the Gulf states. The intensification of cooperation between the Gulf Cooperation Council (GCC) and China in the field of new technologies may increase the influence of authoritarian states in setting technological standards.
Topic:: Science and Technology, Authoritarianism, Investment, Rivalry, and Gulf Cooperation Council
Political Geography:: China, Middle East, United States of America, and Gulf Nations

1846. China Becoming Globally More Active in the Security Sphere

Author:: Marcin Przychodniak
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: China is expanding its potential to project power abroad. It includes legal changes, expansion of military infrastructure in other countries, and cooperation with partners in the Pacific. An example of their activity in the field of security is the operations of Chinese security companies, mainly in the Middle East and Africa. This should encourage NATO to further deepen cooperation with its members and partners, including with Pacific countries, as well as to strengthen the coordination of EU and U.S. policy towards developing countries.
Topic:: Security, NATO, Infrastructure, and Partnerships
Political Geography:: Africa, China, Middle East, Asia, and Asia-Pacific

1847. Businesses, EU Strengthening International Supply Chains

Author:: Piotr Dzierżanowski
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Over the past three years, global supply chains have experienced problems on an unprecedented scale. Given the rising political tensions and changes in the perception of the role of the economy in international rivalries, a return to international economic relations based on globalisation and trade liberalisation is highly unlikely. Instead, we will witness a necessary strengthening of supply chains, both at the individual business and national levels. For Western economies, the main challenge will be the reduction of related costs.
Topic:: Globalization, European Union, Economy, Business, and Supply Chains
Political Geography:: Europe and Global Focus

1848. Building a Coalition - the U.S. Faces Down Competition with China in the Chip Sector

Author:: Damian Wnukowski
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: In recent months, the U.S. has intensified its international efforts to limit China’s ability to produce the most advanced chips. The result includes the introduction by Japan and the Netherlands of restrictions on the export of modern machines for chip production. In response, China is trying to attract foreign investment and develop its own potential in this sector. The U.S. actions may significantly slow the pace of China’s technological development and economic growth and limit its potential to further strengthen its military capabilities. This may make it difficult for China to support Russia with dual-use products and render possible offensive actions against Taiwan harder.
Topic:: Economy, Production, Semiconductors, and Competition
Political Geography:: China, Asia, North America, and United States of America

1849. South Africa-Russia Maintain Special Relations

Author:: Jędrzej Czerep
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Although South Africa declares it is neutral regarding the war in Ukraine and offers mediation, it remains a de facto ally of Russia. This is due to the strong sentiment among the ruling elites for the period of cooperation with the USSR, its successor Russia and its activity and influence in this country, and the perception that BRICS will help elevate South Africa’s international importance. If Vladimir Putin visits Johannesburg as scheduled in August, the authorities of the state, which is party to the Rome Statute, will not be willing to fulfil their obligation to arrest him or may even leave the International Criminal Court.
Topic:: International Relations, Foreign Policy, BRICS, and Russia-Ukraine War
Political Geography:: Africa, Russia, Europe, Ukraine, and South Africa

1850. Lavrov Visits Latin America to Try to Lure It to Russia's Side

Author:: Bartłomiej Znojek
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: On 17-21 April, the Russian Foreign Minister Sergey Lavrov visited Brazil, Venezuela, Nicaragua, and Cuba. During his trip, he argued that the goals and interests of Russia and most Latin American countries coincide. He also repeated false Russian narratives, for example, about the reasons for the invasion of Ukraine, portraying Russia as a victim of the policy of the West. While he used his stay in Brazil to legitimise the Russian narratives, in other countries, it was mainly about consolidating Russia’s ties with their authoritarian regimes, including cooperation on evading sanctions.
Topic:: Foreign Policy, Diplomacy, Sanctions, Narrative, and Russia-Ukraine War
Political Geography:: Russia and Latin America

1851. U.S. Re-Focuses Arctic Policy-The Consequences for Its Allies

Author:: Paweł Markiewicz
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The Biden administration is increasing the U.S. capabilities in countering the effects of climate change in the Arctic, an aim overlapping the rivalry with Russia and China in this region. The U.S. announced increasing investments in infrastructure projects and defence, for example, modernising the Coast Guard’s Arctic fleet. The planned measures provide an opportunity for closer American cooperation with their allies and may mark the beginning of a regional division of labour in the area of shared defence.
Topic:: Climate Change, Infrastructure, Investment, and Rivalry
Political Geography:: Russia, China, Arctic, and United States of America

1852. Triggering the Rule-of-Law Conditionality Mechanism against Hungary

Author:: Veronika Jóźwiak
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The mechanism that makes the payment of funds from the EU budget conditional on compliance with the principles of the rule of law is the newest instrument for protecting the Union’s financial and political interests. The tool allows the European Commission and the EU Council (Council) to exert influence on Member States that violate the fundamental principles of the Community. Triggering it against Hungary might result in a reduction of EU funds to the country as a consequence of rule-of-law violations for the first time in EU history. It is doubtful, however, that this will lead to systemic changes in Hungary.
Topic:: European Union, Rule of Law, European Commission, and Regional Politics
Political Geography:: Europe and Hungary

1853. Refugees from Ukraine Adapting to the European Labour Market

Author:: Jolanta Szymańska
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Due to the length of the war in Ukraine, more and more refugees from this country have decided to take up employment in the EU. Preliminary data indicate that they are integrating into European labour markets faster than refugees from other regions. However, the mismatch between their jobs and qualifications remains a challenge. Despite the refugees’ inclusion, the deteriorating economic situation in Europe may lead to negative perceptions in host countries.
Topic:: Economics, European Union, Refugees, and Labor Market
Political Geography:: Russia, Europe, and Ukraine

1854. China Adapts Policy in Response to Russia's Aggression Against Ukraine

Author:: Marcin Przychodniak
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: China perceives the Russian aggression against Ukraine as an expression of resistance to the U.S. and NATO hegemony and an important element of building a new international order that marginalises the West. Based on this, China is strengthening strategic cooperation with Russia, striving to weaken the international position of the U.S., the EU, and their partners, while testing reactions to a possible escalation of Chinese actions towards Taiwan, for example. President Xi Jinping expressed this policy course during his March visit to Russia. At the same time, China is trying to gain support from the countries of the Global South. This approach means a continuation of China’s assertive policy towards the European Union, among others.
Topic:: Foreign Policy, NATO, European Union, and Russia-Ukraine War
Political Geography:: Russia, China, Europe, Ukraine, and Asia

1855. With Charisma, Stick, and Carrot: Reviewing the Effectiveness of EU Climate Diplomacy

Author:: Zuzanna Nowak and Stefania Kolarz
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Last year’s COP27 in Sharm el-Sheikh, Egypt, was a major challenge for EU climate diplomacy, which, despite the unfavourable external circumstances (e.g., the war in Ukraine and economic turbulence), contributed to the conference’s positive outcome. The EU, as a global leader in the fight against climate change, seeks to increase its influence with external partners. Many of them would not have joined the climate action without its support. In addition to participation in policy dialogue, among the EU’s main tools of influence are various types of incentives and forms of support, as well as leverage measures such as political conditionality. However, the effectiveness of these tools is still being refined.
Topic:: Climate Change, Diplomacy, European Union, and Influence
Political Geography:: Europe

1856. Climate Protection Litigation on the Rise

Author:: Szymon Zaręba
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: In the last several years, national courts and international institutions have increasingly begun to treat conservative or climate-adverse actions by states as violations of their obligations under international law and human rights. This has been followed by some countries more affected by climate change and engaged in international bodies to put more pressure on Global North states to protect the climate. The sympathetic attitude of international courts towards such complaints may, in the long term, force the need for increased climate ambition or even compensation payments by, among others, Poland.
Topic:: Climate Change, Human Rights, International Law, Courts, and Litigation
Political Geography:: Europe, Poland, and Global Focus

1857. Implications of the Incursions into U.S. and Canadian Airspace

Author:: Marcin Andrzej Piotrowski
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: In the first half of February, a series of serious incidents happened in the airspace of the U.S. and Canada involving shootdowns of four objects, with at least one confirmed as a Chinese balloon, likely used for intelligence. The U.S. administration is conducting an investigation to explain the various platforms, the equipment onboard, and their mission. Because further incidents cannot be excluded, some changes in the rhetoric of the Chinese government should be expected, as well as a higher readiness of air defence networks of the powers.
Topic:: Security, Defense Policy, Territory, and Airspace
Political Geography:: China, Canada, North America, and United States of America

1858. EU Seeks Greater Transparency in Wake of EP Corruption Scandal

Author:: Tomasz Zając
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The European Parliament (EP) corruption scandal, which began with the arrests of then current or former MEPs last December, showed that the mechanisms in place to ensure institutional transparency do not sufficiently protect against the influence of non-EU countries. In addition, the parliament’s internal standards are of limited effectiveness as penalties for non-compliance are not very severe and rarely applied. The effect of the scandal will most likely be to further increase the transparency of EP conduct. The probability of a new body to monitor ethical issues in EU institutions has also increased.
Topic:: Corruption, European Union, Transparency, and European Parliament
Political Geography:: Europe

1859. EU Member States Take a Position on the Emigration of Russians

Author:: Aleksandra Kozioł and Stefania Kolarz
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Hundreds of thousands of Russians have decided to emigrate as Vladimir Putin’s regime has increased repression of citizens with dissenting views of the government or unwilling to participate in the war in Ukraine. Some of them are trying to enter the EU, justifying it with humanitarian reasons. However, the Member States, which decide the granting of visas and residence permits, have different practices. Elaborating a unified approach remains a major challenge for the EU.
Topic:: Migration, European Union, Civilians, and Russia-Ukraine War
Political Geography:: Russia and Europe

1860. Member States Seek to Unmask Russian Espionage in the EU

Author:: Elzbieta Kaca
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: Russian intelligence services are actively developing their networks of spies in the EU. While Member States are trying to counteract this and are undertaking coordinated action, many of them have limited operational capacities. Their cooperation at the EU level is hampered by differences in threat perceptions and a lack of mutual trust. With the aim of developing common competences, EU diplomacy can inform Member State societies about the growing scale of espionage threats by publishing regular reports on this subject.
Topic:: Intelligence, European Union, Espionage, and Threat Perception
Political Geography:: Russia, Europe, and Ukraine

1861. Evolution, not Revolution: Japan Revises Security Policy

Author:: Oskar Pietrewicz
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: In December last year, the government of Kishida Fumio adopted three documents adapting Japan’s security policy to the deteriorating international situation. Its security and national defence strategies highlight challenges from China, Russia, and North Korea, as well as an increase in non-military threats. A third document specifies the need for a record increase in defence spending. Japan’s readiness to deepen cooperation with the U.S. and European countries and its criticism in its assessment of Russia’s aggression against Ukraine create the conditions for the further development of Japan’s cooperation with NATO and the Polish-Japanese dialogue on security.
Topic:: Security, Foreign Policy, Defense Policy, Regional Politics, and Russia-Ukraine War
Political Geography:: Russia, Japan, China, Asia, and North Korea

1862. Iceland Makes Changes to Foreign Policy after Russia's Aggression against Ukraine

Author:: Veronika Jóźwiak
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: The Russian aggression against Ukraine forced Iceland to adjust its foreign policy. As a small country without armed forces but covered by security guarantees as a NATO member, it wants to strengthen ties with its allies while resigning from contacts with Russia. Its partnership with the U.S. and the Nordic countries, as well as activity in international organisations and relations with Central European EU Member States, including Poland, have become even more important to the country.
Topic:: Foreign Policy, NATO, and Russia-Ukraine War
Political Geography:: Russia, Ukraine, and Iceland

1863. Security at Sea: A Turning Point in Maritime

Author:: Scott Tait
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:: Since the end of the Second World War, the United States has been the pre-eminent naval power and ultimate guarantor of global maritime security. It has also been one of the primary beneficiaries of the global maritime economic system, which in turn resourced its naval strength and increased the incentive to use that strength to protect the freedom of the seas. But a number of global changes, all likely beyond the United States’ control, are driving new dynamics in both security and economics in the maritime domain. These challenges include the return of great power competition at sea, the maritime consequences of climate change, increased pollution, the rapid rise of illicit trade and resource exploitation, and the erosion of maritime governance. These challenges are dynamic and inter-related—a change in one will often drive second and third order changes in the others. The United States has proven historically to be resilient and adaptive in the face of great challenges, and the maritime community has traditionally been a leader in innovation, collaboration, and positive-sum solutions. To meet the challenges of today and tomorrow, the United States should double down on those strengths, and work with allies to maintain and strengthen the rules-based international maritime system. Moreover, the United States should be a leader in envisioning changes to that system that will ensure it equitably meets the needs of all, accounts for the changes being driven by climate change and pollution, and anticipates a near-term future where autonomous systems will play a major role in the ecosystem.
Topic:: Security, Environment, Science and Technology, United Nations, and Maritime
Political Geography:: North America and United States of America

1864. Is the Pursuit of Nukes Driven by Leaders or Systems?

Author:: So Yeon (Ellen) Park
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:: Nuclear weapons are widely regarded as one of the most lethal aspects of military arsenals ever created. As such, international relations and security experts have long been concerned about their proliferation. To prevent the spread of nuclear weapons, both policymakers and academic researchers have focused on what are commonly thought to be the primary drivers of proliferation: security concerns and domestic politics and economies. This brief examines another important driver: the role of national leaders themselves. Based on a study of 1,400 leaders in office between 1945 and 2000, author Ellen Park shows that leader personality and experience drive decisions about whether—or not—to pursue nuclear weapons, a finding that holds true across countries (rather than being limited to a few unique cases). Put simply, the pursuit of nuclear weapons is systematically influenced by certain attributes of leaders, such as college major, socioeconomic background, and military and international experience. To predict when and where the spread of nuclear and other emerging technologies will emerge next, policymakers should promote interdisciplinary dialogue to cultivate leader profiles and expand their use.
Topic:: Security, Arms Control and Proliferation, Nuclear Weapons, and Leadership
Political Geography:: Global Focus

1865. Northeast Asia Defense Transparency Index 2021–22

Author:: Chi Fang and Jade Reidy
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: University of California Institute on Global Conflict and Cooperation (IGCC)
Abstract:: Military tensions are on the rise in Northeast Asia as the likes of China, North Korea, and the United States flex their combat capabilities—but this does not mean that war is imminent. This is an important insight from the latest Northeast Asia Defense Transparency Index (DTI) for the period spanning 2021 to 2022. Carried out every two years by the University of California’s Institute on Global Conflict and Cooperation, the DTI offers a detailed examination of how open or closed major regional states are in disclosing information on their defense postures, including defense budgets, publication of official annual defense reports, legislative oversight, and the nature of external military activities. The 2021–22 DTI found that there was only a marginal decline in the overall defense transparency level for Northeast Asia, with Japan showing a noteworthy improvement in its transparency performance. The concealment of defense activities is often an indicator that countries are quietly making preparations for military conflict and contributes to declining trust and confidence. The evidence from this DTI that defense transparency is relatively stable in Northeast Asia is cause for cautious optimism that the long peace that the region has enjoyed remains intact for now. Transparency though is just one indicator of the overall state of defense affairs, and the powerful underlying currents that are the main determinants of war and peace, such as threat perceptions and arms dynamics, all appear to be trending negatively.
Topic:: Defense Policy, International Security, and Transparency
Political Geography:: China, North Korea, Northeast Asia, and United States of America

1866. Sentiment of Bangladeshi Residents Toward Covid-19 Lockdowns: Qualitative Analyses of Open-Ended Responses in a Large Panel Survey

Author:: Daryl Collins, Derry Moore, Pravarakya Reddy Battula, and Avinno Faruk
Publication Date:: 12-2023
Content Type:: Working Paper
Institution:: BRAC Institute of Governance and Development (BIGD), Brac University
Abstract:: This paper explores the public sentiment of Bangladeshi residents concerning the lockdowns imposed by the Bangladeshi government in 2021 in response to COVID-19. Through open-ended question design and analyses of natural language using NLP and sociolinguistic techniques, we show detailed, nuanced sentiments as well as common themes and discussions these sentiments are seated. Additionally, using a range of discursive analytical measures, we explore the interactions between enumerators and participants in live survey conditions, providing alternative methods to and potential field guidance for enumerator survey methods.
Topic:: Public Opinion, Survey, and COVID-19
Political Geography:: Bangladesh and South Asia

1867. Action for Peacekeeping Plus (A4P+): An Update on Monitoring and Implementation after Two Years

Author:: Daniel Forti
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: The UN secretary-general launched Action for Peacekeeping Plus (A4P+) in March 2021, three years after introducing the Action for Peacekeeping (A4P) initiative. A4P+ was conceptualized as a two-year implementation strategy for A4P that prioritizes urgent challenges facing UN peacekeeping. To monitor progress toward achieving these priorities, the UN has developed the A4P+ Plan and the A4P+ Monitoring Framework with specific results, deliverables, and indicators. To date, the UN Department of Peace Operations (DPO) has published two reports assessing the implementation of A4P+ and the impact of these efforts on UN peacekeeping operations. This issue brief takes stock of the monitoring and implementation of A4P+ over the past two years. It begins by explaining the A4P+ priorities and tracing their emergence out of the A4P initiative and Declaration of Shared Commitments. It then discusses highlights from the A4P+ Plan and the two progress reports published as of March 2023 and examines the benefits and limitations of current approaches to monitoring and implementing A4P+. The paper concludes that moving forward, UN officials will need to balance ambitious goals for progress with realistic expectations about what peacekeeping operations can achieve, and when. The UN will also have to decide whether to extend the current set of A4P+ priorities beyond 2023. Ultimately, while A4P+ can help grease the machinery of UN peacekeeping, its long-term impact will depend on member states delivering on their existing political, operational, and financial commitments.
Topic:: United Nations, Peacekeeping, and Monitoring
Political Geography:: Global Focus

1868. Accountability for Crimes against Peacekeepers

Author:: Agathe Sarfati
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: Since 1948, more than 1,000 UN personnel have been killed in malicious acts while serving in UN peacekeeping operations. Since 2013, the vast majority of fatalities have taken place in the Central African Republic (CAR), Mali, and the Democratic Republic of the Congo (DRC). To address this trend, the UN Secretariat and member states have increasingly focused on strengthening the policy framework on accountability to peacekeepers. They have also increasingly focused specifically on how to pursue justice for peacekeepers who have been victims of attacks. This paper focuses on advancing justice for crimes against peacekeepers as one aspect of the overall effort to enhance accountability to peacekeepers. It provides an overview of the role of UN peacekeeping operations in investigating and prosecuting crimes against peacekeepers and the UN’s growing focus on advancing and prioritizing accountability for these crimes. It then examines case studies of criminal cases supported by the UN missions in CAR (MINUSCA), Mali (MINUSMA), and the DRC (MONUSCO) in their respective host states and provides an overview of cross-cutting challenges they have faced. The paper concludes with recommendations to help the UN Secretariat, peacekeeping operations, the Security Council, and other member states accelerate the investigation and prosecution of crimes against peacekeepers in a consistent and balanced manner: The UN Secretariat should maintain a comprehensive approach to accountability, develop a common definition of crimes against peacekeepers, ensure that host states adhere to human rights standards when engaging with those accused of crimes against peacekeepers, and improve internal and external coordination in this area. UN missions should pursue a comprehensive approach to accountability, continue to support host-state investigations and prosecutions of those accused of crimes against peacekeepers, advocate for host-state authorities to pursue accountability, and ensure sustained documentation of and follow-up on cases. The Security Council should reinforce peacekeeping mandates to build the host state’s capacity to pursue accountability and encourage legal clarity on the nature of crimes against peacekeepers. UN member states should use the group of friends to offer new ideas on ways to promote accountability and use the Special Committee on Peacekeeping Operations to discuss ways to improve coordination in this area.
Topic:: Crime, United Nations, Peacekeeping, and Accountability
Political Geography:: Global Focus

1869. Peacekeeping in Nonpermissive Environments: Assessing Troop-Contributing Countries’ Perspectives on Capabilities and Mindsets

Author:: Fiifi Edu-Afful
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: Many peacekeepers are deployed in areas where ongoing armed conflicts or other situations of violence, including attacks against peacekeepers, have constrained their capacity to implement their mandate and protect themselves. This has led some troop-contributing countries (TCCs) to raise concerns about the high-risk environments to which their troops are deployed. One of the most critical issues when deploying troops to nonpermissive environments is ensuring they have the right capabilities and mindset. This paper interrogates TCCs’ perspectives on capabilities and mindsets and explores their implications for peacekeeping policy and practice. The goal is not only to deepen understanding of the UN’s progress on implementing the A4P+ priorities but, more importantly, to assess the state of play of peacekeeping in nonpermissive environments, drawing on the diverse perspectives of TCCs. The paper concludes by considering how capabilities and mindsets relate to accountability for and accountability of peacekeepers. Failure to properly train, equip, and support troops being deployed to nonpermissive environments raises questions about whether the UN and TCCs are accountable to peacekeepers. Likewise, it is unclear to what extent peacekeepers should be held accountable for their performance when they have not been provided the proper equipment, training, and mindset.
Topic:: Environment, United Nations, Peacekeeping, and Armed Conflict
Political Geography:: Global Focus

1870. Forced Marriage by Non-state Armed Groups: Frequency, Forms, and Impact

Author:: Phoebe Donnelly and Emily Myers
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: Many non-state armed groups use forced marriage during armed conflict. This practice has been documented across all geographic regions, in every decade since the 1940s, and across armed groups with many different ideologies. Yet while policymakers, scholars, and practitioners recognize forced marriage as an important form of conflict-related sexual violence (CRSV), there are no frameworks for conceptualizing the frequency and range of forms of forced marriage that occur in conflict. To fill that gap, this paper introduces an original dataset tracking forced marriage in armed conflict and uses the data and illustrative examples to divide forced marriage in armed conflict into three types: member–member forced marriage, member–civilian forced marriage, and civilian–civilian forced marriage. This dataset can be a tool for policymakers and practitioners to understand the impacts of forced marriage in armed conflict and better design prevention strategies and survivor-centered responses. The report concludes with an overview of existing policy, legal, and programmatic responses to forced marriage in conflict settings, including by non-state armed groups, and provides recommendations for how these responses can better address this complex phenomenon: Data collection: Disaggregate data on CRSV by the form of violence (when possible), avoid linking sexual slavery and forced marriage, and gather more data on the unique needs of survivors of forced marriage. Criminal accountability: Continue prosecuting forced marriage as a distinct crime against humanity and promote the inclusion of forced marriage as a distinct crime against humanity during negotiations on the treaty on crimes against humanity. Sanctions: Continue to include information on CRSV in the reports of sanctions monitoring committees, ensure that sanctions listing criteria are applied against perpetrators of forced marriage, and ensure that every panel of experts includes at least one member with expertise on gender issues or CRSV. Reintegration: Factor the different types of forced marriage into the design of reintegration programs and provide support that considers the unique needs of individuals exiting forced marriage.
Topic:: Security, Armed Forces, Women, Peace, Armed Conflict, and Forced Marriage
Political Geography:: Global Focus

1871. Financing Loss and Damage at Scale: Toward a Mosaic Approach

Author:: Michael Franczak
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: The historic decision on loss and damage (L&D) at the 2022 UN Climate Change Conference (COP27) calls for a new fund and funding arrangements focused on addressing L&D. It also tasks a Transitional Committee to prepare recommendations on the new fund and funding arrangements for adoption at the 2023 UN Climate Change Conference (COP28) in Dubai. This decision reflects a recognition that existing funding arrangements are grossly inadequate to address the escalating scale of L&D. Addressing L&D will require both enhancing these existing arrangements and creating a new fund and funding arrangements, forming a mosaic of solutions across countries, institutions, and markets. This paper aims to aid the Transitional Committee and other stakeholders by providing an initial sketch of that mosaic. First, it examines existing arrangements, modalities, and sources of funding for addressing L&D from UN humanitarian agencies, multilateral development banks and international financial institutions, and insurance and bond markets. Second, it proposes reforms to existing arrangements that would address key finance gaps and bottlenecks. Third, it identifies elements of a new L&D fund that would complement existing arrangements and make use of innovative finance (including levies and bond issuances) to operate at scale. With roughly six months left until COP28, the Transitional Committee will need to work efficiently to achieve its mandate, which includes determining the fund’s institutional arrangements, modalities, structure, governance, sources of funding, and coordination and complementarity with existing funding arrangements. To this end, the paper recommends that it should: Begin securing financing before COP28, particularly innovative financing, which takes longer to secure than traditional donor contributions; Consult with the private sector to determine its role, including in the use of insurance mechanisms and risk pools, frontloading, and connections between L&D and jobs; Determine the form and role of triggers, including for slow-onset events; Consider how to address noneconomic losses, including displacement and forced migration; and Identify the actions, mechanisms, and institutions required to operationalize the fund, including an internal or external coordination mechanism.
Topic:: Climate Change, Development, United Nations, and Finance
Political Geography:: Global Focus

1872. The UN’s Response to the COVID-19 Infodemic

Author:: Gabriel Delsol and Albert Trithart
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: International Peace Institute
Abstract:: The COVID-19 pandemic has been accompanied by a related “infodemic.” This infodemic emerged as widespread demand for information about the public health emergency was met with large volumes of false and misleading information. Many of the national and international institutions leading the response to the COVID-19 pandemic, including the UN, quickly recognized that they also needed to respond to the infodemic. This led to a quick, broad-based response by a broad array of UN agencies and partners. To date, however, there has been no systematic mapping or assessment of the range of initiatives across the UN system. To begin filling that gap, this paper provides an overview of the UN system’s response to the COVID-19 infodemic across four areas: monitoring harmful information related to COVID-19; dispelling false information and providing authoritative information; building information resilience; and setting the agenda. It then assesses some of the successes and challenges of the response across four areas: external partnerships, including with governments, civil society, academia, and social media companies; coordination within the UN system; financial, human, and technological capacity; and impact assessment. The report concludes that the UN’s infodemic response finds itself at a pivotal point: Due to donor fatigue around COVID-19, funding for the infodemic response is falling even while the need for a robust infrastructure to address infodemics and other information disorders may be increasing. UN entities working to address the infodemic and other information disorders should therefore consider the following: Engaging in a consultative process to develop a shared understanding of the infodemic by defining its specific harms in relation to each of their mandates; Sustaining and building capacity to counter infodemics and other information disorders, both in communications departments and in other sections working on infodemic management; Adopting a more standardized, system-wide approach to the use of new technologies and engagement with technology platforms; and Continuing to strengthen long-term information resilience by building the capacity of governments to manage infodemics and supporting strong, independent media.
Topic:: Health, Science and Technology, United Nations, and COVID-19
Political Geography:: Global Focus

1873. Multipolarity After Ukraine: Old Wine in New Bottles?

Author:: Aldo Ferrari and Eleonora Tafuro Ambrosetti
Publication Date:: 02-2023
Content Type:: Special Report
Institution:: Italian Institute for International Political Studies (ISPI)
Abstract:: One year after the full-scale invasion of Ukraine, the war has exacerbated the rift between Russia and the “collective West”. While Western governments have been steadfast in punishing Russia for the invasion, other countries around the world have been more ambiguous, at times even choosing to side with Moscow politically or economically. These dynamics have revived the idea of a shift towards multipolarity along an anti-Western trajectory. Are we really heading in that direction? Are we facing increasing fragmentation due to the war or a re-consolidation of longstanding alliances? What principles underlie the formation of these blocs? What are the consequences of these dynamics for global security and the global economy? This Report aims to shed light on these questions, while also outlining the war’s possible future implications for the Russian Federation, the “West”, and the international order.
Topic:: Security, Governance, Economy, Multipolarity, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Ukraine

1874. Europe and Russia on the Balkan Front. Geopolitics and Diplomacy in the EU’s Backyard

Author:: Giorgio Fruscione
Publication Date:: 03-2023
Content Type:: Special Report
Institution:: Italian Institute for International Political Studies (ISPI)
Abstract:: The war in Ukraine has taken its toll on the stability of the Balkans by reshuffling regional geopolitics and reviving diplomatic competition between the West and Russia. Since the summer of 2022, growing tensions between Kosovo and Serbia have raised concerns about a possible Russian involvement and pushed the European Union to react promptly. By brokering a new normalisation agreement, the West seeks to prevent new hotbeds in Europe and push Russia one step back from the Balkans. Meanwhile, the Russian invasion of Ukraine has given new momentum to the integration process of candidate states, making EU membership a tangible goal rather than an unattainable dream. Will the EU be able to stabilise the Balkans? Will Russia continue to exert its influence in the region? Are Belgrade and Pristina on the eve of a new phase in the normalisation process?
Topic:: Diplomacy, European Union, Geopolitics, Political stability, and Russia-Ukraine War
Political Geography:: Russia, Europe, and Balkans

1875. The EU Indo-Pacific Bid: Sailing Through Economic and Security Competition

Author:: Filippo Fasulo
Publication Date:: 04-2023
Content Type:: Special Report
Institution:: Italian Institute for International Political Studies (ISPI)
Abstract:: Over the past five years, the Indo-Pacific region's importance for Europe has grown significantly. However, the launch of the EU Strategy for cooperation in the Indo-Pacific in September 2021 and its subsequent implementation have been affected by growing polarisation between the US and China, and by a fast-changing scenario caused by the Russian invasion of Ukraine. This Report examines the state and perspectives of the EU's Indo-Pacific strategy, 18 months after its launch. Are there avenues for cooperation with regional military initiatives, such as the QUAD? How is the economic landscape changing, in particular after the start of negotiations for the Indo-Pacific Economic Framework for Prosperity (IPEF)? What are the main strategies of Indo-Pacific countries for the green transition? And how do the US, China, and ASEAN countries view and act in the Indo-Pacific region?
Topic:: Security, International Cooperation, Economy, Strategic Competition, and Russia-Ukraine War
Political Geography:: Europe, United States of America, and Indo-Pacific

1876. Enhancing Resilience in a Chaotic World: The Role of Infrastructure

Author:: Carlo Secchi and Alessandro Gili
Publication Date:: 06-2023
Content Type:: Special Report
Institution:: Italian Institute for International Political Studies (ISPI)
Abstract:: Global infrastructure is at a crossroads. Sustainability and climate-resilience imperatives, new geopolitical headwinds, technology and connectivity issues, as well as the ongoing reconfiguration of global value chains, all call for a rethink in how infrastructure is designed, built and maintained. Leading world economic powers are envisaging new infrastructure plans that could fit in new trade and industrial strategies, with the ultimate goal to increase sustainability, economic competitiveness and resilience. Meanwhile, the use of digital technologies entails new risks for the security of critical infrastructure. How are global value chains changing, and how does this affect infrastructure? How could more resilient infrastructure transform economies? How to enhance the quality and sustainability of new and existing infrastructure? And how to safeguard security in critical infrastructure?
Topic:: Climate Change, Infrastructure, Economy, Sustainability, and Resilience
Political Geography:: Global Focus

1877. Section 232 reloaded: the false promise of the transatlantic ‘climate club’ for steel and aluminium

Author:: David Kleimann
Publication Date:: 07-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: In using the removal of Section 232 ‘national security’ tariffs on steel and aluminium imports as a bargaining chip, the United States demands that the European Union engage in negotiations on “global steel and aluminium arrangements to restore market-oriented conditions and address carbon intensity”. The US demand has reportedly been inspired by a blueprint that would establish an international institutional arrangement – labelled a ‘climate club’ – which would externalise market-access restrictions afforded by US Section 232 tariffs to the customs borders of club members. While the declared objective is to incentivise non-members to adopt low-carbon steel (and aluminium) production methods the US blueprint suffers from various design flaws including inefficient incentives, WTO inconsistency and incompatibility with the EU Carbon Border Adjustment Mechanism. The effectiveness of the proposed US scheme is severely compromised by the plethora of policy objectives it pursues, which go far beyond the goal of incentivising industrial decarbonisation in third countries, including secondary (ie protectionism) and tertiary (ie global power competition with China) objectives. The initial negotiation proposal submitted by the United States Trade Representative (USTR) to European Commission trade negotiators incorporates many if not all the problematic elements of this blueprint, setting the US on a collision course with the negotiation proposal put forward by the European Commission. This paper concludes that the adoption of the scheme proposed by USTR would result in a step backwards for international climate and trade cooperation, whereas not adopting the EU proposal would make for a missed opportunity. Given the sharply diverging negotiation positions and associated respective domestic constraints on both sides, however, policymakers should start to engage stakeholders now to manage expectations towards a low-ambition negotiation result, if any.
Topic:: Security, Climate Change, Industrial Policy, Governance, European Union, Economy, Trade Policy, and Transatlantic Relations
Political Geography:: Global Focus

1878. What should be done about Google’s quasi-monopoly in search? Mandatory data sharing versus AI-driven technological competition

Author:: Bertin Martens
Publication Date:: 07-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The first part of this paper focuses on competition between search engines that match user queries with webpages. User welfare, as measured by click-through rates on top-ranked pages, increases when network effects attract more users and generate economies of scale in data aggregation. However, network effects trigger welfare concerns when a search engine reaches a dominant market position. The EU Digital Markets Act (DMA) imposes asymmetric data sharing obligations on very large search engines to facilitate competition from smaller competitors. We conclude from the available empirical literature on search-engine efficiency that asymmetric data sharing may increase competition but may also reduce scale and user welfare, depending on the slope of the search-data learning curve. We propose policy recommendations to reduce tension between competition and welfare, including (a) symmetric data sharing between all search engines irrespective of size, and (b) facilitate user real-time search history and profile-data portability to competing search engines. The second part of the paper focuses on the impact of recent generative AI models, such as Large Language Models (LLMs), chatbots and answer engines, on competition in search markets. LLMs are pre-trained on very large text datasets, prior to usage. They do not depend on user-driven network effects. That avoids winner-takes-all markets. However, high fixed algorithmic learning costs and input markets bottlenecks (webpage indexes, copyright-protected data and hyperscale cloud infrastructure) make entry more difficult. LLMs produce semantic responses (rather than web pages) in response to a query. That reduces cognitive processing costs for users but may also increase ex-post uncertainty about the quality of the output. User responses to this trade-off will determine the degree of substitution or complementarity between search and chatbots. We conclude that, under certain conditions, a competitive chatbot markets could crowd out a monopolistic search engine market and may make DMA-style regulatory intervention in search engines redundant.
Topic:: Science and Technology, Governance, European Union, Digital Economy, Innovation, Artificial Intelligence, and Competition
Political Geography:: Europe

1879. What would Europeans want a European defence union to look like?

Author:: Francesco Nicoli, Brian Burgoon, and David Van der Duin
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: While the Russian invasion of Ukraine has created a new momentum for EU defence integration, the political feasibility of such integration remains disputed, as it may entail both additional financial costs and a loss of sovereignty. Furthermore, design of defence integration is inherently multidimensional, differing in terms of scope and level, governance and sources of financing, among other dimensions. To determine the extent of public support for European security cooperation, we conducted the first conjoint experiment ever fielded on public support for alternative defence union designs. We carried out a pre-registered, randomised conjoint experiment on a highly representative sample of the French, German, Italian, Dutch and Spanish populations in November 2022. This multidimensional conjoint experiment allows us to determine the causal link between policy features of potential defence pacts, and public support or opposition to such policy. Our results show that policy packages receiving the most support require joint EU-level governance, joint purchases of military equipment through joint procurement, and repurposing of existing national expenditure as the preferred form of financing. All in all, our results show not only that there is considerable cross-border support for defence integration in Western Europe, but also that citizens in different Western European countries have generally aligned preferences regarding the actual design of such policy, indicating that a compromise policy is feasible and publicly supported. Furthermore, our results support ongoing research on the nature of European solidarity at times of crisis, suggesting that European citizens are willing to support the creation of joint institutions and policies to face issues of common concern, and therefore indicating that major crises open important windows of opportunity to re-shape EU-level policies and institutions.
Topic:: Defense Policy, Governance, European Union, and Regional Security
Political Geography:: Europe

1880. China’s quest for innovation: progress and bottlenecks

Author:: Alicia Garcia-Herrero and Robin Schindowski
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: As the Chinese economy continues to decelerate, the central government is investing heavily in innovation, doubling down on research and development (R&D) spending and STEM-oriented human capital. In this paper, we assess China’s progress so far, looking at the inputs to innovation (R&D and human capital) as well as intermediate targets, such as scientific research and patents. We then evaluate how China has fared with respect to the ultimate goal of commercialising this progress, by looking at the value-added of Chinese exports and the overall productivity of the economy. We identify three potential bottlenecks that might be hindering the translation of China’s innovation efforts into productivity growth.
Topic:: Industrial Policy, European Union, Economic Growth, Innovation, and COVID-19
Political Geography:: China, Europe, and Asia

1881. Antitrust issues raised by answer engines

Author:: Christophe Carugati
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Rapid development of generative artificial intelligence chatbots like ChatGPT is leading search engine providers to move from search to answer engines. Unlike search engines, which provide search results in the form of blue links to content creators, answer engines generate personalised answers through a conversation with end users. This revolution impacts the internet ecosystem of content creators and the digital advertising market. This paper outlines some early antitrust issues related to answer engines, from the transition from search to answer engines (sections 2 and 3) and the response competition authorities should adopt (section 4). It finds that search and answer engines complement and compete with each other. While the answer-engine market is still at an early stage of development, it already raises some competition issues in relation to data scraping, vertical integration and unfair terms and conditions. Intervention by competition authorities is more likely than not to prevent market power in this new market. In this regard, competition authorities should act to preserve dynamic competition and minimise adverse effects on content creators. Finally, the paper concludes with several research questions for future research (section 5).
Topic:: Science and Technology, Governance, European Union, Digital Economy, Innovation, Artificial Intelligence, and Competition
Political Geography:: Europe

1882. A new measure of aggregate trade restrictions: cyclical drivers and macro effects

Author:: Julia Estefania-Flores, Davide Furceri, Swarnali A. Hannan, Jonathan Ostry, and Andrew K. Rose
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: This paper presents a new measure of aggregate trade restrictions (MATR) using data from the International Monetary Fund’s Annual Report on Exchange Arrangements and Exchange Restrictions. MATR is strongly correlated with existing measures of trade restrictiveness but is more comprehensive in terms of country and time coverage. It is available for an unbalanced sample of up to 157 countries during 1949-2019. We use MATR to re-examine how trade restrictiveness varies with the business cycle, and how the macroeconomy looks in the aftermath of changes in trade restrictiveness. For the sample as a whole, MATR is typically a-cyclical but this average finding is heterogeneous across income groups: aggregate trade restrictions are a-cyclical in advanced economies but are counter-cyclical in emerging market and developing economies, especially in response to increases in unemployment. As to macroeconomic effects, increases in MATR are robustly associated with declines in GDP and in labour productivity (as well as being adverse for a range of other macroeconomic indicators).
Topic:: Industrial Policy, Economy, Multilateralism, and Trade Policy
Political Geography:: Global Focus

1883. Employer perspectives on employee work location: collaboration, culture and control

Author:: Diane Mulcahy and Tatiana Andreeva
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: This paper discusses employers’ experience of working fully remotely during the pandemic, and their approaches to returning to the office following the pandemic. We chose to focus on the point of view of the employer since it is relatively less explored; much more is available and written on the views and opinions of employees about remote work and return to office. To understand the employer’s perspective, we reviewed existing research evidence, and carried out eleven structured interviews with corporate leaders about their experiences with remote, in-office and hybrid work. Our literature review suggests that remote work does not have negative effects on performance. Similarly, the small sample of employers we interviewed experienced very strong company and employee performance while operating their businesses fully remotely. All employers we interviewed are implementing a hybrid return-to-office policy, although the specifics of the policies are different for each company. No employer was returning to full in-office work. We focused our literature review and interviews on the impact of remote work on employee collaboration, firm culture and manager control, which we call ‘the 3 Cs’. We found that leaders maintain a belief that employee collaboration is negatively impacted by remote work, but the evidence to support this assumption is mixed. Firm culture is often cited by employers as an important rationale for bringing employees back to the office, but the research evidence and our interviewees suggest that the notion of culture is vague and the idea that better culture is supported by in-office work is not supported by any data. Finally, the shift to remote work caused corporate leaders and front-line managers to worry about effectively managing employees they couldn’t see every day. We found that companies did not widely begin implementing employee monitoring systems in lieu of onsite management. Our interviews suggest that much learning remains to transition managers and leaders to effectively managing remote or hybrid employees and teams.
Topic:: Science and Technology, Employment, Innovation, Labor Market, and Remote Work
Political Geography:: Global Focus

1884. Global trends in countries‘ perceptions of the Belt and Road Initiative

Author:: Alicia Garcia-Herrero and Robin Schindowski
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Drawing on global media reports, we conduct a sentiment analysis of the image of China’s Belt and Road Initiative (BRI) and the evolution of its image over time. Our main finding is that perceptions of the initiative deteriorated significantly in many geographies from 2017 to 2022. The notable exception is in sub-Saharan Africa where the BRI’s image remains positive, even if slightly less so than in the past. This is notwithstanding increases in debt levels with China, much of which now face potential restructuring. Furthermore, we find significant inter- and intra-regional differences in the average sentiment towards China’s landmark project, as well as a much worse image of the initiative in countries which, until today, are not part of the BRI. Finally, we focus on the European Union, Africa and China’s immediate neighbourhood to better understand the complexities behind the perceived benefits and challenges associated with China’s Belt and Road Initiative.
Topic:: Bilateral Relations, European Union, Geopolitics, Economy, and Trade
Political Geography:: China, Europe, and Asia

1885. Artificial intelligence adoption in the public sector: a case study

Author:: Laura Nurski
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: This case study illustrates the drivers of and barriers to artificial intelligence adoption by organisations, and acceptance of AI by workers in the public sector. Several factors were crucial in the successful adoption of a human-centred approach to AI, including a fast discovery phase that involved workers (or end users) in the development early on, and aligning human resources, information technology and business processes. Subsidy support mechanisms were also specifically targeted and acquired to support the adoption. However, making AI support available to workers proved insufficient to ensure its widespread usage throughout the organisation. The slow adaptation of existing work processes and legacy IT systems was a barrier to the optimal usage of the technology. Moreover, the usefulness of the technology depended on both the task routineness and worker experience, thereby necessitating a rethinking of the work division between technology and workers, and between junior and senior workers. Successful human-centred roll-out of AI in Europe will therefore depend on the availability of, or investments in, complementary intangible organisational capital. Very little is currently known about these investments.
Topic:: Digital Economy, Economic Growth, Public Sector, Innovation, Artificial Intelligence, Inclusion, and Work
Political Geography:: Global Focus

1886. The hidden inequalities of digitalisation in the post-pandemic context

Author:: Cristiano Cadagnone and Maria Savona
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Digitalisation has a ‘hidden’ impact on employment, particularly on the invisible conditions of some jobs, as perceived by workers, that are relatively less explored in the literature and that could represent a substantial social cost, particularly in the aftermath of the financial crisis and the COVID-19 pandemic. We start by summarising a few main challenges of digitalisation, with a focus on the additional challenges brought about by the pandemic, the rise of platforms and alternative work arrangements, and the current attempts to regulate these. We then discuss the hidden aspects of inequality linked to the unmeasured side effects of digitalisation. Mental health in particular should be taken into account, particularly in the post-pandemic context, which has led to a significant amount of working from home. Also, the reduction of tasks previously done in the workplace in favour of remote working might limit social interactions, creativity and innovation potential. We conclude by suggesting areas for policy interventions.
Topic:: Labor Issues, Economy, Automation, and COVID-19
Political Geography:: Europe and Global Focus

1887. Pro- and anti-competitive provisions in the proposed European Union Data Act

Author:: Bertin Martens
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The proposed European Union Data Act gives users access and portability rights to the data generated by their use of tangible digital products and devices. This pro-competitive measure weakens the de-facto monopolistic control product manufacturers have over product data. However, the Data Act would also grant manufacturers a de-jure right to monopolistic pricing of data transfers to third-party service providers, restoring their control over data markets. Other anti-competitive provisions include restrictions on the use of data for competition purposes and a prohibition on transfering data to platforms identified as gatekeepers under the EU Digital Markets Act. Unnecessarily fuzzy definitions of products and data that fall under the Data Act would create uncertainty in implementation and incoherence with other EU data regulations. The Data Act should be simplified by dropping anti-competitive provisions and granting users and third-parties selected by users free access to all data generated by the use of a product or a service. This would increase competition in data-driven services and prevent users paying twice for their data. It would not disincentivise producers from investing in data-driven products and services. A further step could be the creation of a level playing field between producers and users in data-access rights. This can be achieved by introducing the principle of mutual exhaustion of data rights at point of sale. This would put all data co-generating parties in a position to generate economies of scale and scope in data aggregation, or data-driven externalities, to maximise innovation.
Topic:: Markets, Governance, European Union, and Digital Economy
Political Geography:: Europe

1888. The EU can manage without Russian liquified natural gas

Author:: Ben McWilliams, Giovanni Sgaravatti, Simone Tagliapietra, and Georg Zachmann
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The European Union has committed to eliminate all Russian fossil-fuel imports by 2027. Progress has been made, with sanctions on oil and coal already introduced. The glaring exception is natural gas, on which the EU has so far refrained from imposing limitations, owing to greater dependence on Russia. Nevertheless, pipeline gas imports have fallen by four-fifths following Russia’s weaponisation of gas supplies. However, Russia’s exports of liquified natural gas (LNG) to the EU have increased since the invasion of Ukraine. The EU needs a coherent strategy for these LNG imports. Our analysis shows that the EU can manage without Russian LNG. Anticipated impacts are not comparable to those felt in 2022 as Russian pipeline gas dried up. The regional impact would be most significant for the Iberian Peninsula, which has the highest share of Russian LNG in total gas supply. Meanwhile, the global LNG market is tight, and we anticipate that Russia would find new buyers for cargos that no longer enter Europe. We discuss the options available to the EU. Wait-and-see implies delaying any action until 2027, while soft sanctions would discourage additional purchases but not break long-term contracts. We argue instead for an EU embargo on Russian LNG, to reduce exposure to an unreliable and adversarial entity, and to limit the extent to which EU consumers fund the Russian state. The embargo may be designed to allow purchases only if they are coordinated via the EU’s Energy Platform, with limited volumes and below market prices. This could be accompanied by the implementation of a price cap on Russian LNG cargos that use EU or G7 trans-shipment, insurance or shipping services.
Topic:: European Union, Gas, Energy, and Green Economy
Political Geography:: Russia and Europe

1889. Rebooting the European Union’s Net Zero Industry Act

Author:: Simone Tagliapietra, Reinhilde Veugelers, and Jeromin Zettelmeyer
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: In March 2023, the European Commission published a legislative proposal for an EU response to the US Inflation Reduction Act: the Net Zero Industry Act (NZIA). It is an unconvincing policy proposal, both for what is in it and for what is not in it. The proposal has five problematic aspects. First, it takes a top-down approach, in which specific technologies are selected for preferential treatment. Preferable would be a technology-neutral approach open to all current and future technologies that help tackle the net-zero challenge. Second, its blanket 40 percent self-sufficiency benchmark for EU domestic cleantech manufacturing by 2030 sends a protectionist signal, is poorly defined and does not reflect the differences in EU capacity in the cleantech sector. Third, it relies on the acceleration of permitting procedures as the main policy instrument, although this is not the main obstacle to cleantech investment in the EU. Fourth, it proposes more strategic use of public procurement. While this is an objective to be supported, the specific proposals are likely to be ineffective because of the way they are designed. Fifth and not least, the NZIA would lack a governance structure that would ensure effective implementation. In addition, the NZIA does not tackle three critical issues. It does not address investment obstacles related to failures of the single market. It does not tackle the coordination problem at the core of developing an EU green industrial policy. Finally, it does not develop an EU-level funding strategy, but rather relies on state aid, with the related risk of fragmentation. The European Parliament and EU countries in the Council of the EU should reboot the proposal and refocus its objectives, sharpening its limited instruments, improving its governance, and adding financial incentives to ensure implementation. In parallel, the EU should develop a broader green industrial policy strategy that leverages the single market in a credible manner, building a solid new governance framework and a new EU-level funding approach.
Topic:: Climate Change, Industrial Policy, Governance, European Union, Trade Policy, and Industry
Political Geography:: Europe

1890. Can Chinese growth defy gravity?

Author:: Alicia Garcia-Herrero
Publication Date:: 06-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Chinese growth, astounding since the beginning of the reform era, has slowed in the last decade. We offer a baseline estimate (based on the current trend) of China’s medium-term growth rate, which we project to fall to 2.4 percent by 2035. Several factors create uncertainty around this baseline. China’s rapid aging is already incorporated into our long-term growth scenario, but its impact on growth will depend on how China’s remaining urbanisation process spreads over time, how the shrinking labour supply affects labour productivity and whether the decline in total factor productivity growth, reflecting the lack of reform during the last decade and possibly the rising role of the state, can be reversed. Investment in China, for decades the largest factor in China’s growth, is expected to contribute less to growth given the increasingly low return on assets, particularly on state-led investment. The rapid piling up of public debt is also becoming a heavy burden for the Chinese economy. Finally, the COVID-19 pandemic may have left significant scarring effects, such as structurally high youth unemployment and low investment confidence. On the upside for China, the rise in human capital and research and development expenditure may support innovation and growth, but the magnitude of this effect is uncertain, because it is unclear if higher innovation will translate into higher total factor productivity, and because of the United States’s push to contain China technologically.
Topic:: Industrial Policy, European Union, Economic Growth, and COVID-19
Political Geography:: China, Europe, and Asia

1891. The value added of central bank digital currencies: a view from the euro area

Author:: Maria Demertzis and Catarina Martins
Publication Date:: 06-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Different jurisdictions have set out different reasons for creating central bank digital currencies (CBDCs). Some countries, particularly those with already-operational CBDCs for retail purposes, aim to to promote financial inclusion. But in countries where most citizens have access to financial services, central banks are interested in CBDCs as an aspect of the increasing digitalisation of finance. Central banks could also choose to use CBDCs to guarantee in full citizen’s holdings (currently, deposits in commercial bank are only partially guaranteed), but this would trigger major changes in the financial system in terms of the role of commercial banks in intermediation and the role of fiat money. So far, central banks have not opted to go this way. In the euro area, consumers have multiple payment options and a very efficient retail payments system. The currency enjoys high levels of trust and is not challenged by the emergence of private currencies, such as Bitcoin, or by the risk that cash, a monetary system’s anchor, will disappear. Therefore, creating a CBDC for retail purposes in the euro area offers little obvious value added, at least for the foreseeable future. However, there is a strong case for building a CBDC that banks could use for cross-border wholesale purposes (ie with other currencies). Wholesale CBDCs could revolutionise the way that cross-border, cross-currency payments are made for two reasons. Cross-border payments are currently slow and inefficient. Pilot projects have shown that wholesale payments with CBDCs can generate substantial time and cost savings. Any two central banks that have operational wholesale CBDCs could settle transactions between themselves. This would be very different from the current system, as most settlements today are done via the dollar (and then the euro) infrastructure and use correspondent banks. The euro area and the United States would have to consider carefully from a geopolitical perspective how wholesale CBDCs might affect their global economic standing. By developing a CBDC for wholesale purposes, the European Union would be able to contribute to developing the global standard.
Topic:: Monetary Policy, Governance, Regulation, Central Bank, Digital Currency, and Euro
Political Geography:: Europe

1892. The rising cost of European Union borrowing and what to do about it

Author:: Gregory Claeys and Conor McCaffrey
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: Debt issuance by the European Commission on behalf of the European Union has increased massively. Of the approximately €400 billion in outstanding EU debt as of May 2023, 85 percent has arisen from borrowing since 2020. Large-scale borrowing is expected to continue until 2026 to fund the remainder of NextGenerationEU, and concessional loans to support Ukraine. When these programmes were launched, interest rates were at historic lows – even negative for maturities below 10 years. However, interest rates rose sharply in 2022. Beyond the widespread rise in euro-denominated interest rates due to monetary tightening by the European Central Bank in response to the inflation surge, the EU has also faced a widening of the spread between its yields and those of major European issuers, including France and Germany. This widening is driven by a combination of market features, circumstantial factors and institutional features. The EU cannot affect the overall cyclical movement of interest rates and will have to learn to live with it, like sovereigns do. However, the European Commission should continue to try to narrow the spread with major European sovereigns by further developing the relevant market infrastructure and improving its issuance strategy. The Commission will not be able to do this alone. Institutional developments, including progress on the development of new own resources and a long-term substantial presence in the bond market, will be necessary to fully reap the benefits of EU borrowing. A large share of EU borrowing (around €421 billion in total by the end of 2026, in current prices) is intended to finance unprecedented non-repayable support: Recovery and Resilience Fund grants and additional funding for existing EU programmes under the EU budget. The interest costs associated with this part of the debt lie with the EU budget. Our estimates suggest that, because of the high current and expected levels of interest rates, this cost could be twice as high as what was initially estimated at the start of the EU’s 2021-27 budget cycle. As a result, because interest costs for the borrowing of the non-repayable support are accounted for under the EU budget’s ‘expenditure ceiling’, this will exert further pressure on the funding of important EU programmes, which are already affected by inflation. The EU should thus quickly review how interest costs are accounted for in its budget and financial framework.
Topic:: Debt, Budget, European Union, and European Commission
Political Geography:: Europe

1893. Adjusting to the energy shock: the right policies for European industry

Author:: Giovanni Sgaravatti, Simone Tagliapietra, and Georg Zachmann
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: In 2022, overall European Union industrial employment and output increased above 2021 levels, despite rocketing energy prices. However, output declined from energy-intensive industries including basic metals, chemicals, non-metallic minerals and paper, for which energy costs represent a much bigger share of production costs than for less energy-intensive manufacturing. Energy prices are likely to remain above historic levels for the foreseeable future. In its industrial strategy response to this context, the EU must ask first whether the energy-intensive parts of the value chain should be outsourced permanently. Conditional on the answer being no, the second question is how to reduce energy prices to ensure the competitiveness of the energy-intensive productions stages that remain in the EU. First, the EU could bridge the high energy price period with unconditional subsidies, which seems to be the preferred strategy currently. This will avoid irreversible large-scale relocation abroad but is expensive, does not help to drive down energy prices and poses risks of fragmentation within the EU. It will only succeed if internationally competitive energy supplies are made available quickly. Second, the EU could support decarbonised production processes built on large-scale deployment of domestic renewables, grid interconnectors and storage. This would accelerate the green transition and reduce clean-tech prices worldwide. However, EU taxpayers would bear the cost of new technologies, without any guarantee of solving the current cost-competitiveness issue. Third, the EU could facilitate imports of energy-intensive products, while helping EU industry move to higher value-added parts of the value chain. Subsidies could be given directly to industrial sectors that have not become structurally uncompetitive, while bringing down energy demand and thus energy prices. However, this strategy would result in temporarily higher unemployment and factory closures in energy-intensive industries, would need to accommodate concerns over excessive reliance on imports and would need to be engineered to address carbon leakage. Policymakers should implement a mix of these policies. The EU should subsidise existing energy-intensive industries only in clearly justified cases, while deciding which energy-intensive products can be left to international market forces. By choosing which decarbonisation investments should be supported in Europe, the EU can combine industrial competitiveness and environmental sustainability.
Topic:: Industrial Policy, European Union, Value Chains, Energy, and Green Economy
Political Geography:: Europe

1894. The longer-term fiscal challenges facing the European Union

Author:: Jeromin Zettelmeyer, Gregory Claeys, Zsolt Darvas, Lennard Welslau, and Stavros Zenios
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The pandemic and subsequent price shocks triggered by Russia’s invasion of Ukraine, have increased longer-term fiscal pressures in the European Union through higher debt, higher expected real interest rates and higher public investment needs. This Policy Brief makes some simple quantitative assessments of those effects and discusses policy implications, with the following results. First, long-term increases in primary fiscal balances required to offset higher debt and higher expected real interest rates are in the range of 0.5 percent to 1.5 percent of GDP for most EU countries. However, because of pre-existing differences in fiscal space, not all countries will need to undertake that adjustment, while some countries may need to adjust by substantially more. Among the 21 EU countries for which we have data to undertake this analysis, 14 will need to adjust by more than they were planning to do by 2025. Second, the required additional fiscal adjustment looks manageable, although it is substantial in some cases. To achieve medium-term debt-reducing primary balances, several EU countries will need to raise primary balances by more than 2 percent of GDP above their 2025 target, but no country will need additional fiscal adjustment of more than 3 percent of GDP. Third, market data suggests that the future path of real interest rates is very uncertain. Compared to the period immediately preceding the pandemic, longer-term expected real interest rates have increased by about 2 percentage points but remain low on average, at about 1 percent in real terms. Future developments depend on whether the structural factors that led to low interest rates in the first place persist or unwind. While interest rates might decline again, fiscal policymakers should not make plans that assume such a decline. Fourth, public spending needs for additional defence and climate spending run well above 1 percent of GDP per year. These needs do not appear to have been incorporated into current fiscal baselines, and hence will come on top of the adjustment described above. To ensure that fiscal adjustment does not defeat its purpose by slowing growth, it is essential that it is conducted gradually. In countries that require such adjustment, it should start as soon as cyclical conditions allow.
Topic:: Governance, European Union, Finance, and Fiscal Policy
Political Geography:: Europe

1895. Decentralised finance: good technology, bad finance

Author:: Maria Demertzis and Catarina Martins
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: The emergence of cryptocurrencies/crypto assets has allowed the provision of a new form of financial services, including payments and loans, known as decentralised finance (DeFi). Crypto assets currently represent only about 1 percent of total global financial assets and it is unlikely, in its current form, that DeFi will become a substitute for the traditional financial system, for three reasons. First, while decentralisation is very innovative, in practice the technology required to replace the role of intermediary is slow and costly in terms of energy use. This has led some crypto networks to adopt more centralised solutions to the problem of verification. Second, the automaticity behind the transactions does not allow for any legal recourse. If something goes wrong, there is no way to stop or reverse a transaction once it has been initiated. It is very difficult to imagine DeFi scaling up without the ability to challenge outcomes. Third, and perhaps most importantly, DeFi is for the most part self-referential. Crypto assets are exchanged for other crypto assets without being employed in activities that stimulate economic growth by creating jobs or facilitating investment. It is not likely for DeFi to grow enough to replace traditional finance unless it helps growth. Nevertheless, the technology that enables DeFi and crypto assets, distributed ledger technology (DLT), is very innovative and has managed to remove the intermediary without compromising the safety and finality of financial transactions. Hence, it is likely that the technology behind crypto assets and DeFi will feed into the mainstream and offer efficiency gains.
Topic:: Science and Technology, Regulation, Finance, Digitalization, and Digital Currency
Political Geography:: Global Focus

1896. Will China’s new financial regulatory reform be enough to meet the challenges?

Author:: Martin Chorzempa and Nicolas Veron
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Effective financial supervision plays a crucial role in maintaining financial stability and a healthy financial system. China’s leadership has made financial risk a core priority, and in reforms approved in March 2023, it reassigned regulatory responsibilities, creating a new supervisory body that will take over some responsibilities from the central bank, the banking and insurance regulator, and the securities regulator. The aim is that a change to the financial supervisory architecture (who does what in financial supervision) will make China’s system more effective and stable. In this policy brief, we argue that this incremental reform will not solve the core issues China faces in financial supervisory effectiveness. We provide an overview of China’s large and complex financial system, including its largely state-owned banks (some of which are the largest in the world by assets), securities markets and other financial intermediaries. Traditional divisions between different types of activities and institutions have been blurred by the rise of large financial conglomerates, risk-transfer techniques and internet-based finance. Reforms in 2018 to China’s supervisory architecture did not eliminate perceived shortcomings, including failures to effectively regulate financial conglomerates, fintech and regional banks. We then survey global benchmarks against which China’s financial supervisory architecture can be compared, including the United States and European Union. China’s supervisory system is already more streamlined, at least on paper, than either of these most comparable global counterparts. Like them, China’s system does not correspond exactly to any of the three textbook archetypes of supervision: sectoral, twin-peaks or integrated supervision. Ultimately, the effectiveness of China’s financial supervisory architecture suffers from excessive state intervention in the financial system through other channels, including through the unique and pervasive influence of the communist party, which hampers supervisory independence and makes it difficult to establish accountability for regulatory failures. While the recently announced reform may improve coordination across supervisory bodies, coordination within the new quasi-integrated supervisor, across central departments, and between them and local branches, will remain a challenge.
Topic:: Reform, Regulation, Finance, and Financial Stability
Political Geography:: China and Asia

1897. The potential of sovereign sustainability-linked bonds in the drive for net-zero

Author:: Alexander Lehmann and Catarina Martins
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: European Union governments have for some years issued green bonds that raise funds for climate-related spending. These bonds have been received well in capital markets but because they promise a certain use of proceeds, they complicate budget management and may not match investors’ claims of having an impact on national climate policies. Public commitments made by major investors and asset owners suggest that limiting climate transition risks and the assessment of the alignment of sovereigns with net-zero targets will now become key determinants of portfolio allocation. Yield differentials in bond markets are already beginning to reflect transition risks that arise from the inadequate pursuit by issuers of climate targets. Unlike standard green bonds, sustainability-linked bonds (SLBs) create a link between performance (outcome) indicators and the financial terms of the bonds. SLBs have grown rapidly in importance in private markets and are now being assessed by sovereign issuers. We show that sovereign SLBs could help incentivise climate policies in EU countries, and accelerate emission reductions. They would be an effective tool for signalling commitment. A common EU framework for issuance by EU countries would enhance capital market integration and the transparency of national policies, and would limit climate transition risks in EU capital markets more broadly.
Topic:: Climate Change, European Union, Finance, Carbon Emissions, and Sovereign Bonds
Political Geography:: Europe

1898. Phased European Union electricity market reform

Author:: Georg Zachmann and Conall Heussaff
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: In an environment of record-breaking electricity prices driven by a gas supply shock and below-average electricity generation, reforming the design of the European electricity market is seen as a means to delink consumer costs from volatility in short-term power markets. Electricity markets should meet three objectives: fairness, optimal investment and optimal operation. The current market design has achieved these objectives to varying degrees. Faced with the unprecedented shock, the electricity system has operated well, but electricity markets have struggled to achieve fair outcomes and investments have not been driven by market-based cashflows. Further complicating market reform, the power system is being changed radically by decarbonisation. The electricity system is becoming more decentralised and digitalised, with an active demand side. These transformations will have consequences for the optimal electricity market design in the later stages of the energy transition. Reform proposals have focused on increasing the share of long-term contracts in the remuneration of generation technologies. Different long-term contracting regimes have structural implications for the functioning of electricity markets, especially in relation to the roles of the state and the market, and the responsibilities of national governments and European Union institutions. A phased approach should be taken to EU electricity market design reform. In the near-term, reform should seek to protect consumers and drive investment. An assessment should also be made of what market design will best meet the fairness, investment and operational objectives in a decarbonised system, and what the conceptual role of electricity markets should be during the transition. This process should start as soon as possible so well thought-through proposals are available when the next European Commission takes office.
Topic:: Markets, Reform, European Union, Electricity, and Green Economy
Political Geography:: Europe

1899. A model for a participative approach to digital competition regulation

Author:: Christophe Carugati
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Digital competition regulations often put in place participative approaches to ensure competition in digital markets. The participative approach aims to involve regulated firms, stakeholders and regulators in the design of compliance measures. The approach is particularly relevant in complex and fast-evolving digital markets, where whole industries often depend on the behaviours of the regulated firms. The participative approach enables stakeholders and regulated firms to design compliance measures that are optimal for all because they ensure legal certainty for regulated firms, save time for regulators and take into account the views of stakeholders. However, the participative approach is subject to regulatory capture. The regulated firms and stakeholders might try to promote their interests to the regulator. This could result in endless discussions at best, and the adoption of inappropriate solutions following intense lobbying at worst. A governance model is necessary to ensure that the participative approach works without risks of regulatory capture. The model should define clearly each participant's role, duties and rights. There should be: 1) equal and transparent access of all stakeholders to the dialogue; 2) the presentation of tangible and evidence-based solutions from stakeholders and regulated firms; 3) public decisions from the regulator that contain assessments of the proposed solutions, with guidance to clarify rules; and 4) compliance measures proposed by the regulated firm in line with the guidance. The model should provide an assessment framework for the proposed solutions to identify the most effective. The assessment should rely on the principle of proportionality to assess whether the proposed compliance measure is proportionate, to ensure the effectiveness of the regulation. Finally, the model should safeguard against regulatory capture thanks to transparency rules and external monitoring.
Topic:: Regulation, Digital Economy, Innovation, Stakeholders, and Competition
Political Geography:: Global Focus

1900. How Europe should answer the US Inflation Reduction Act

Author:: David Kleimann, Niclas Poitiers, André Sapir, Simone Tagliapietra, Nicolas Veron, Reinhilde Veugelers, and Jeromin Zettelmeyer
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The 2022 United States Inflation Reduction Act (IRA) is a significant and welcome climate law. It also includes trade-distortive subsidies, including local-content requirements prohibited under World Trade Organisation rules – the first time the US has done this and a blow to the international trading system that could trigger protectionism in other countries. The expected IRA green subsidies are of similar size to those available in the European Union, except in renewable energy production, where EU subsidies remain far larger. However, there are important qualitative differences. Some IRA subsidies discriminate against foreign producers while EU subsidies do not. IRA clean-tech subsidies are simpler and less fragmented, and they focus mainly on mass deployment of green technologies rather than innovation. The IRA will likely harm Europe through its competitiveness effect, while it will likely benefit climate transition in Europe and most of the rest of the world. However, the magnitude of both effects is very uncertain, partly because the IRA will induce substitution away from Chinese inputs. By forcing the reorganisation of supply chains, the IRA may make the EU and other economies more competitive relative to China. It may also initially slow the green transition. But in the longer run, this effect should be outweighed by the reduction in the cost of clean tech driven by the IRA. In responding to the IRA, the EU should not just seek to protect its competitiveness relative to the US but to pursue broader aims, including competitiveness in general, speedy decarbonisation and broad foreign policy and development policy goals. These aims imply that the EU should not impose local-content requirements of its own, should not loosen state-aid rules and should not mimic the IRA’s approach to manufacturing subsidies. Rather, it should focus on boosting its structural competitiveness, formulate a trade policy response that includes reform of the international subsidies regime, and develop an instrument for EU-level subsidies that focuses on early-stage development and increasing EU resilience to trade disruptions.
Topic:: Governance, European Union, Inflation, and Trade
Political Geography:: Europe

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COLUMBIA UNIVERSITY PRESS