Topic: Economics - CIAO Search Results

401. The Political Economy of Law Enforcement

Author:: Matías Dewey, Cornelia Woll, and Lucas Ronconi
Publication Date:: 01-2021
Content Type:: Research Paper
Institution:: Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:: The legal order is the legitimate foundation of liberal democracy. Its incomplete enforcement of the law can therefore appear dysfunctional, reflecting weak institutions, state capture, and corrupt practices. This paper casts doubt on such categorical assessments by systematically examining the reasons for and intentions behind incomplete enforcement. It argues that law enforcement is part of the political process that is deeply affected by the constellation of actors concerned. Choices over law enforcement produce social order that is analytically distinct from the production of legal norms and their formal implementation. By analyzing different types of partial enforcement, its rationales, and intended effects, we propose an approach that studies law enforcement as an integral part of public policy analysis and of the study of socioeconomic orders.
Topic:: Economics, International Political Economy, Law Enforcement, Law, Police, and Legal Sector
Political Geography:: Europe and Global Focus

402. Establishing the empirical basis for tracing the development outcomes of agricultural investments

Author:: Helle Munk Ravnborg, Bernard Bashaasha, Rikke Broegaard, Michael Byaruhanga, Evelyne Lazaro, Festo Maro, Khamaldin Mutabazi, Teddy Nakanwagi, and David Tumusiime
Publication Date:: 04-2021
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: This DIIS Working Paper describes the design of a questionnaire survey developed and implemented in order to trace the development outcomes of foreign agricultural investments in six research locations in Tanzania and Uganda. The questionnaire survey was conducted as part of the Agricultural Investors as Development Actors (henceforward AIDA) research programme which, in particular, focuses on development outcomes in terms of employment, migration, food security and wider dynamic economic effects, such as access to technology, infrastructure and markets; land markets and perceived security of land tenure; and water access and security of tenure. The working paper which serves as a methodological reference document describes the approach which was employed for drawing six independent samples of 400 respondents each, as well as the approach developed for computing a foreign agricultural investment exposure index and for computing a locally informed household poverty index.
Topic:: Agriculture, Climate Change, Development, Economics, Emerging Markets, Environment, Poverty, Water, Food, Governance, Inequality, Investment, and Land Rights
Political Geography:: Sub-Saharan Africa and Africa

403. What if …? Economic consequences for Australia of a US-China conflict over Taiwan

Author:: David Uren
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: Australian Strategic Policy Institute (ASPI)
Abstract:: hat if China were to attempt to seize Taiwan by force and the US and allies responded militarily? One consequence would be the disruption of China’s trade with many countries, including Australia. While strategic analysts have been working over such scenarios for years, there’s been little study of the likely economic consequences. This study is focused on the short-term shock to Australia’s economy. The objective is to contribute to an understanding of the nature of Australia’s economic relationship with China and the likely paths of adjustment should that trade be severed. It also explores the options available to the Australian Government to ameliorate the worst of the effects of what would be a severe economic shock. The conclusion of this report is that the disruption to the Australian economy would be significant. There would be widespread loss of employment, along with consumer and business goods shortages that would be likely to necessitate rationing.
Topic:: Foreign Policy, Defense Policy, Economics, National Security, and Conflict
Political Geography:: China, Taiwan, Asia-Pacific, and United States of America

404. Supporting a Public Purpose in Research & Development: The Role of Tax Credits

Author:: Jake Taylor
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: Belfer Center for Science and International Affairs, Harvard University
Abstract:: Tax credits for research and development are a means of incentivizing the private sector to invest their own resources on challenging problems. However, in practice, the fungibility of tax credits and other monetary elements can lead to misalignment between the public good represented by R&D and the actions of the company. In this policy brief, we consider the existing mechanism of tax credits. We see how they can encourage private sector risk-taking to enable research and development (R&D) outcomes. However, our goal is to go beyond economic growth benefits, and to include the less tangible considerations of public good and public purpose in the research and development domain. We then suggest an expansion of tax credits focused on supporting the researchers involved in the R&D and encouraging innovation in both large organizations and in startups and small businesses. This approach builds upon the existing framework of agency-led, mission-defined support of the private sector used by the U.S. government, as occurs in other programs such as America’s Seed Fund (sometimes known by its acronyms, SBIR and STTR). The integration of specific agency- and mission-focused elements to the credit system ensures that these additive credits support research and researchers whose R&D outcomes will improve the health, prosperity, and opportunity for the U.S. as a whole. Specific means of implementing this public-purpose R&D credit system under existing authorities within the executive branch are suggested, along with the public-facing mechanisms for creating and maintaining the evaluation approach of what constitutes “public purpose” as science and society progress.
Topic:: Economics, Science and Technology, International Affairs, Tax Systems, and Tax Credits
Political Geography:: Global Focus and United States of America

405. The Ahvas Protests Are the minorities' demonstrations a reflection of a crisis in Tehran?

Author:: FARAS
Publication Date:: 08-2021
Content Type:: Policy Brief
Institution:: Future for Advanced Research and Studies (FARAS)
Abstract:: On July 15, Khuzestan in South West Iran witnessed a range of protests against the disintegrating economic and living conditions in the country, particularly the lack of water within the province, which was called ‘water protests’ or ‘thirst protests’, This was extended to other Iranian cities outside Khuzestan. The protesters' demands evolved to demand the overthrow of the regime itself raising slogans of ‘Death to Khamenei’.
Topic:: Economics, Water, Minorities, and Protests
Political Geography:: Iran and Middle East

406. Ousting Ennahda: Will Kais Saied's decisions help solve the crisis in Tunisia?

Author:: FARAS
Publication Date:: 07-2021
Content Type:: Policy Brief
Institution:: Future for Advanced Research and Studies (FARAS)
Abstract:: On the Tunisia’s 64th Republic Day -Sunday, July 25, 2021- the so-called 25 July Movement called for massive protests all over the country. Consequently, many responded and started protesting in Bardo Square, near the parliament, in the capital Tunis. The protests soon spread across other governorates, such as Sousse, the coastal governorate, Sfax (in the south), and El-Kef (in the northwest). In response, President Kais Saied announced, on July 26, 2021, the dismissal of Prime Minister Hichem Mechichi and his cabinet, which consisted of 25 ministries. Saied decided to take charge of executive power until he chooses another politician to form a new government. He further suspended the current parliament and lifted the parliamentary immunity of all its members. Besides, he decided to rule by issuing decrees instead of the laws, which the parliament was supposed to pass. These decisions were announced after the emergency meeting that was chaired by president Saied, and attended by military leaders and security officials on the day the protests and rallies broke out. The protesters demanded reforming the economy, combatting corruption and terrorism, dismissing the Mechichi cabinet, and dissolving the parliament.
Topic:: Economics, Government, Reform, Crisis Management, and Ennahda Party
Political Geography:: North Africa and Tunisia

407. Tehran Signals: Uncovering the limitations of the Chinese Iranian agreement

Author:: Mervat Zakaria
Publication Date:: 04-2021
Content Type:: Commentary and Analysis
Institution:: Future for Advanced Research and Studies (FARAS)
Abstract:: Uncovering the limitations of the Chinese Iranian agreement The Economic Cooperation Agreement signed between Iran and China in March 2021 unfolded a development plan that includes China injecting $ 400 billion into various sectors of the Iranian economy. This grants Tehran an opportunity to increase the pressures imposed on the new US administration, regarding resumption of the Joint Comprehensive Plan of Action held with the P5+1 in 2015, as well as confronting the surrounding regional threats and alleviating internal pressures by improving the Iranian standard of living.
Topic:: Economics, International Cooperation, and Treaties and Agreements
Political Geography:: China, Iran, Middle East, and Asia

408. The Spark at Sidi Hassine: The Tunisian Protests Between Possible Escalation and Containment

Author:: Karam Saeed
Publication Date:: 06-2021
Content Type:: Commentary and Analysis
Institution:: Future for Advanced Research and Studies (FARAS)
Abstract:: The stripping of a young man on June 8, by Tunisian police in the district of Sidi Hassine, west of the capital Tunis, has sparked a wave of angry protests that swept the whole country. The popular tensions do not stem only from a rejection of violations by the security forces of the cabinet headed by Hichem El Mechichi. Rather they are being stoked by the escalating political polarization among the presidency, the cabinet and the parliament. This is accompanied with the underperformance of state institutions failing to carry out their essential functions, in addition to the deteriorating living conditions, the messy monetary policies, increasing reliance on borrowing from other countries, while at the same time cutting subsidies. All of this triggered the recent wave of protests.
Topic:: Economics, Protests, Institutions, and Police
Political Geography:: North Africa and Tunisia

409. Restoring the Balance: The economic and political motives for the 'New Mashriq' Project

Author:: Muthana Al-Obeidi
Publication Date:: 07-2021
Content Type:: Commentary and Analysis
Institution:: Future for Advanced Research and Studies (FARAS)
Abstract:: The New Mashriq Plan, which was announced in the Baghdad tripartite summit (which brought together president Abdel-Fattah El-sisi of Egypt, King Abdullah II of Jordan, and the Iraqi prime minister, Mustafa al-Kadhimi), stimulated a lot of analyses, which reflected two opposing views. Some analysts seemed to be overly optimistic about the outcomes of this Iraqi-Egyptian-Jordanian project. On the other hand, others adopted a more skeptical, even pessimistic, attitude, believing that it will fail to achieve its purpose, on account of the many challenges it has to face. Despite all the analyses available about the project, questions are still being raised, such as: How did the project develop? What is its economic agenda? What about its political dimensions? And, last but not least, what will its future be like?
Topic:: Economics, Politics, and Treaties and Agreements
Political Geography:: Iraq, Middle East, Egypt, and Jordan

410. Economic Diplomacy: The impact of Russia’s growing role on the Lebanese crisis

Author:: Nawar Samad
Publication Date:: 07-2021
Content Type:: Commentary and Analysis
Institution:: Future for Advanced Research and Studies (FARAS)
Abstract:: A Russian business delegation visited Lebanon in late June 2021 to offer support to the country by cultivating projects in the oil sector, development plans for the energy industry as well as the ports in Beirut and Tripoli. For the past two years, Lebanon, which is going through the worst economic and financial crisis in its history, and has been trying to secure international aid to survive, is now facing the attractive Russian economic bailout offer. Although such an offer is welcomed by Lebanon, the Russian initiative raises concerns across the West, and particularly in the United States, which is in control of Lebanon’s banking system and still has significant influence on the state’s politics and financial sector. The United States believes that it is not possible to dissociate this Russian offer from Moscow’s desire to expand its influence in a region, in which it already established military presence and gained access to the Eastern Mediterranean, where a conflict is underway over investment of newly-discovered gas fields.
Topic:: Diplomacy, Economics, Financial Crisis, and Gas
Political Geography:: Russia, Eurasia, Middle East, and Lebanon

411. Trade and trust: the role of trade in de facto state conflict transformation

Author:: Tamta Gelashvili, Helge Blakkisrud, and Nino Kemoklidze
Publication Date:: 02-2021
Content Type:: Policy Brief
Institution:: Norwegian Institute of International Affairs
Abstract:: De facto states – unrecognized secessionist entities that eke out a living on the margins of the international system – are often heavily dependent on external patron states for economic aid and investment. When the parent state – the state that the de facto state seeks to break away from – responds to the secessionist attempt by imposing sanctions or economic blockades, this further exacerbates such dependency. Moreover, due to their lack of international recognition, de facto states often have limited opportunities to engage with the outside world beyond the patron and the parent state. However, closer examination of one such de facto state, Abkhazia, reveals that de facto states can enjoy some bounded independent economic agency. Abkhazia’s maneuvering between Russia as “patron,” Georgia as “parent state,” and the wider international community (here exemplified by the EU) in the sphere of trade and economic interaction has important implications for de-facto state conflict transformation.
Topic:: Conflict Resolution, Economics, Emerging States, and Trade
Political Geography:: Russia and Eurasia

412. Governance, Social Policy, and Political Economy: Trends in Norway’s Partner Countries

Author:: Stein Sundstol Eriksen
Publication Date:: 04-2021
Content Type:: Special Report
Institution:: Norwegian Institute of International Affairs
Abstract:: In 2017–2018, NUPI (the Norwegian Institute of International Affairs) headed a project where political economy analyses were undertaken in eleven of Norway’s partner countries. These analyses were published as eleven separate reports. The reports focused on power relations and political developments in the partner countries, but they also analyzed the nature of governance. After the publication of the World Bank’s Worldwide Governance Indicators for 2019, the MFA approached NUPI and requested that we summarize the findings of this report for Norway’s eleven partner countries and assess these findings in light of the political economy analyses. We were also asked to investigate whether there were any connections between the nature and quality of governance on the one hand, and the nature of social policies and the human rights situation on the other. This report presents the findings of this assessment of the governance scores in the light of the above-mentioned political economy analyses. The report is structured as follows: Firstly, after briefly describing the governance indictors used by the World Bank, we summarize the eleven countries’ scores on the various governance indicators. Secondly, we assess the evolution of governance in the eleven countries, by comparing the scores in the 2019 report with those from 2011. Thirdly, we summarize the findings of the political economy analyses of the eleven countries and discuss how they fit with the governance scores. Finally, we present the eleven countries’ expenditure on social policies, as reported in the ILOs World Social Protection Report, and the human rights situation for the partner countries, and then describe how these findings relate to the governance scores.
Topic:: Development, Economics, Political Economy, Governance, and Social Policy
Political Geography:: Africa, Europe, and Norway

413. Business & Peace 2021

Publication Date:: 05-2021
Content Type:: Special Report
Institution:: Institute for Economics & Peace
Abstract:: Rather than asking what businesses can do for peace, this study differentiates itself by focusing on what peace can offer businesses. The Institute for Economics & Peace (IEP) sees this as an important, but missing step in business analysis. In order for the private sector to engage with peacebuilding, investors first need to see the benefits of peace to their investment decisions. This work shows that economic performance can be predicted by movements in the same socio-economic developmental factors that affect peacefulness. These conditions are known as Positive Peace. The global economic impact of violence was $14.4 trillion in 2020. This is broadly equivalent to the entire economy of China. If humanity were to reduce violence by ten per cent per annum, the savings of $1.4 trillion would broadly equate to adding an economy the size of Russia’s or Brazil’s every year to the global fold. The burden of violence on an economy is self-evident. However, this report focusses on the converse perspective: countries that improve their underlying conditions, as gauged by IEP’s measures of peace, create the potential for a significant peace dividend for business.
Topic:: Economics, International Political Economy, Business, Peace, and International Business
Political Geography:: Global Focus

414. Mexico Peace Index 2021: Identifying and measuring the factors that drive peace

Publication Date:: 05-2021
Content Type:: Special Report
Institution:: Institute for Economics & Peace
Abstract:: The 2021 report is the eighth edition of the Mexico Peace Index (MPI), produced by the Institute for Economics and Peace (IEP). It provides a comprehensive measure of peacefulness in Mexico, including trends, analysis and estimates of the economic impact of violence on the country. The MPI is based on the Global Peace Index, the world’s leading measure of global peacefulness, produced by IEP every year since 2007. Mexico’s peacefulness improved by 3.5 percent in 2020. After four years of successive deteriorations, this marks a change in trend following the sharp increases in violence recorded between 2015 and 2018. This change can be traced to well before the onset of the COVID-19 pandemic. Homicide and firearms crime rates peaked in July 2018 and have since been gradually declining. Other crime rates began to fall in mid-2019, which also preceded the pandemic. While improvements were occurring prior to the onset of COVID-19, further reductions in specific types of violence in 2020 followed the implementation of public health measures and stay-at-home orders. Crimes typically associated with people’s everyday movements — such as robberies, assaults, kidnappings and extortion — all recorded notable improvements in 2020.
Topic:: Crime, Economics, Violence, and Peace
Political Geography:: Mexico

415. Labour Reforms in the Indian State of Rajasthan: a boon or a bane?

Author:: Sourabh Paul and Diti Goswami
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: The authors examine the impact of labour law deregulations in the Indian state of Rajasthan on plant employment and performance. In 2014, after a long time, Rajasthan was the first Indian state that introduced labour reforms in the Industrial Disputes Act (1947), the Factories Act (1948), the Contract Labour (Regulation and Abolition) Act (1970), and the Apprentices Act (1961). Exploiting this unique quasi-natural experiment, the authors apply a difference-in-difference framework using the Annual Survey of Industries longitudinal data of India’s manufacturing establishments. Their results show that reforms had an unintended consequence of the decline in labour use. Also, worryingly, the flexibility resulted in a disproportionate decline in the directly employed worker. Evidence suggests that the reforms positively impact the value-added and productivity of the establishments. The strength of these effects varies depending on the underlying industry and reform structure. These findings prove robust to a set of specifications.
Topic:: Economics, Labor Issues, Reform, Employment, and Regulation
Political Geography:: India

416. Can a Machine Learn Democracy?

Author:: Rajendran Narayanan, Sakina Dhorajiwala, and Chakradhar Buddha
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides up to 100 days of work in a year for every rural household at a minimum wage. The Act has several landmark worker-centric provisions. For the implementation of MGNREGA, for the first time in the country, a transaction-based Management Information System (MIS) has been made available in the public domain; a feather in the cap of transparency. However, there are several critical questions to be examined in this regard. Our main focus in this article is to explore the tensions between technocracy and democratic values/participation in the context of MGNREGA and its associated MIS. We use our action research on information-based interventions in several states to examine whether the MGNREGA MIS incorporates democratic values, whether it has been inclusive or if it has widened the existing inequities. We use specific examples to illustrate how such an information system has been used to subvert the legal rights of workers. We underscore that technological interventions, with a compassionate human-centred design are potentially powerful tools for transparency, accountability, and grievance redressal. However, technology alone can neither enhance participatory democracy nor reduce socio-economic inequalities.
Topic:: Economics, Science and Technology, Labor Issues, Democracy, Employment, and Artificial Intelligence
Political Geography:: India

417. Tracking Employment Trajectories during the Covid-19 Pandemic: Evidence from Indian Panel Data

Author:: Rosa Abraham, Amit Basole, and Surbhi Kesar
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: Using the CMIE’s Consumer Pyramids Household Survey, we track a panel of households prior to the lockdown (in December 2019), during the lockdown (in April 2020) and afterwards (in August 2020) to investigate the employment and income effects of the Covid-19 pandemic and its associated containment measures. We identify four distinct employment experiences during the pandemic for those who were in the workforce just prior to the lockdown: no loss of employment (“No effect”), loss of employment followed by recovery (“Recovery”), loss of employment with no recovery (“No recovery”), and a delayed loss of employment (“Delayed job loss”). Overall, 54% of individuals experienced no job loss, while 30% lost work in April but recovered by August. 12% had not recovered employment as of August 2020. We analyse how these trajectories vary across different social and economic characteristics to quantify contractions and recovery in the labour market and the extent to which the vulnerabilities vary across different social groups, employment arrangements, and industries. We find that women were substantially more likely to lose employment as well as less likely to recover employment. Job loss was also more severe for lower castes as compared to intermediate and upper castes and for daily wage workers as compared to regular wage workers. Younger workers were particularly vulnerable to job loss compared to older workers. Having lost employment in April, younger workers were also less likely to recover employment in August. Finally, for those who were employed in both December 2019 and August 2020, we examine the changes in employment arrangements. We find a much greater frequency of transitions from wage employment to self-employment, more than that in the seasonally comparable period last year (Dec 2018 to Aug 2019). Our results call for urgent additional fiscal measures to counteract these effects.
Topic:: Economics, Labor Issues, Employment, Unemployment, Pandemic, Job Creation, and Consumerism
Political Geography:: India

418. A Short Note on Debt-Neutral Fiscal Policy

Author:: Zico Dasgupta
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: One of the central concerns against increasing expenditures in the recent period has been the possibility of an adverse impact on debt-GDP ratio. Once stability of debt-ratio is regarded as a policy-objective, the aggregate expenditure that is consistent with the stability condition gets determined by the given level of output growth rate and revenue receipts. Instead of perceiving expenditures to be determined by the debt-stability condition, this short note attempts to lay bare the conditions under which the debt-stability condition is restored despite increasing the growth rate of non-capital primary expenditure to a targeted level. The targeted level of growth rate of non-capital expenditures can be perceived to be one which compensates for the income loss of labour during the pandemic. In contrast to conventional wisdom, the possibility of increasing such expenditures is explored not by reducing capital expenditures, but rather by increasing the latter. Using the multiplier value of capital expenditures estimated by the RBI, it is argued that the debt-ratio would remain unchanged despite increasing the growth rate of non capital primary expenditure if the capital expenditures growth rate is allowed to increase in a specific proportion.
Topic:: Debt, Economics, Political Economy, Labor Issues, GDP, Employment, and Fiscal Policy
Political Geography:: India

419. Technical & Vocational Education and Training in India: Lacking Vision, Strategy and Coherence

Author:: Santosh Mehrotra
Publication Date:: 02-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: This paper briefly examines the performance of each of the five pillars of India’s TVET ecosystem. It also discusses the poor design and implementation of a national vocational qualification framework. It goes to discuss the latest development in the field of education: the National Education Policy 2020 and its view on TVET, and finds it seriously wanting. The paper argues that if India does not want its tertiary education system to be overwhelmed by the massification of school education that occurred since early noughties, it must divert increasing numbers of secondary graduates to vocational education and training. Together with a rising number of jobs in the non-agricultural sector, to which India’s youth aspire to, strengthening vocational education offers the prospect of India potentially realizing its demographic dividend, in the same way that many East Asian countries. If India’s TVET system continues to lack vision, strategy and coherence to underpin the country’s aspiration to become a high human development country, we risk frittering away our dividend.
Topic:: Economics, Education, Labor Issues, Employment, Training, and Vocational Training
Political Geography:: India

420. Explaining COVID-19 Lockdown, Employment and Migration in India: Challenges and Prospects

Author:: Purna Chandra Parida and Yogesh Suri
Publication Date:: 02-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: This paper makes an attempt to do an assessment of the impact of COVID-19 on employment and migration in India. The analysis is based on up-to-date facts and figures available in the public domain on economic growth, employment and migration. Using the employment elasticity approach, the study estimates employment loss during 2020-21 owing to the negative impact of COVID-19 on economic activities. The results of the study suggest that the country may witness job loss with the tune of 18.5  18.8 million in the current fiscal year. This in turn would shoot up the unemployment rate from 5.8% in 2018-19 to 8.9% in 2020-21, warranting a coordinated and focused approach from both the Central and State governments to uplift the confidence of the people and bring back the lost jobs, particularly the migrant workers. The study also emphasises on Central government’s urgent attention and action plan for uplifting the rural economy in order to revive India’s economy in the short run.
Topic:: Economics, Migration, Labor Issues, Employment, Economic Growth, and COVID-19
Political Geography:: India

421. Covid-19 Crisis: An Indictment of India’s Informal Economy

Author:: Jenny Sulfath and Balu Sunilraj
Publication Date:: 02-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: This paper attempts to look at the ways informality is conceptualized in India and argues that the problems with the laws pertaining to informal labour are not simply an implementation issue, but the design of the labour laws itself exclude informal labour. While reviewing the history of labour laws in India and the social history of labour participation, the paper also examines the current change in the political approach to labour by changing the labour laws in the pretext of the pandemic. Focussing on the changes made in labour laws in Madhya Pradesh the paper argues that these changes would further informalise the workers intensifying the crisis.
Topic:: Economics, Labor Issues, Employment, and Informal Economy
Political Geography:: India

422. Down and Out? The Gendered Impact of the Covid-19 Pandemic on India’s Labour Market

Author:: Rosa Abraham, Amit Basole, and Surbhi Kesar
Publication Date:: 02-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: The Covid-19 pandemic has created unprecedented disruptions in labour markets across the world including loss of employment and decline in incomes. Using panel data from India, we investigate the differential impact of the shock on labour market outcomes for male and female workers. We find that, conditional on being in the workforce prior to the pandemic, women were seven times more likely to lose work during the nationwide lockdown, and conditional on losing work, eleven times more likely to not return to work subsequently, compared to men. Using logit regressions on a sample stratified by gender, we find that daily wage and young workers, whether men or women, were more likely to face job loss. Education shielded male workers from job loss, whereas highly educated female workers were more vulnerable to job loss. Marriage had contrasting effects for men and women, with married women less likely to return to work and married men more likely to return to work. Religion and gender intersect to exacerbate the disproportionate impact, with Muslim women more likely to not return to work, unlike Muslim men where we find religion having no significant impact. Finally, for those workers who did return to work, we find that a large share of men in the workforce moved to self-employment or daily wage work, in agriculture, trade or construction. For women, on the other hand, there is limited movement into alternate employment arrangements or industries. This suggests that typical ‘fallback’ options for employment do not exist for women. During such a shock, women are forced to exit the workforce whereas men negotiate across industries and employment arrangements.
Topic:: Economics, Gender Issues, Labor Issues, Women, Employment, and Labor Market
Political Geography:: India

423. How Much is a Government Job in India Worth?

Author:: Kunal Mangal
Publication Date:: 06-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: Government jobs in India are valuable, not just because they pay relatively higher wages, but also because they provide many valuable amenities, such as lifetime tenure, access to bribes, and prestige. Does the value of these amenities compete with the nominal wage itself? I use the observed search behavior of candidates preparing for highly structured competitive exams for government jobs to infer a lower bound on the total value of a government job, including amenities. Based on a sample of 120 male candidates preparing for state-level civil service exams in Pune, Maharashtra, I estimate a total value of at least 425,000 INR per month. This estimate implies that the amenity value of a government job is at least 81% of total compensation. The high amenity value is not driven by misinformed beliefs about the nominal wage, nor by a high value placed on the process of studying itself. I conclude with a discussion of the implications of these findings for policy and the questions it raises for future research.
Topic:: Economics, Government, Employment, Public Sector, Job Creation, and Workforce
Political Geography:: India

424. Where Do They Come From, Where Do They Go? Labour Market Transitions in India

Author:: Rahul Menon and Paaritosh Nath
Publication Date:: 07-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: Using two rounds of the Periodic Labour Force Survey (PLFS) covering the periods 2017-18 and 2018-19, we construct a panel of urban Indian individuals aged 15 to 65, and analyse the dynamics of their participation – or non-participation – in the labour force. We construct transition probabilities to study the movement of individuals through three distinct statuses – employment, unemployment and non-participation – at the aggregate level and for different demographic groups. We find evidence of considerable movements from the labour force to non-participation; there exists a significant discouraged worker effect as well as a pronounced movement from employment outside the labour force, specifically for women. A majority of those unemployed in the beginning of the year remain so at the end of the year, indicating the presence of long-term unemployment. The reduction in unemployment rates from 2017-18 to 2018-19 hides significant weaknesses in Indian urban labour markets. This study represents an original contribution to the field of Indian labour economics, given the paucity of large-scale studies of the dynamics of Indian labour.
Topic:: Economics, Migration, Labor Issues, Employment, Labor Market, and Workforce
Political Geography:: India

425. Improving Survey Quality using Para Data: Lessons from the India Working Survey

Author:: Deepti Goel, Rosa Abraham, and Rahul Lahoti
Publication Date:: 08-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: The efficacy of survey-based policy recommendations is primarily dictated by the quality of data collected in the first place. Is the survey truly representative of the population it claims to characterise? Are respondents voicing their true opinions or are they playing to the gallery? Did enumerator bias creep into the data? These are questions that most users of surveys have, but are typically brushed aside in the race to get the analyses out. While there are no foolproof measures to ensure that survey data are authentic, certain steps can be taken to improve their dependability. One such is the use of what is called ‘para data’ (data about the process of data collection), to streamline enumerator practices, and thereby improve the reliability of the data being collected. This report details our experience of using para data to improve the quality of the India Working Survey (IWS).
Topic:: Economics, Employment, Survey, Data, and Workforce
Political Geography:: India

426. Financing Fiscal Support under Alternative Policy Frameworks

Author:: Zico Dasgupta
Publication Date:: 08-2021
Content Type:: Working Paper
Institution:: Centre for Sustainable Employment, Azim Premji University
Abstract:: This paper perceives fiscal support as a policy instrument and examines alternative policy frameworks that can simultaneously stabilize labour income, output and debt-GDP ratio. The need to stabilize labour income over and above output follows from the possibility of income growth rate of labour falling below output growth rate. This paper points out the limitations of sound finance regime in meeting these targets and proposes an alternative policy framework which is termed as Debt-Neutral Functional Finance with Fiscal Support (DNFS). The DNFS framework highlights the role of development financial institutions and the need for a floor level of corporate tax-GDP ratio.
Topic:: Economics, Employment, Fiscal Policy, and Workforce
Political Geography:: India

427. Georgia’s Fertile Crescent: Marneuli Municipality

Author:: Aleksandre Kvakhadze
Publication Date:: 01-2021
Content Type:: Special Report
Institution:: Georgian Foundation for Strategic International Studies -GFSIS
Abstract:: The recent Covid19 pandemic has disrupted Georgia’s economy and social life. Among the regions suffering most from these disruptions is Marneuli municipality. During the first wave in the spring of 2020, the Georgian authorities introduced a strict lockdown in Marneuli and Bolnisi municipalities. Several weeks of lockdown resulted in local farmers coming out in protest at being unable to sell their agricultural goods, an event which attracted the attention of the Georgian media. Other affairs in Marneuli that have received extensive media coverage are tensions or violent acts accompanying electoral campaigns, and the series of bride kidnappings and arranged marriages occurring in the rural communities of the region. The remainder of regional developments tend to be neglected by the national media, meaning wider Georgian society knows little about the social, political and cultural aspects of the region. This limited knowledge creates fertile soil for the forming of various stereotypes and clichés about the local multiethnic population. In fact, Marneuli municipality has been witnessing very dynamic ethno-political processes of late. Moreover, the region has big potential for further economic development, and a unique cultural heritage accommodating different ethnicities, among them Azerbaijanis, Georgians, Armenians, Greeks, as well as several religious communities. Marneuli also represents an important regional transport junction connecting Georgia with Azerbaijan and Armenia.
Topic:: Agriculture, Economics, Rural, Economic Development, COVID-19, and Municipalities
Political Geography:: Eurasia, Caucasus, and Georgia

428. Turkey’s love-in with Qatar: A marriage of convenience

Author:: Engin Yüksel
Publication Date:: 01-2021
Content Type:: Special Report
Institution:: Clingendael Netherlands Institute of International Relations
Abstract:: This report assesses the impact of Turkish-Qatari cooperation between 2002 and 2020 on conflict and geopolitical competition across the Middle East, North Africa, and the Horn of Africa based on close examination of its drivers. The report notes that neither ideological nor economic drivers adequately explain the recent blossoming of Turkish-Qatari relations. Converging political interests and pragmatism offer a more compelling explanation. On the one hand, Turkey aspires to play a regional leadership role and uses its cooperation with Qatar to strengthen its soft power claim to leadership of the Sunni world. On the other hand, Qatar seeks to ensure its territorial and dynastical safety from Saudi Arabia and its allies – the United Arab Emirates, Egypt, and Bahrain (the Quartet) – by working with Turkey, the recent thaw of the Al-Ula declaration notwithstanding. Turkish-Qatari collaboration is therefore best seen as a pragmatic partnership enabled by compatible geopolitical perspectives, particularly regarding the Muslim Brotherhood.
Topic:: Economics, International Cooperation, Partnerships, Geopolitics, Conflict, and Muslim Brotherhood
Political Geography:: Turkey, Middle East, Saudi Arabia, Egypt, Bahrain, Qatar, and United Arab Emirates

429. Financial disruption and fragile markets: A political-economic perspective on SMEs in the Somali private sector under COVID-19

Author:: Jos Meester, Johannes Claes, Claire Elder, and Guido Lanfranchi
Publication Date:: 05-2021
Content Type:: Special Report
Institution:: Clingendael Netherlands Institute of International Relations
Abstract:: This report explores SME growth and resilience in the fragile Somali context during the COVID-19 pandemic, including its relation to wider political-economic developments. The pandemic has demonstrated how Somali businesses have continued to be resilient and at times even thrive during crisis, but it has also exposed the sizeable vulnerability associated with the Somali territories’ trade, import dependence and financing system. The global COVID-19 pandemic has disrupted the supply and trans-shipment of goods. This has created shortages and price fluctuations for Somalia’s import-based economy and hampered the country’s payment system. It has also reduced remittances, buying power, access to finance and tax revenues. Shifts in funding streams have realigned political financing patterns and created price instability as political actors seek new ventures through which to move funds. Although the economic shock brought about by COVID-19 has not structurally changed the Somali political economy, it has exacerbated existing patterns of inequality. The contribution of the private sector to the COVID-19 response has likely supported a range of livelihoods throughout the Somali territories, yet the preferential access to governance and strong competitive position that allowed this also highlights a worrying level of inequality and market concentration, and raises questions regarding government legitimacy. It seems likely that the COVID-induced economic crisis has therefore reinforced rather than destabilised those dynamics that prevent small businesses from competing on an equal footing and fragile situations from developing and stabilising.
Topic:: Economics, Markets, Politics, COVID-19, and Fragile Markets
Political Geography:: Africa and Somalia

430. ‘A careful foot can step anywhere’: The UAE and China in the Horn of Africa: Implications for EU engagement

Author:: Jos Meester and Guido Lanfranchi
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: Clingendael Netherlands Institute of International Relations
Abstract:: Over the last decade, the UAE and China have vastly expanded their economic, political and military footprint in the Horn of Africa, and their actions now have the potential to shape developments in the region. Room for cooperation between Abu Dhabi and Beijing exists on issues such as maritime security, regional stability, and economic development. Moreover, the two countries’ interaction could lead to improvements in the Horn’s underdeveloped infrastructure by triggering a race to investment. Yet, development and stability in the region might suffer if the strategic interests of external players take precedence over local ones, or if local elites (mis)use external support for narrow domestic political calculations. The EU and its member states have high stakes in the Horn’s stability. To optimise their engagement, European policymakers should be aware of the implications of the Emirati and Chinese presence, and they should strive to improve cooperation among the wide range of external players active in the Horn.
Topic:: Economics, International Cooperation, Politics, Military Affairs, Economic Development, and Economic Stability
Political Geography:: Africa, China, Asia, and Horn of Africa

431. Biden-Erdogan meeting: cautious rapprochement amid still thorny disputes

Author:: Al Jazeera Center for Studies
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: Al Jazeera Center for Studies
Abstract:: As long as Turkey pursues its regional ambitions, any understandings with the US and the West will necessarily have a hard ceiling. However, Ankara seems to be pursuing a more conciliatory policy in the region and in its relations with the West for both economic and strategic reasons.
Topic:: International Relations, Economics, Bilateral Relations, Recep Tayyip Erdoğan, Rapprochement, Strategic Interests, and Joe Biden
Political Geography:: Turkey, Middle East, North America, and United States of America

432. Europe’s Capacity to Act in the Global Tech Race: Charting a Path for Europe in Times of Major Technological Disruption

Author:: Kaan Sahin and Tyson Barker
Publication Date:: 04-2021
Content Type:: Special Report
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Technological leadership has become a central dimension of geopolitical power. In this development, the primary front in the emerging tech power rivalry is between the US (United States of America) and China (People’s Republic of China). The European Union (EU) has fallen behind and needs to catch-up. The stakes in this race are high and will have an impact on economic competition, national security and broader values-based notions of political order. This study sheds light on Europe’s approach to technological mastery. This study looks into the progress of the EU and its member states across selected technological fields and their global entanglements with other nations and technology actors.
Topic:: Development, Economics, Science and Technology, European Union, and Geopolitics
Political Geography:: China, Europe, and United States of America

433. The Logic (and Grammar) of US Grand Strategy: Implications for Germany and Europe

Author:: Markus Jaeger
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: Although President Biden has made US foreign policy more predictable, its medium- and long-term direction and concomitant implications for transatlantic relations are less certain. This report presents three scenarios of how US strategy might evolve. They provide insight into how the United States behaves in the spheres of security and international economy under different conditions and why, suggesting ways for the EU and Germany to preemptively mitigate risks and positively influence future policy.
Topic:: Security, Economics, Grand Strategy, Risk, and Transatlantic Relations
Political Geography:: Europe, Germany, North America, and United States of America

434. The New Geo-Economic Environment and the EU’s Capacity to Act

Author:: Claudia Schmucker
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: The European Union must position itself in a new geo-economic environment in which the United States and China are increasingly using their economies to shape international relations, as well as regional and global regulatory structures. Although the EU has a good grasp of the challenges that this new environment poses, it does have vulnerabilities in its bilateral and multilateral channels that require attention.
Topic:: International Relations, Economics, Environment, Bilateral Relations, European Union, Geopolitics, Regulation, and Multilateralism
Political Geography:: China and United States of America

435. Germany Between a Rock and a Hard Place in China-US Competition

Author:: Markus Jaeger
Publication Date:: 03-2021
Content Type:: Commentary and Analysis
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: The Biden administration has just issued its Interim National Security Strategic Guidance. The guidance document states the need to “build back better at home” and acknowledges that “international economic policies must serve all Americans” – a theme often referred to as “foreign policy for the middle class”. While the interim guidance does not preclude cooperation with China in selected policy areas, it is unambiguous in considering China a strategic competitor. The prospect of intensifying China-US geopolitical and (geo)economic competition is bad news for Germany, which has high value trading and investment relationships with both countries.
Topic:: Foreign Policy, Economics, National Security, and Geopolitics
Political Geography:: China, Europe, Asia, Germany, North America, and United States of America

436. Assessing China and Russia’s Influence on the German Parliamentary Elections

Author:: Didi Kirsten Tatlow and András Rácz
Publication Date:: 08-2021
Content Type:: Commentary and Analysis
Institution:: German Council on Foreign Relations (DGAP)
Abstract:: China and Russia want to maintain Germany’s political status quo: Centrist, at times mercantilist policies, have often worked in their favor. Now, with the Green Party ascendant and public opinion shifting, neither Russia nor China can be sure that classic "centrism” will emerge after September. Russia and China will increase their influence and interference efforts in the run-up to the election and beyond, using informational, political, and cyber tactics, and economic and political networks.
Topic:: Economics, Politics, Public Opinion, and Elections
Political Geography:: Russia, China, Eurasia, and Asia

437. Why Wages Are Growing Rapidly Now— And Will Continue to in the Future

Author:: Gad Levanon and Frank Steemers
Publication Date:: 07-2021
Content Type:: Special Report
Institution:: The Conference Board
Abstract:: In the first half of 2021, wages grew at the fastest pace in over 20 years. The sudden surge is likely to challenge organizations in recruitment, retention, and compensation strategies in the near term—and over the next decade. Wage growth in the US through 2022 and beyond fits into three distinct phases: 1) strong wage growth in the spring and summer of 2021; 2) moderating wage growth by late 2021 and during 2022; and 3) renewed acceleration of wages in 2023 and beyond, most notably in blue-collar and manual services.
Topic:: Economics, Labor Issues, Business, and Wage Growth
Political Geography:: United States of America

438. Building Infrastructure in Real Time: Avoiding Regulatory Paralysis

Author:: Committee for Economic Development of the Conference Board
Publication Date:: 09-2021
Content Type:: Policy Brief
Institution:: The Conference Board
Abstract:: The physical infrastructure base of the US economy, once an advantage in global competition, has become a liability. This problem has multiple causes, several of which CED has addressed in recent policy statements, and our nation’s elected policymakers are now taking up the need for additional funding. But the nation needs not only adequate funding but also a more-efficient regulatory process for our infrastructure investment—choosing the right projects, with the minimum delay, and executing them at the least possible cost. Regulatory paralysis is one of the causes of our infrastructure shortfall. It needs attention if we are going to spend our tax dollars on infrastructure wisely and efficiently so that the US economy remains globally competitive. Streamlining regulatory procedures, promoting competition, and cutting red tape across federal, state, and local governments are key to increasing investment, decreasing cost, and maximizing efficiency. Business as usual will not suffice. It takes too long and costs too much to deliver infrastructure projects, preventing us from achieving the advancements and improvements that a future-focused, competitive economy requires. CED has consistently advocated “smart regulation,” subjecting new regulations to rigorous cost-benefit analysis and reviewing existing regulations for continuing cost effectiveness to enhance efficiency and achieve quicker execution, greater benefits, and lower costs. With long delays between project conception and execution, and often multiple layers of jurisdiction and review, a smart regulation approach could ensure that the rules governing review and permitting of projects address all important concerns and ensure that net benefits are maximized over time at all levels of government on a comprehensive and timely basis.
Topic:: Economics, Infrastructure, Governance, Regulation, Business, Economic Policy, and Strategic Competition
Political Geography:: North America and United States of America

439. Annual Social Security and Medicare Trustees Report Reflects Worsening Economic Environment

Author:: Committee for Economic Development of the Conference Board
Publication Date:: 09-2021
Content Type:: Policy Brief
Institution:: The Conference Board
Abstract:: The Trustees of the Social Security and Medicare Trust Funds are required by law to produce an annual report on April 1 of each year. It is by no means a shock that the report is late in any year; it happens often. This year, however, there is probably more of a justification that the report was released only yesterday, five months late. The economic and health care environments are perhaps as chaotic and uncertain as they have been in living memory.
Topic:: Economics, Health Care Policy, and Social Security
Political Geography:: North America and United States of America

440. Timor‐Leste’s ASEAN Membership Prospects in a Time of Geopolitical Ambiguity

Author:: Hannah Foreman
Publication Date:: 01-2021
Content Type:: Special Report
Institution:: East-West Center
Abstract:: Timor-Leste is a small democratic country in an increasingly strategic region. Since gaining independence in 2002, Timor-Leste has made remarkable progress as Asia’s youngest democracy, but it has a long way to go in improving its economic and political situation. ASEAN membership for the Timorese is viewed as a way to reconcile economic, security, and geopolitical interests, while carving out a regional identity. Timor-Leste’s push for ASEAN membership started in 2011 and intensified during the latter half of 2019 when Foreign Minister Dionisio Babo Soares visited all ten ASEAN capitals in the summer followed by ASEAN fact finding missions in Dili in the fall. While Timor-Leste’s response to COVID-19 is impressive, the economic toll continues to be severe. Therefore, ASEAN membership is a comparatively lower priority this year, but is still under consideration by members, based on Vietnamese Prime Minister Nguyen Xuan Phuc’s speech during the recent ASEAN Summit.
Topic:: Security, Economics, Democracy, Geopolitics, and COVID-19
Political Geography:: Timor-Leste and Asia-Pacific

441. A Behavioural Perspective on the Drivers of Migration: Studying Economic and Social Preferences Using the Gallup World Poll

Author:: Katrin Klöble
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: German Institute of Development and Sustainability (IDOS)
Abstract:: This paper addresses the self-selection of potential migrants. In particular, the study examines whether risk and time preferences explain a significant proportion in the movement heterogeneity of individuals. It is further intended to shed light on the role of social preferences (trust, altruism, reciprocity) as potential migratory determinants. By making use of a unique cross-sectional data set on migration intentions (Gallup World Poll) and experimentally-validated preferences (the Global Preference Survey) covering 70 countries worldwide, a probit model is estimated. The empirical results provide evidence that potential migrants exhibit higher levels of risk-taking and patience than their counterparts who stay at home (the stayers). This holds true across differing countries with various cultural backgrounds and income levels. Trust and negative reciprocity are found to be significantly related to migration aspirations as well. Yet conclusive clarifications still remain necessary, providing impetuses for future research.
Topic:: Economics, Migration, Risk, and Polls
Political Geography:: Global Focus

442. EU–Africa Partnership on Migration and Mobility in Light of COVID-19: Perspectives from North Africa

Author:: Mehdi Lahlou
Publication Date:: 02-2021
Content Type:: Working Paper
Institution:: Istituto Affari Internazionali
Abstract:: The coronavirus pandemic has turned into a global economic crisis with severe social effects in the least developed countries, particularly in Africa. Pre-existing challenges related to widespread poverty, demographic growth, food insecurity and governance issues have been exacerbated by the pandemic. While migration remains one of the key elements of the partnership agenda between Africa and the European Union, the aggravating socioeconomic situation in the African continent due to the impact of COVID-19 and its implications for migration dynamics requires going beyond business-as-usual approaches. The renewed scenario calls for a more comprehensive and development-oriented approach to migration, requiring new policy initiatives addressing the wider set of conditions that, beyond constituting developmental challenges in their own right, also drive migration in North Africa as well as in Sub-Saharan African countries.
Topic:: Economics, Migration, European Union, Mobility, Asylum, and COVID-19
Political Geography:: Africa, Europe, and North Africa

443. Against All Odds: An Ambitious Climate Policy for Lebanon

Author:: Silvia Crescimbeni, Abi-Nassif, Vahakn Kabakian, and Jessica Obeid
Publication Date:: 04-2021
Content Type:: Video
Institution:: Middle East Institute (MEI)
Abstract:: Amid converging political, economic, and humanitarian crises, Lebanon has recently doubled down on its climate ambition for the next ten years. In its Nationally Determined Contributions (NDC) submission to the United Nations Framework Convention on Climate Change (UNFCCC), the country has revised both its GHG emission reduction targets and renewable-energy-sourced power generation targets upwards. Does climate change bear national security implications for Lebanon today? How can climate-proofed infrastructure projects and low-carbon technologies attract investments, create jobs and support Lebanon’s economic revival post-collapse? How will immediate policy choices and renewable energy integration ensure economic growth and shape the future of critical sectors such as energy, water, food, and transportation? What is the role of climate diplomacy and partnerships in achieving Lebanon's climate ambitions? How can Lebanon ensure that its climate policy does not fall through the cracks?
Topic:: Climate Change, Economics, National Security, Politics, and United Nations
Political Geography:: Middle East and Lebanon

444. Xi Jinping’s Evergrande Dilemma

Author:: John Lee
Publication Date:: 09-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Evergrande is one of the top-two real estate developers in a still highly fragmented Chinese sector. Its main strategy is to achieve ever-increasing scale (rather than profitability) in order to move ahead of and crowd out commercial competitors. It has also amassed the largest land reserves of all Chinese developers, which were financed through massive borrowings. By 2018, Evergrande held 822 pieces of undeveloped land in 228 cities, with a planned gross floor area of 3.28 billion square feet of new homes—the equivalent of 10 percent of Germany’s entire housing stock. It paid $75 billion just for this undeveloped land. Although Evergrande’s market share is only around 4 percent, its borrowings stand out. Its current balance sheet liabilities amount to an estimated 2 percent of China’s gross domestic product (GDP), while its off-balance-sheet liabilities could be another 1 percent of China’s GDP. This makes Evergrande the most indebted property developer in the world. Burdened by this debt, struggling to meet its debt interest and repayment obligations, and viable only if property asset values and sales continue to increase, Evergrande faces possible financial collapse—an event bound to have flow-on effects for the Chinese economy. However, the unusually high global interest in Evergrande has arisen because its woes are increasingly seen as symptomatic of those faced by the broader Chinese economy, which is struggling with enormous levels of indebtedness and overreliance on the real estate sector. Debt held by nonfinancial institutions in China increased from about 115 percent of GDP in 2010 to around 160 percent of GDP currently. This is the most rapid and largest increase in a 10-year period for any major economy and makes the level of debt held by Chinese nonfinancial institutions one of the highest in the world. The real estate sector accounts for around 15 percent of GDP, while property services account for another 14 percent—the highest in any developing economy. The share of the real estate sector as a proportion of GDP was only about 4 percent in 1997 and 9 percent in 2008. Since 2008, up to a third of all domestic fixed investment has gone into real estate, and up to half of total national debt is linked to the real estate sector.
Topic:: International Relations, Foreign Policy, Debt, Economics, Markets, and Business
Political Geography:: China and Asia

445. Transatlantic Paralysis: The US-EU Trade Policy Stalemate and the European Union’s Democratic Deficit

Author:: Thomas J. Duesterberg
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: What is often labeled the democratic deficit in governance of the European Union (EU) is not a a flaw or bug in its architecture, it is a design feature. From its earliest days in the Second World War’s chaotic aftermath, European integration “was essentially an elite project, pursued at a distance from the daily concerns of the national populations in Western Europe.” Also formed as a response to the economic disintegration following the Depression and World War Two, the General Agreement on Tariffs and Trade (GATT) was similarly removed from national or populist politics. It too was an elite, top-down initiative designed to embed nations in a system of international rules largely articulated by technical experts, enforced by a form of international courts, and far removed from national and populist politics. Many of the intellectual proponents of both supranational institutions, from the Austrian School of economics, the ordoliberals emerging in early-20th century Germany, to the London School of Economics indeed shared a distrust of American-style democracy, let alone the various parliamentary democracies whose failure led to the disasters of the 1930s and 1940s. Over the last fifty years, the institutions put in place after World War II have been perfected and have, to a certain extent, ossified. Many of the difficulties in achieving greater US-EU economic coordination in the 21st century have their origins in the institutional design and the subsequent early implementation of early European Community rules during the post-war period. A brief overview of the history of European integration, and the political thinking behind it, helps explain the current paralysis in contemporary transatlantic cooperation, including in a joint approach to the challenge of Chinese mercantilism and its growing international reach.
Topic:: Economics, Governance, Democracy, Trade, and Transatlantic Relations
Political Geography:: Europe, North America, and United States of America

446. Winning the Geo-Tech Battle and Building the Quad Alliance in the Indo-Pacific

Author:: Eric B. Brown, John Lee, and Thomas J. Duesterberg
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Under Xi Jinping, the People’s Republic of China (PRC) has established as its paramount geopolitical objective the replacement of the free and open, rules-based order in Asia with an alternative world order, one that is to be dominated by the interests and values of the Chinese Communist Party (CCP). This decision presents a danger to the entire world, not just to any one state or group of states. For, as US Secretary of State Antony Blinken said at the March 2021 US-PRC meeting in Alaska, the alternative to a rules-based order “is a world in which might makes right and winners take all, and that would be a far more violent and unstable world for all of us.” In furtherance of its objectives, the PRC is in the midst of a large military build-up, but there is much more. For today’s CCP, political power grows not only from the “barrel of the gun,” as Mao Zedong once put it, but also from cutting-edge technologies. Thus, while Beijing pours billions into artificial intelligence and surveillance tech to impose its new “digital totalitarianism” inside the PRC, from Hong Kong to Xinjiang, it is also using its growing technological prowess to press its larger geopolitical agenda in the Indo-Pacific and beyond. It is weaponizing technology and connectivity, along with trade, finance, and other policy instruments to try to rule the key technologies and industries of the future, as well as to improve its strategic positioning and acquire political power over other countries—for instance, through its bid to dominate other nations’ most sensitive data networks, or via the export of its suite of “social stability” technologies, i.e., the “techno-tyrant’s toolkit.” In all this, the CCP’s intent is to entrench its power and Leninist norms and practices to the extent it can do so beyond the PRC’s borders, and to make other nations, or at the least their ruling elites, beholden to it. So in addition to the PRC’s militarily destabilizing activities in the West Pacific and incursions into India’s Himalayas, there is also a “geo-technological front.” If Xi’s CCP succeeds at enmeshing other countries in its expanding “PRC sphere of technological influence,” it could unlock and be able to exploit decisive military, economic, diplomatic, and ideological advantages.
Topic:: International Relations, Security, Economics, and Alliance
Political Geography:: China, South Asia, East Asia, and Asia-Pacific

447. The Chinese Communist Party’s Economic Challenge to the Free World

Author:: Miles M. Yu
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: The Chinese economy and the philosophical roots of China’s system have greater implications for the United States economy than many assume. The one critical fact to understand about the People’s Republic of China is that it is a communist dictatorship ruled by a Marxist-Leninist party. The Party is dedicated to maintaining and strengthening its monopoly on all powers in the world’s most populous country and to mounting the most serious challenge to the free world since the Cold War. This policy memo will examine the Chinese economy’s distinct traits, how it operates, and why it thrives under a monopolistic government that exploits and challenges the global free market system, along with possible policy recommendations for the United States and its allies. Unlike most other communist countries, China has been afforded the benefits of a global free-market system and enjoys largely open access to international trade, capital markets, and advanced technologies. The paradox of a communist nation fully participating in a largely capitalist system has enriched and strengthened the Chinese Communist Party (CCP), to the point where Beijing poses a mortal threat to the United States and to the international free market economic system that has enabled the rise of the communist state. The West played a role in creating the current state of play. But too many conversations in the United States focus only on our own strategic thinking. In his historic speech at the Richard Nixon Library in July 2020, former Secretary of State Mike Pompeo aptly described the situation and how we got here: “Our policies—and those of other free nations—resurrected China’s failing economy, only to see Beijing bite the international hands that were feeding it.” As President Richard Nixon admitted in his later years, his initiative to open up China in 1972 might have created a Frankenstein.
Topic:: Foreign Policy, Communism, Economics, and Chinese Communist Party (CCP)
Political Geography:: China, Asia, and United States of America

448. Building a Strong and Independent Iraq: Policy Guidance for the Biden Administration

Author:: Abram N. Shulsky
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Formulating US policy toward Iraq can be a fraught matter, given all the debate and disagreement concerning the actions that brought us to the current situation. However, our policy must be formulated in light of it, regardless of views about our past actions. Policy formulation should begin with the realization that Iran has gained a predominant political and military influence in Iraq. Despite efforts of past PM Adel Abdul Mahdi and current PM Mustafa al-Kadhimi, many of the militias comprising the Popular Mobilization Forces (PMF) still answer to Iran, not the Iraqi government. Iran exerts widespread influence throughout the political class. Economically, Iraq remains dependent on Iran for energy;1 religious tourism from Iran to the holy sites in Karbala and Najaf is an important source of revenue; and Iran has flooded markets with cheap food and consumer goods. Although Iraqi oil production has rebounded, the economy remains relatively moribund and the level of basic public services is poor. (That Iraq flares off its natural gas at the same time it is importing it from Iran to produce electricity2 highlights the economic disfunction.) Popular discontent boiled over in 2019, leading to widespread protests. The protests took on an anti-Iranian aspect, and Iran-aligned PMF units attacked the protestors.
Topic:: Security, Foreign Policy, Agriculture, Economics, Government, Politics, and Military Affairs
Political Geography:: Iraq, Middle East, and United States of America

449. Transforming the Middle East: The Origins, Impact, and Evolution of the Abraham Accords

Author:: Robert Greenway
Publication Date:: 03-2021
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: The Abraham Accords constitute the beginning of a transformation of a region that has confounded many, and that will continue to be a vital battleground astride the security and economic interests of world powers. American leadership was a necessary but alone insufficient condition to the emergence of this agreement. American leadership will remain essential to its growth and evolution. The alignment of our regional partners and allies in both economic and security domains will ensure that the agreement endures. It will also incentivize others to join us in pooling critical capacities to advance and defend mutual interests. This transformation serves to constrain Iran – the threat from which has been recognized as causal – even as it constrains the malign influence and predatory practices of China and Russia. They will continue to manufacture and exploit fissures among the U.S. and its regional partners if we fail to exploit the favorable shift in the region’s security and economic architecture. On the other hand, appropriate support will allow the Abraham Accords to advance and secure America’s interests with the use of significantly fewer resources and with more capable partners integrated as never before.
Topic:: International Relations, Security, Foreign Policy, Diplomacy, Economics, and Negotiation
Political Geography:: Russia, China, Middle East, Israel, and Palestine

450. Directions of Innovation Policy: Contrasting Views of China and the US

Author:: Anna Jaguaribe and Kamila Aben Athar
Publication Date:: 08-2021
Content Type:: Special Report
Institution:: Brazilian Center for International Relations (CEBRI)
Abstract:: At the 24th China Analysis Group Meeting, experts analyzed the contrasting views of innovation policies in China and in the United States. The 14th five-year plan continues most of the economic efforts that characterized the last decade while also challenging some certain well-established elements. Internet development is still the dominant focus, but we can also observe the shift towards a service-based economy and high investment in infrastructure. According to the participants, one of the most relevant differences between the US and China is the way non-state actors are connected to the national government. American innovation efforts heavily feature research groups and private corporations having an active role, while in China the government puts up barriers that distort the market and influence it more directly. The tension between the two countries is stronger than ever and the new Biden administration brings a new set of uncertainties to the table, but at the same time, both China and the US are heavily dependent on each other economically. China’s efforts to expand its influence worldwide by negotiating with multiple countries will most likely exacerbate the conflict and talks regarding a decoupling, which currently seems unlikable.
Topic:: Foreign Policy, Economics, Markets, Infrastructure, and Innovation
Political Geography:: China, Asia, and United States of America

451. Nudging for Recovery: Behavioral Economics and the implementation of the National Recovery and Resilience Plan

Author:: Demosthenes Kollias
Publication Date:: 10-2021
Content Type:: Working Paper
Institution:: Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:: With the National Recovery and Resilience Plan, Greece is presented with yet another opportunity to catch up with global trends. At the same time, behavioral economics are being established worldwide as a valuable asset in the policy maker’s toolkit. The paper -mainly focusing on taxation, labor market policy, and climate change- aims to examine the behavioral conundrum that creates frictions and inefficiency in the domains outlined above and to offer concrete and quantifiable policy proposals, in accordance with the goals of Greece 2.0. Regarding tax evasion, for example, one can estimate at least €1 billion in additional tax revenue if the proposals are implemented.
Topic:: Climate Change, Economics, Tax Systems, Labor Market, and Economic Recovery
Political Geography:: Europe and Greece

452. EU-Turkey Economic Relations and the Customs Union: a rules-based approach

Author:: Dimitris Tsarouhas
Publication Date:: 05-2021
Content Type:: Working Paper
Institution:: Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:: Trade and economic relations remain the cornerstone of EU-Turkey relations. The Customs Union (CU) is the sole institutionalized instrument that remains important for both sides. Launching negotiations on how to update its content offers a set of fresh opportunities for the EU to reintroduce political as well as economic conditionality in its relations with Turkey. A step-by-step approach based on monitoring and benchmarking can enhance EU leverage vis á vis Turkey and allow the EU to escape a cycle of ineffective policy interventions on Turkey’s political trajectory. The CU can also become a vehicle to assist the democratic segments of Turkey’s civil society as well as those EU member states who have found themselves searching for an alternative to Turkey’s failed Europeanization.
Topic:: Foreign Policy, Economics, Migration, and European Union
Political Geography:: Europe and Turkey

453. Managing Lebanon’s Compounding Crises

Author:: International Crisis Group
Publication Date:: 10-2021
Content Type:: Special Report
Institution:: International Crisis Group
Abstract:: Lebanon is suffering economic meltdown while its politicians dither. Reform – and fiscal relief – is unlikely before 2022 elections. While pushing for timely polls, international partners should send humanitarian assistance to ease the public’s pain, keep key infrastructure running and avert security breakdowns.
Topic:: Security, Economics, Infrastructure, Reform, and Fiscal Policy
Political Geography:: Middle East and Lebanon

454. Syria: Shoring Up Raqqa’s Shaky Recovery

Author:: International Crisis Group
Publication Date:: 11-2021
Content Type:: Special Report
Institution:: International Crisis Group
Abstract:: After suffering grievously under ISIS, and during the battles to defeat it, Raqqa is being rebuilt. The calm is tenuous, however. The U.S. and partners should work toward long-term stability in Syria’s north east, through investment and talks about sustainable governance and security arrangements.
Topic:: Economics, Governance, Recovery, Sustainability, and Strategic Stability
Political Geography:: Middle East and Syria

455. Vietnam Tacks Between Cooperation and Struggle in the South China Sea

Author:: International Crisis Group
Publication Date:: 12-2021
Content Type:: Special Report
Institution:: International Crisis Group
Abstract:: Together with the Philippines, Vietnam is on the front line of maritime disputes with China. The risk of armed confrontation is low but growing. Hanoi should redouble efforts to build confidence, starting with less sensitive issues, and to establish an effective Code of Conduct.
Topic:: Economics, Regional Cooperation, Maritime, Conflict, and Peace
Political Geography:: China, Asia, and Vietnam

456. Containing Crisis: Strategic Concepts for Coercive Economic Statecraft

Author:: Emily Kilcrease, Emily Jin, and Rachel Ziemba
Publication Date:: 12-2021
Content Type:: Special Report
Institution:: Center for a New American Security (CNAS)
Abstract:: As the United States and China seek to manage an increasingly tense relationship, both sides have turned to coercive economic statecraft as a core part of their broader foreign policy, with disruptive impacts on the global economic order. A growing body of research examines the use of coercive economic tools, including prior work by the CNAS Energy, Economics, and Security program. This report adds to that literature by specifically examining the use of coercive economic tools during periods of geopolitical crisis to assess their value in de-escalating tensions or deterring further economic coercion. The researchers developed scenario exercises to examine these dynamics, supported by a literature review and extensive engagement with subject matter experts. The insights from the research informed the development of two overarching strategic concepts intended to guide U.S. policymakers when deploying economic tools as part of a crisis management situation.
Topic:: Security, Foreign Policy, Economics, Bilateral Relations, and Crisis Management
Political Geography:: China, Asia, North America, and United States of America

457. The Proliferation Of Informal Housing In Major Cities In Cameroon: Evidence, Drivers And The Way Forward

Author:: Dr. Louis-Marie Kakdeu and Egoh Aziz
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: The Nkafu Policy Institute
Abstract:: The proliferation of informal settlements in Cameroon is problematic. A range of factors explain why this is becoming recurrent. Some of these factors include a deficit of housing supply, unaffordability issues, critical market factors, weak legal and institutional systems, and the socio-economic conditions of the country. This article focuses on the roots of Cameroon’s informal housing crisis. Reviewing the literature on the topic, we provide the context of the problem in Cameroon by pointing out some evidence and magnitude of the issue and probe into some historical facts on housing. We then explore some of the negative conduits to the housing problem and propose key recommendations to the government that can help improve the situation. We used the content analysis method in collecting data.
Topic:: Economics, Governance, Regulation, Housing, and Real Estate
Political Geography:: Cameroon

458. Snakes, rats and drug addicts used to dwell here – analysis of the narrative utilised to capture the state

Author:: Luka Steric
Publication Date:: 03-2021
Content Type:: Commentary and Analysis
Institution:: Belgrade Centre for Security Policy
Abstract:: Foreign direct investments are the cornerstone of the current government’s economic policy. In their statements, the officials call them drivers of development, saying that they have enabled the revival of the economy and turned Serbia into the “economic tiger of Southeast Europe.”1 The fact that the value of the investments Serbia has managed to attract is greater “than what was achieved by all the countries of the Western Balkans put together” 2 is often mentioned as the key measure of success. However, the story of brilliant success quickly loses its lustre when one considers the long-term effects and all-encompassing consequences of this policy. Due to the way they are contracted and implemented, foreign direct investments represent one of the key mechanisms for capturing the state. Hiding behind the stories of a better future and new jobs, the government is breaking down the system of legal regulations and statutory procedures, promoting private interest to the detriment of the public one, and using foreign investments as propaganda ammunition to legitimise unlimited power. The results of such policy are a number of negative consequences for the state and the citizens, such as the increase of public debt, dramatic violation of workers’ rights and alarming problems with environmental pollution. In order to mask the negative consequences and legitimise the policy of attracting foreign investors based on the above described pattern, a complex narrative has been developed presenting foreign investments as a successful, and the only possible, model for state development. This meta-narrative about progress, which media are building up every day, is based on four basic component narratives: on the economic revival, on the efficiency of personal rule, on transparent contracts and on the opponents of Serbia’s development who ‘unfoundedly’ criticise the government’s economic success. In the analysis of the narrative we will focus on the statements of officials made since 2012, which is when the regime led by the Serbian Progressive Party came to power. Many of the described mechanisms, such as non-transparent, harmful contracts and unjustifiably high subsidies, also existed during the previous government.3 However, the capture of the state, carried out - among other things - with the help of foreign direct investments, has reached completely new dimensions under the current regime, while the narratives that accompany it have been significantly ‘improved’.
Topic:: Development, Economics, Foreign Direct Investment, and Drugs
Political Geography:: Europe and Serbia

459. Overcoming The Challenge Of Fiscal Transition In Cameroon

Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: The Nkafu Policy Institute
Abstract:: On 16 November 2020, Cameroon’s government published the 2030 National Development 2020- Strategy (SND30), which operationalises the second phase of the emergence vision for 2035. This 10-year plan aims to implement favourable conditions for sustainable economic growth and an accumulation of national wealth through structural changes essential for industrialisation. The strategic objectives to be achieved can be summarised as follows: achieve approximately a double-digit economic growth attain the 25% threshold as the share of manufacturing production in GDP reduce poverty to less than 10% in 2035 consolidate the democratic process and strengthen national unity while respecting the diversity that characterises the country To achieve these clearly defined objectives, public authorities must increase their efforts to encourage local production. In other words, local producers need to be supported and supervised by being rewarded with a package of tax relief measures. The challenge is to promote the “made in Cameroon” and progressively reduce the dependence on manufactured products’ imports.
Topic:: Economics, Economic Growth, Tax Systems, and Fiscal Policy
Political Geography:: Africa and Cameroon

460. The Concept Of Africapitalism And The Role Of The Private Sector In Africa’s Socio-Economic Development

Author:: Dinga Tambi and Dr. Fuein Vera Kum
Publication Date:: 03-2021
Content Type:: Policy Brief
Institution:: The Nkafu Policy Institute
Abstract:: Development is one of the main priorities of the United Nations. Development is a multidimensional concept that seeks to achieve a higher quality of life for all people. Economic development, social development and, environmental protection are interdependent and mutually reinforcing components of sustainable development. Africa is one of the fastest-growing continents in the world today. The private sector plays a great role in terms of job creation and employment. Constrained by a crippling environment and burdensome government policies for decades, Africa still hosts a majority of the least developed countries of the world. The private sector is said to have a major role to play in Africa’s development, a situation which Elumelu (2019) describes as ‘Africapitalism.’ According to Elumelu (2019) Africapitalism represents the belief that the private sector in Africa has a critical role to play in the continent’s development. For Africapitalism to hold, some basic principles have be put in place. These include entrepreneurship, long-term investments, investment in strategic sectors, and regional connectivity amongst others. Africapitalism lays emphasis on private sector growth as the primary driver of Africa’s development. It calls for a new kind of capitalism for Africa: one that focuses on long-term investment in key sectors of the economy to spark the growth of African-owned businesses, stimulate the creation of jobs, and guarantee sustainable economic growth. Essentially, africapitalism embodies a private sector-led approach to solving some of Africa’s most intractable economic growth and development problems.
Topic:: Economics, Capitalism, Business, Economic Development, Private Sector, and Job Creation
Political Geography:: Africa

461. An Analysis of the Effects of Oil Price Fluctuations on the Conduct of Monetary Policy in the Economic

Publication Date:: 03-2021
Content Type:: Working Paper
Institution:: The Nkafu Policy Institute
Abstract:: For many years, the economies of the Economic and Monetary Community of Central Africa, like most of the world’s economies, have been confronted with numerous fluctuations in the price of raw materials on international markets. For these predominantly extroverted economies, that is, those dependent on export earnings, these price variations have consequences for their macroeconomic performance and the conduct of economic policy. Like most economic crises in the world in the past, the pandemic caused by the new Coronavirus that has been raging since 2020 has also brought with it many changes. Between the confinement measures taken by public authorities to curb the spread of the virus and the resulting slowdown in global economic activity, there has been an inevitable significant drop in global oil demand. The direct consequence of such a scenario is the fall in oil prices on world markets, which is very bad news for the public finances of oil-exporting countries. The main objective of this report is to analyze the effects of oil price fluctuations on the conduct of monetary policy in the CEMAC. We start from the observation that oil shocks are the source of strong inflationary pressures in these economies. It is the responsibility of monetary policy to ensure price stability. Thus, after analyzing the effects of oil price fluctuations on the world economy as well as the macroeconomic and financial implications of these fluctuations on the economies in 2020, we use a Vector Auto Regressive model to analyze the contribution of oil price shocks on the historical dynamics of macroeconomic variables in the various CEMAC countries between 2001 and 2020. Then, we use a Panel Smooth Transition Regression model to analyze the impact of oil price changes on monetary policy in the CEMAC.
Topic:: Economics, International Political Economy, Oil, Natural Resources, Monetary Policy, Global Markets, Inflation, and Macroeconomics
Political Geography:: Africa, Cameroon, and Central Africa

462. Should We Consider A Post-Covid-19 Reform Of The VAT In Cameroon?

Publication Date:: 03-2021
Content Type:: Special Report
Institution:: The Nkafu Policy Institute
Abstract:: The COVID-19 pandemic so far has had a profound impact on the global economy. The containment measures adopted by governments to curb the spread of the disease have curtailed business activities, making it impossible for companies to adequately meet their tax obligations. As a result, forecasts for customs revenues and internal tax resources have been revised downward, mainly due to the closure of borders. Collected both at the borders and within the country, Value Added Taxes revenues have naturally been very negatively affected by the crisis. In Cameroon, losses related to value added tax in 2020 were estimated at CFAF 298.017 billion, representing 50.73 percent of recorded tax losses, which is hardly surprising. Value-added taxes are identified as the main source of tax revenue in Cameroon. They were estimated at 44.73% of tax revenue in 2019 and about 7% more than in 2016. The importance of VAT in tax revenue mobilization requires an examination of the Cameroonian tax system, particularly the factors that could explain a reform of the tax. Moreover, given that Cameroon is at high risk of external debt distress (IMF, 2018), there is an urgent need to find new ways to ensure the continued sustainability of public finances. This Tax Policy Letter analyzes the rationale for VAT reform in Cameroon. First, we present the severity of the economic repercussions of the coronavirus health crisis at the level of VAT revenues in Cameroon. Noting that VAT is the main source of indirect tax revenue – 60.19% in 2019 compared to 54.54% in 2016, for example – we then examine the guiding principles that govern its collection and application in Cameroon. A careful examination of these principles has allowed us to analyze the benefits associated with a reform of this tax on final consumption.
Topic:: Economics, International Political Economy, Tax Systems, Macroeconomics, Fiscal Policy, and Revenue Management
Political Geography:: Africa and Cameroon

463. The Declaration and Payment of Taxes in Cameroon: A Critical Appraisal

Author:: Dr. Louis-Marie Kakdeu, Ulrich D’POLA KAMDEM, and Dinga Tambi
Publication Date:: 05-2021
Content Type:: Special Report
Institution:: The Nkafu Policy Institute
Abstract:: The Nkafu Policy Institute is delighted to share with you the results of a report that critically appraises the declaration and payment of taxes in Cameroon. Indeed, since 2004 the Doing Business Index (DBI) of the World Bank has been ranking national economies based on their performance in several domains. One of these domains includes the “paying taxes” indicator. It records taxes and mandatory contributions that medium-size companies must pay in a given year and equally measures the administrative burden of paying taxes and contributions and complying with post-filing procedures. Therefore, the weight of the tax burden remains a decisive element in the attractiveness of an economy as it encourages or dissuades national and foreign investors, widens or reduces the tax base, stimulates or refrains entrepreneurship. During the 2009 and 2016 General Census of Enterprises by the National Institute of Statistics, the following key question was asked to top management personnel: “What are the most important obstacles to entrepreneurship in Cameroon?” Taxation was cited as the first major obstacle regardless of cities, according to National Institute of Statistics reports.
Topic:: Economics, Governance, World Bank, Regulation, and Tax Systems
Political Geography:: Africa and Cameroon

464. Could the COVID-19 Crisis Affect Remittances and Labour Supply in ASEAN Economies? Macroeconomic Conjectures Based on the SARS Epidemic

Author:: Alberto Posso
Publication Date:: 04-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: Debates on resilience to economic shocks in the ASEAN region focus on what policymakers can do to mitigate negative impacts associated with financial-economic crises. The COVID-19 pandemic has made it clear that the region is also vulnerable to health-economic crises. This study applies a difference-in-difference strategy to data from the 2003 SARS epidemic to shed light on how a global pandemic can affect labour supply and remittances in ASEAN economies. Findings suggest that even a relatively short-lived epidemic can have long-lasting effects on labour supply.
Topic:: Economics, Labor Issues, Pandemic, COVID-19, and Supply
Political Geography:: Asia and Southeast Asia

465. Exploring Digital Economic Agreements to Promote Digital Connectivity in ASEAN

Author:: Sarah Y. Tong, Yao Li, and Tuan Yuen Kong
Publication Date:: 07-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper explores modules and articles on cooperation concerning the digital economy that are applicable for Association of Southeast Asian Nations (ASEAN) countries under certain circumstances. It investigates the progress of and obstacles to ASEAN’s digital connectivity, as well as features of existing Digital Economic Agreements and digital economy-related articles in other agreements. We propose the use of a differentiated strategy and steps to promote integration for ASEAN countries covered in this research.
Topic:: Economics, Globalization, International Trade and Finance, Digital Economy, and Digitalization
Political Geography:: Asia and Southeast Asia

466. Effective Rates of Protection in a World With Non-Tariff Measures and Supply Chains: Evidence from ASEAN

Author:: Ben Shepherd
Publication Date:: 08-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The concept of effective rate of protection expresses protection on a sector’s final output relative to protection affecting its inputs. As such, it is well adapted to analysing the effects of trade policy from a supply chain standpoint. This paper makes two contributions to the literature on effective rates of protection. First, it draws on the literature on trade in value added to highlight an alternative to the traditional measure that better accounts for supply chain trade by considering both direct and indirect input use. Second, it includes data on ad valorem equivalents of non-tariff measures, which are increasingly important as trade policy instruments. In an analysis covering 17 aggregate goods sectors, I find that average tariff only effective rates of protection in ASEAN averaged 6.9% and ranged from zero to 23.4% in 2018. By contrast, effective rates including non-tariff measures averaged 14.0% and ranged from –6.2% to 44.0%. While patterns of escalation and even effective taxation differ substantially across sectors, most countries practice a tariff and NTM trade policy that is broadly neutral between input and output sectors, but which causes low to moderate isolation from world markets. Given the complexity of tariffs and NTMs from a supply chain perspective, there would likely be reductions in economic waste accompanying substantial simplification.
Topic:: Economics, Globalization, International Cooperation, International Trade and Finance, Protectionism, Non-Tariff Measures, and Supply Chains
Political Geography:: Asia and Southeast Asia

467. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia

Author:: Yan Lili Ing and Junianto James Losarili
Publication Date:: 08-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
Topic:: Economics, International Cooperation, International Trade and Finance, European Union, and Investment
Political Geography:: China, Europe, Indonesia, and Asia

468. The Trade Restrictiveness Index and Its Impact on Trade Performance in Selected East Asian Countries

Author:: Norlin Khalid, Muhamad Rias K.V. Zainuddin, Tamat Sarmidi, Sufian Jusoh, Faliq Razak, and Mohd Helmi Ali
Publication Date:: 09-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper aims to investigate the effect of non-tariff measures (NTMs) on trade in selected East Asian countries. In doing so, we first estimate the ad valorem equivalent (AVE) of NTMs and construct an augmented trade restrictiveness index (ATRI) by measuring the overall external regulations imposed by importing countries. Second, we analyse the effect of the AVE and trade restrictiveness index (TRI) of importing nations on the exports of various sub-sector products for each country in selected East Asian countries. Based on a standard gravity model framework, we perform a Poisson pseudo maximum likelihood (PPML) regression at the sectoral level (Harmonized System 2-digit) for total exports and major sub-sectors (agri-food, health, logistics, and manufacturing). The findings show that the ATRI has a negative and significant relationship towards bilateral exports for total exports, manufacturing, and logistics sub-sectors. The negative impacts of the ATRI also highlight that trade barriers play a significant role in bilateral exports. NTM restrictions (proxied by the calculated AVE of NTMs) imposed by importing countries have mixed results for technical and non-technical measures. Where technical measures have negative and significant impacts on bilateral exports for total exports, manufacturing, and health sub-sectors. This implies that implementation of technical NTMs such as sanitary and phytosanitary (SPS) and technical barrier to trade (TBT) measures in importing nations adversely affect bilateral exports for these sub-sectors. This is in line with our hypothesis, as exporters may face difficulties in meeting the current NTM specifications, leading to lower bilateral exports. In addition, the results show that most trade agreements have a positive and significant relationship with ASEAN and East Asia countries’ bilateral exports, suggesting that free trade agreements enhance trade between countries.
Topic:: Economics, Globalization, International Trade and Finance, and Non-Tariff Measures
Political Geography:: East Asia and Asia

469. Regulatory Distance, Margins of Trade, and Regional Integration: The Case of the ASEAN+5

Author:: Chandran Govindaraju, Neil Foster-McGregor, and Evelyn Shyamala Devadason
Publication Date:: 09-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper measures regulatory distance in non-tariff measures (NTMs) to examine the regulatory distance patterns and how the margins of trade respond to regulatory distance for the ASEAN+5 economies (the 10 Association of Southeast Asian Nations Member States plus Australia, China, India, Japan and New Zealand). It decomposes the margins of trade and regulatory distance by sector (agriculture and manufacturing) and NTM type (technical, non-technical, sanitary and phytosanitary (SPS), technical barriers to trade (TBTs), and pre-shipment inspections and other measures) for the 15 countries. At the country level, the results indicate a varying regulatory distance amongst the ASEAN+5 countries. Regulatory implementation also varies by sector and by the type of measure. Within sectors, SPS regulatory distance is higher in the agriculture sector, while for manufacturing, the regulatory distance in TBTs is higher. Notably, few countries recorded a higher regulatory distance for non-technical measures and pre-shipment inspections. Interestingly, for the ASEAN region, there seems to be no evidence supporting a reduction in regulatory distance from 2015 to 2018, despite efforts to harmonise NTMs since 2015. The results indicate that regulatory distance largely has a trade-reducing effect along the trade margins within ASEAN+5 bilateral trade. Technical measures have a greater trade-reducing effect than other measures along extensive and intensive trade margins – specifically SPS in the agriculture sector and TBTs in the manufacturing sector. Notably, there is also evidence of non-technical measures and pre-shipments and other formalities impacting trade along extensive margins, despite efforts to establish trade facilitation. The paper also describes some policy implications.
Topic:: Economics, International Cooperation, International Trade and Finance, Regulation, and Regional Integration
Political Geography:: Asia and Southeast Asia

470. The Global Economic Impact of the COVID-19 Pandemic: The Second Wave and Policy Implications

Author:: Gyeong Lyeob Cho, Minsuk Kim, and Yun Kyung Kim
Publication Date:: 09-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper examines the macroeconomic impact of the COVID-19 pandemic through the Computable General Equilibrium model. Due to a second wave and a subsequent delay in economic recovery, the pandemic could lead to a permanent shock in capital accumulation and productivity. This implies that the shock may not merely affect the short-term growth rate but also negatively impact the future economic growth path from its pre-pandemic trend. Through simulations, in the mild scenario, countries lose 0.10% to 0.31% of their future economic growth rates; in the severe scenario, they lose 0.21% to 0.69%.
Topic:: Economics, Globalization, International Trade and Finance, Public Health, Pandemic, and COVID-19
Political Geography:: Global Focus

471. Spillover Effects of Social and Economic Interactions on COVID-19 Pandemic Vulnerability Across Indonesia’s Regions

Author:: Ernawati Pasaribu, Puguh B. Irawan, Tiodora H. Siagian, Ika Yuni Wulansari, and Robert Kurniawan
Publication Date:: 10-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This research study focuses on measuring the possible spillover effects of socio-economic interactions on COVID-19 pandemic vulnerability across Indonesia’s regions by utilising a spatial simultaneous model. The COVID-19 pandemic vulnerability level here is used to indicate the extent to which a region is susceptible to the spreading COVID-19 pandemic, as determined by not only the region’s COVID-19 related epidemiological factors but also by its relevant socio-demographic and economic aspects, housing, environmental health, and availability of health facilities. High COVID-19 pandemic vulnerability levels were mostly found in districts in Java Island and southern Sumatera, suggesting high population density and mobility in both regions. It was revealed that 31 districts have low COVID-19 risk levels (from epidemiological indicators-related measurements), but they have high COVID-19 vulnerability levels (from epidemiological and socioeconomic indicators-based measurements). Labour productivity was found to have a reciprocal relationship with COVID-19 vulnerability, proving that the COVID-19 pandemic has a significant impact on labour productivity and vice versa. On the other hand, regional independence affects COVID-19 vulnerability, but this does not apply the other way around. Moreover, this study has also proven that COVID-19 pandemic vulnerability levels have socio-economic spillover effects on neighbouring areas in Indonesia.
Topic:: Economics, International Cooperation, Pandemic, COVID-19, Socioeconomics, and Economic Integration
Political Geography:: Indonesia and Asia

472. The Divide between Economic History and History: From Ideology to Methodology

Author:: Gavin Wright
Publication Date:: 03-2021
Content Type:: Policy Brief
Institution:: Economics for Inclusive Prosperity (EfIP)
Abstract:: I attended grad school at Yale in the late 1960s, when the New Economic History was on the ascendancy. Although the NEH was mainly in economics, the broader field of economic history clearly included members of both parent disciplines. At Yale, history grad students like Jan de Vries and Fred Carstensen could do an economic history track by taking a few core econ courses. There was also fair amount of common cause with a movement called the New Social History, interested in pursuing quantification to write “history from the bottom up.” Membership and presidents of the Economic History Association were about equally divided between the two disciplines. When I started at Michigan in 1972, there were two card-carrying economic historians in the history department (Sylvia Thrupp and Jacob Price), and similar lineups were not unusual elsewhere. The era of coexistence came to an abrupt end with the publication of Time on the Cross by Fogel and Engerman in 1974. The book was controversial not just because of its claims about slavery in the United States — that slavery was efficient, productive, and not all bad for the slaves — but because these claims were presented as a summation of research by cliometric economic historians over the previous decade or more. Even though some of the most robust critiques came from within economic history — consolidated in Reckoning with Slavery, published in 1976 — many historians felt that any discipline that could generate such an offensive brand of history did not deserve respectful intellectual status. In truth, History was probably going its own way towards the “cultural turn” anyway. To the extent that economic history had something to do with this move, it would have been a reaction to the observation that much of the new work seemed drawn moth-like to the discovery of markets and market processes in history, concluding that “markets worked.” Bill Parker remarked on this tendency in his presidential address to the EHA: “From Old to New to Old in Economic History” (JEH 1971), describing the NEH as “a gigantic test of the hypothesis of economic rationality of a system and of the behavior of individuals within it.” Robert Lucas wrote: “The central lesson of research in economic history is that neoclassical economics applies anytime, anywhere.” This now seems like something of a caricature, but for the NEH roughly through the 1970s, Lucas was largely correct. A case in point that mattered to many historians was the agricultural regime of the postbellum South. Works published in the 1970s by Joseph Reid, Stephen DeCanio and Robert Higgs all concluded that sharecropping was not an exploitive economic form, and that any racial oppression that did occur was rooted in politics rather than markets. Small wonder that historians found little to attract them to this style of research.
Topic:: Economics, Education, History, Slavery, Ideology, and Macroeconomics
Political Geography:: United States

473. A Policy Matrix for Inclusive Prosperity

Author:: Dani Rodrik and Stefanie Stantcheva
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: Economics for Inclusive Prosperity (EfIP)
Abstract:: One of the biggest challenges that countries face today is the very unequal distributions of opportunities, resources, income and wealth across people. Inclusive prosperity – whereby many people from different backgrounds can benefit from economic growth, new technologies, and the fruits of globalization – remains elusive. To address these issues, societies face choices among many different policies and institutional arrangements to try to ensure a proper supply of productive jobs and activities, as well as access to education, financial means, and other endowments that prepare individuals for their participation in the economy. In this paper we offer a simple, organizing framework to think about policies for inclusive prosperity. We provide a comprehensive taxonomy of policies, distinguishing among the types of inequality they address and the stages of the economy where the intervention takes place. The taxonomy clarifies the differences among contending approaches to equity and inclusion and can help analysts assess the impacts and implications of different policies and identify potential gaps.
Topic:: Economics, Labor Issues, Economic Inequality, Macroeconomics, Job Creation, Polarization, Productivity, Inclusion, Workforce, and Production
Political Geography:: United States

474. Majoritarian versus Proportional Representation Voting

Author:: Ethan Kaplan
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: Economics for Inclusive Prosperity (EfIP)
Abstract:: What kind of voting system should countries have? This policy brief discusses the two main electoral systems in modern political democracies. It makes an argument that majoritarian systems such as what exists in the United States fail to properly represent voters. It suggests replacing the U.S. majoritarian political system with a proportional representation system and shows how this could be done within the context of current U.S. law. Both economists and political scientists have worked on the impact of electoral systems. Empirical methods from economics as well as economic analysis of the incentives created by different political systems have contributed to our understanding of the consequences of electoral systems on representation. Additionally, economists have estimated the impact of electoral system on fiscal expenditures, something we will discuss towards the end of the policy brief. There are two main voting systems in modern democratic societies: majoritarian systems and proportional representation systems. Federal voting in the United States is majoritarian though some states such as Maryland have proportional representation at the state level. In a majoritarian system, also known as a winner-take-all system or a first-past-the-post system, the country is divided up into districts. Politicians then compete for individual district seats. The candidate who receives the highest vote share wins the election and represents the district.
Topic:: Economics, Democracy, Representation, Macroeconomics, Voting, and Electoral Systems
Political Geography:: United States

475. EfIP Online Panel: A New Macroeconomics?

Author:: Jón Steinsson
Publication Date:: 07-2021
Content Type:: Policy Brief
Institution:: Economics for Inclusive Prosperity (EfIP)
Abstract:: There is a narrative within our field that macroeconomics has lost its way. While I have some sympathy with this narrative, I think it is a better description of the field 10 years ago than of the field today. Today, macroeconomics is in the process of regaining its footing. Because of this, in my view, the state of macroeconomics is actually better than it has been for quite some time. The most important problem with macro over the past few decades has been that it has been too theoretical. When I say this, I don‘t at all mean to say that theory is useless. To the contrary, theory is an essential element of a healthy science. But a healthy science needs a balance between theory and empirical work. Macro lost this balance in the 1980s and is only regaining it now. Most narratives about the evolution of macro focus on the evolution of macroeconomic theory and the rational expectations revolution in particular. An under-appreciated part of this story is that the rational expectations revolution shifted the field away from empirical work. This was partly because building models that met the higher standards of rigor set by Lucas and his co-revolutionaries was a challenging and therefore highly absorbing task. But that isn’t the only reason. For reasons that are not entirely clear to me, a very substantial fraction of macroeconomists came to believe that the Lucas critique implied that quasi-experimental empirical methods could not be used in macro. The idea that changes in policy could radically alter empirical regularities (i.e., the Lucas critique) somehow came to be interpreted to mean that the only way to do empirical work in macro was to write down fully specified general equilibrium models of the whole economy and evaluate the entire model (either by full-information inference methods or moment matching). Sargent, for example, placed enormous emphasis on the idea of “cross-equation restrictions.“ It seems that this line of thinking led large numbers of macroeconomists astray in terms of how to think about empirical work in macro for several decades.
Topic:: Economics, Political Economy, and Macroeconomics
Political Geography:: United States

476. New Directions in Macroeconomics

Author:: Gillian Brunet
Publication Date:: 07-2021
Content Type:: Policy Brief
Institution:: Economics for Inclusive Prosperity (EfIP)
Abstract:: Without being overly prescriptive, macro research must meet two standards to keep the field moving in a productive direction: models must be tested empirically and researchers must think carefully about how underlying assumptions restrict the set of questions that can be answered with a given model. Models move knowledge forward through rigorous empirical testing. Matching moments in model calibration is not enough—nor should it be considered true empirics. When economics is done well, theory and empirics are complements: empirical research disciplines models and theory disciplines empirical research. In recent decades, macro research has tilted very heavily towards theory, forgoing the feedback generated by rigorous empirical testing and, as a consequence, dramatically reducing the ratio of insight to effort. Macro as a field must value empirical contributions to flourish fully. There has been significant progress in the last decade, but the balance still tilts heavily towards theory. Macroeconomists must stop dismissing empirical contributions as trivial for macro theory to reach its potential. It’s not an accident that many of today’s best macroeconomists stand out for their work in both theory and empirics: empirical work disciplines their theoretical research. Over the past 40-50 years, research in short-run macroeconomics has focused on the goal of creating unified, internally consistent models of the macroeconomy. While this is a worthy goal, it has perhaps become too dominant—and imposes hidden costs on research. The emphasis on developing a central baseline model to which idiosyncratic features are added for addressing a specific problem discourages many researchers from considering the suitability of the underlying model to the specific question being asked. As economists we are taught that every model is a simplification, so that the relevant question is not whether a model is good or bad but whether it is good or bad for answering a specific question. Yet choosing a single baseline model of the macroeconomy tends to obscure the closeness of the relationship between the model and the question it is used to answer. Often macroeconomists think carefully about the relationship between their question and the idiosyncratic features they add to the baseline model, but many of the assumptions underlying the baseline model become invisible and thus unquestioned. This is understandable given the complexity of modern macro models, but it has high costs. More careful consideration of the assumptions underlying baseline models and their appropriateness to individual research questions can help move the field forward.
Topic:: Economics, Political Economy, Macroeconomics, and Models
Political Geography:: United States

477. China's Ties with Southeast Asia : From Green Shoots to Sustained Recovery

Author:: Kensuke Tanaka
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: China's rebound happened relatively quickly owing to a large extent to timely macroeconomic policy responses to the crisis. Lagging somewhat behind China, most Southeast Asian countries have now entered the transition from recession to recovery. Some export-dependent Southeast Asian countries shifted their export destination to China to benefit from its early recovery. This switch of export destination to China illustrates China's important role in leading the recovery of the region. Enhancing regional macroeconomic co-operation would help reduce vulnerability of the region and ensure a sustained recovery. Regional macroeconomic co-operation remains at an early stage in Southeast Asia, but possibilities for further co-operation should be explored.
Topic:: Development, Economics, International Cooperation, International Trade and Finance, and Economic Recovery
Political Geography:: China, Asia, and Southeast Asia

478. Better Two Eyes than One: A Synthesis Classification of Exchange Rate Regimes

Author:: Cécile Couharde and Carl Grekou
Publication Date:: 10-2021
Content Type:: Working Paper
Institution:: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:: This paper proposes a new de facto classification of exchange rate regimes, the synthesis classification. The proposed framework has several advantages over existing de facto classifications. First, it offers a unified framework based on the most divergent classifications, the RR and LYS classifications, leading not only to a broader coverage but also to encompass a broad spectrum of exchange systems. Second, it fits better with the known history of exchange rate regimes developments in the post-Bretton Woods era. Among others, it brings an interesting nuance to the so-called hollowing-out hypothesis by showing that the evolution of de facto regimes —especially in emerging economies since the late 1990s— has essentially involved movement toward more tightly “managed” intermediate regimes and not a shift away from such regimes. As an illustration of the insightfulness of our classification, we empirically revisit the nexus between currency crises and exchange rate regimes. In addition to associate a higher probability of currency crisis to both intermediate and floating regimes, our classification, also displays better statistical performances than other classifications in predicting currency crises.
Topic:: Economics, International Cooperation, International Trade and Finance, Exchange Rate Policy, and Currency
Political Geography:: Global Focus

479. Poor Substitutes? Counterfactual methods in IO and Trade compared

Author:: Keith Head and Thierry Mayer
Publication Date:: 12-2021
Content Type:: Working Paper
Institution:: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:: Constant elasticity of substitution (CES) demand for monopolistically competitive firm-varieties is a standard tool for models in international trade and macroeconomics. Inter-variety substitution in this model follows a simple share proportionality rule. In contrast, the standard toolkit in industrial organization (IO) estimates a demand system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO approach comes at the expense of requiring richer data and greater computational challenges. This paper uses the dataset of Berry et al. 1995, who established the modern IO method, to simulate counterfactual trade policy experiments. We use the CES model as an approximation of the more complex underlying demand system and market structure. Although the CES model omits key elements of the data generating process, the errors are offsetting, leading to reasonably accurate counterfactual predictions. For aggregate outcomes, it turns out that incorporating non-unitary pass-through matters more than fixing over-simplified substitution patterns. We do so by extending the commonly used methods of Exact Hat Algebra and tariff elasticity estimation to take into account oligopoly.
Topic:: Economics, Business, Monopoly, Trade, and Models
Political Geography:: Global Focus

480. Long-Term Macroeconomic Projections of the World Economy

Author:: Lionel Fontagné, Erica Perego, and Gianluca Santoni
Publication Date:: 12-2021
Content Type:: Working Paper
Institution:: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:: What will the global economy look like in a generation? The answer depends on the multiple forces driving long-term growth (demography, education, diffusion of technical progress, energy costs, investment and saving behaviour, international capital mobility) and requires a comprehensive framework to conceptualise them. We re-estimate the three-factor (capital, energy, labour) MAcro-econometric model of the Global Economy (MaGE), initially developed by Fouré et al. (2013), with a database covering 170 countries using state-of-the-art methods. We thus establish the long-term structural relationships that drive the dynamics of the World economy. The model projections to 2050 illustrate the expected changes in the World economy and their driving forces. In light of the projected volume of energy consumption, making these projections compatible with climate imperatives calls for increased technology sharing at the international level in order to decouple economic growth from energy use.
Topic:: Economics, Energy Policy, International Trade and Finance, and Macroeconomics
Political Geography:: Global Focus

481. Economic Sanctions as a Tool of China’s Hybrid Strategies

Author:: Rafal Wisniewski
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: Polish Political Science Yearbook
Institution:: Polish Political Science Association (PPSA)
Abstract:: The article aims to analyze the role of economic sanctions in the People’s Republic of China’s overall approach to achieving its security objectives in the international arena. During the last two decades, Beijing used this instrument on numerous occasions to exert pressure on a varied group of actors. China’s current strategy toward a range of disputes and conflicts it is engaged in (the South China Sea territorial disputes most prominently stand out) is often described using the popular vocabulary of “hybrid warfare” or “grey zone conflicts”. Putting the conceptual complications aside, the author agrees that the PRC’s approach can be viewed as part of a growing trend for great powers to employ what can be called “hybrid strategies” toward its opponents. As part of a broader category of economic statecraft, economic sanctions form an important element of this approach. Considering current scholarship on both “hybrid” (or “grey area”) warfare and economic sanctions, the article answers the question of why the PRC increasingly resorts to hybrid strategies (including economic coercion) and identifies the main characteristics of Chinese economic sanctions. It also provides preliminary conclusions on their effectiveness.
Topic:: Diplomacy, Economics, Territorial Disputes, and Sanctions
Political Geography:: China, Asia, and South China Sea

482. The Impact of Conflicts on Natural Resources – The Case of Sudanese Darfur Region

Author:: Nagmeldin Karamalla-Gaiballa
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: Polish Political Science Yearbook
Institution:: Polish Political Science Association (PPSA)
Abstract:: This research paper explores the impact of sociological perspectives on the relationship between natural resources and conflicts. From these theoretical perspectives, many fundamental sources of conflict over natural resources are identified and defined. This research takes the approach of a case study in which the researchers investigate and analyze the sources of conflict happening in the Darfur region of Sudan. This case study explores the demographic changes, economic development, and social inequality among some factors contributing to conflict over resources in this region. The research findings demonstrated that various factors play a vital role in the availability of natural resources, which is the main reason sides other reasons flaring conflict in the Darfur region in Sudan. These factors are related to climate change, destruction of ecosystems, immigration, demographic change, and political changes. Even though various factors could impact the conflict of resources in the Darfur region in Sudan, these researchers focused in this research paper on the sociological perspective only.
Topic:: Development, Economics, Natural Resources, Inequality, and Conflict
Political Geography:: Africa and Sudan

483. Protect, Constrain, Contest: Approaches for coordinated transatlantic economic and technological competition with China

Author:: François Chimits, Ashley T. Lenihan, Jonathan Liebenau, Stephen Paduano, Anthony Vinci, and Peter Watkins
Publication Date:: 01-2021
Content Type:: Special Report
Institution:: LSE IDEAS
Abstract:: The Biden Presidency offers opportunities for a renewed effort at formulating a coordinated allied approach to technological and economic competition with China. The latest report from China Foresight at LSE IDEAS provides a guiding framework for transatlantic coordination, and offers insights into key elements of future cooperation. While challenges abound, the opportunities for action prove just as great in number.
Topic:: Economics, Science and Technology, Transatlantic Relations, and Strategic Competition
Political Geography:: China, Asia, and United States of America

484. UK Economic Diplomacy in the 21st Century: The LSE Economic Diplomacy Commission Final Report

Author:: LSE Economic Diplomacy Commission
Publication Date:: 02-2021
Content Type:: Special Report
Institution:: LSE IDEAS
Abstract:: The LSE Economic Diplomacy Commission was convened in 2019 to establish a strategic direction for a new age of foreign economic policy, to understand the domestic ramifications of changes to the UK’s trade agenda, and to present recommendations that may best advance the UK’s priorities at home and abroad. The aim of the Report is to position the UK optimally in a changed 21st century global economy while maintaining the UK’s support for an open, multilateral trade and rules-based international system. The Report proposes a refined economic diplomacy framework that seeks to balance commercial openness with strategic domestic and foreign policy aims, broadly defined.
Topic:: Foreign Policy, Diplomacy, Economics, and Trade
Political Geography:: United Kingdom and Europe

485. Changing Dynamics of Pak-US Relations and the Challenge of Soft Power

Author:: Moonis Ahmar
Publication Date:: 05-2021
Content Type:: Special Report
Institution:: LSE IDEAS
Abstract:: There is a history of ups and downs in Pak-US relations since early 1950s till today. From the period of alliances to ostensible hostility and indifference, the changing dynamics of Pak-US relations must be analysed from a pragmatic point of view where power, national interests, security and sovereignty matter. Furthermore, mistrust, suspicions, ill-will and paranoia still influence the political, security, economic and power dynamics of relations between Pakistan and the United States. This research follows the theory of soft power due to two main reasons. First, instead of being a ‘patron-client’ relationship, PakUS relations could be transformed by focusing on diplomacy, trade and technology instead of threats and coercion. Second, President Obama’s policy of ‘do more’ for Pakistan in combating terrorism in Afghanistan proved to be counterproductive as anti-Americanism surged in Pakistan. Overcoming the bitterness of the past in Pak-US relations will be a major challenge to the Biden-Harris administration. Moving forward in Pak-US relations will require political will, determination, prudence and trust from both sides. It is up to the leadership from both countries to foster trust and take confidence building measures which can transform their relations from patron-client to partners in progress. Shift from geopolitics to geoeconomics will ensure a win-win situation for both sides in the years to come.
Topic:: Economics, Violent Extremism, Democracy, Geopolitics, and Soft Power
Political Geography:: Pakistan, South Asia, North America, and United States of America

486. The Dragon Lands in Belgrade: The Drivers of Sino-Serbian Partnership

Author:: Vuk Vuksanovic
Publication Date:: 07-2021
Content Type:: Special Report
Institution:: LSE IDEAS
Abstract:: In recent years, the partnership between Serbia and China has been elevated to a historically unprecedented level. This partnership manifests itself through Chinese economic statecraft, technological partnership, security partnership, with political ties reaching an unprecedented degree during the COVID-19 pandemic. However, as Vuk Vuksanovic examines, the future of this partnership will be dependent on the trajectory of China’s relationship with the West. As US-China relations are becoming adversarial, and as China’s relations with the EU are shaken, it will become increasingly difficult and risky for Belgrade to maintain its ties with Beijing. From ‘vaccine diplomacy’ to ‘debt-trap diplomacy’, this Strategic Update examines the Sino-Serbian partnership we are witnessing and what the future has in store for Serbian policymakers.
Topic:: Security, Foreign Policy, Economics, Partnerships, and COVID-19
Political Geography:: China, Asia, and Serbia

487. How Can America Challenge China's Political Ambitions in an Age of Deglobalisation?

Author:: Dimitri Zabelin
Publication Date:: 09-2021
Content Type:: Working Paper
Institution:: LSE IDEAS
Abstract:: COVID-19 has accelerated the trend of deglobalisation and further entrenched China into the growing political and economic fort of Asia. This has made the US less effective at implementing policies aimed at curbing Beijing’s political ambitions and strength in the region. Washington must therefore make itself indispensable in Asia and employ strategies for bringing China into a global network that can collectively reign in the Asian giant’s growing influence.
Topic:: Economics, Politics, Strategic Competition, and COVID-19
Political Geography:: China, Asia, North America, and United States of America

488. Melons as Lemons: Asymmetric Information, Consumer Learning and Seller Reputation

Author:: Jie Bai
Publication Date:: 03-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: There is often a lack of reliable quality provision in many markets in developing countries and firms generally lack a reputation for quality. One potential explanation is that mistrust due to past bad behavior can make reputation-building difficult. I examine this hypothesis in a setting that features typical market conditions in developing countries: the retail watermelon markets in a major Chinese city. I first demonstrate empirically that there is substantial asymmetric information between sellers and buyers on quality and a stark absence of quality premium at baseline. I then randomly introduce one of two branding technologies into 40 out of 60 markets–one sticker label that is widely used and counterfeited and one novel expensive laser-cut label. The experiment findings show that laser-branding induced sellers to provide higher quality and led to higher sales profits. However, after the intervention was withdrawn, all markets reverted back to baseline. I incorporate the experimental variation into an empirical model of consumer learning and seller reputation building. The results suggest that consumers are hesitant to upgrade their perception under stickers, which makes reputation-building a low-return investment. While the new technology enhances learning, the resulting increase in profits is not sufficient to cover the fixed cost of the technology for small individual sellers. Counterfactual analysis shows that information friction and fragmented market lead to significant under-provision of quality.
Topic:: Economics, Markets, and Developing World
Political Geography:: China, Asia, and Global Focus

489. Sorting, Matching and Economic Complexity

Author:: Muhammad A. Yildirim
Publication Date:: 03-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: Assignment models in trade predict that countries with higher productivity levels are assortatively matched to industries that make better use of these higher levels. Here, we assume that the driver of productivity differences is the differential distribution of factors among countries. Utilizing such a structure, we define and estimate the average factor level (AFL) for countries and products using only the information about the production patterns. Interestingly, our estimates coincide with the complexity variables of (Hidalgo and Hausmann, 2009), providing an underlying economic rationale. We show that AFL is highly correlated with country-level characteristics and predictive of future economic growth.
Topic:: Economics, Economic Growth, Trade, Industry, and Productivity
Political Geography:: Global Focus

490. Economic Complexity Report for Western Australia

Author:: Ricardo Hausmann, Eric Protzer, Jorge Tapia, and Ana Grisanti
Publication Date:: 04-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: The Government of Western Australia (WA), acting through its Department of Primary Industries and Regional Development (DPIRD), invited the Growth Lab of the Center for International Development (CID) at Harvard University to partner with the state to better understand and address constraints to economic diversification through a collaborative applied research project. The project seeks to apply growth diagnostic and economic complexity methodologies to inform policy design in order to accelerate productive transformation, economic diversification, and more inclusive and resilient job creation across Western Australia. This Economic Complexity Report is organized in six sections, including this brief introduction. Section 2 explains the methodology of economic complexity, including its theoretical foundations and main concepts, as well as the adjustments that were required to obtain the required export data at a subnational level and incorporate the service sector to the analysis. Section 3 describes the structure of the WA economy, identifying its productive capacities and exploring its complexity profile. This is done at the state, regional, and city levels. Section 4 identifies industries with high potential and organizes them into groupings to capture important patterns among the opportunities. Section 5 contextualizes the opportunities further by identifying relevant viability and attractiveness factors that complement the complexity metrics and consider local conditions, as well as a criterion for regional participation in the state-wide diversification strategy. Finally, Section 6 summarizes the main findings of this report and discusses implications for Government of WA strategy and policy toward capitalizing on these revealed opportunities.
Topic:: Development, Economics, Economic Complexity, and Job Creation
Political Geography:: Australia

491. Western Australia Research Findings and Policy Recommendations

Author:: Ricardo Hausmann, Douglas Barrios, Ana Grisanti, Semiray Kasoolu, Tim O'Brien, Eric Protzer, Rushabh Sanghvi, Nikita Taniparti, and Jorge Tapia
Publication Date:: 04-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: The Government of Western Australia (WA), acting through its Department of Primary Industries and Regional Development (DPIRD), invited the Growth Lab of the Center for International Development at Harvard University to partner with the state to better understand and address constraints to economic diversification through a collaborative applied research project. The project seeks to apply growth diagnostic and economic complexity methodologies to inform policy design in order to accelerate productive transformation, economic diversification, and more inclusive and resilient job creation across Western Australia. This report is organized in six sections, including this brief introduction. Section 2 is an Executive Summary. Section 3 explains the methodologies of Growth Diagnostics and Economic Complexity, including its theoretical foundations and main concepts. Section 4 describes the main findings of the Economic Complexity Report, including a characterization of Western Australia’s complexity profile. This is done at the state, regional, and city levels. Additionally, this section identifies diversification opportunities with high potential and organizes them into groupings to capture important patterns among the opportunities. This section also contextualizes the opportunities further by identifying relevant viability and attractiveness factors that complement the complexity metrics and consider local conditions. Section 5 highlights the main findings of the Growth Perspective Report. This section describes the economic growth process of Western Australia — with a focus on the past two decades — and identifies several issues with the way that growth has occurred. This section highlights three key channels through which negative externalities have manifested: labor market imbalances, pro-cyclicality of fiscal policy, and a misalignment of public goods. The section provides perspectives on the ways in which each of these channels have hampered the quality of growth and explores the deep-rooted factors that underpin these adverse dynamics. Section 6 introduces a policy framework that can be leveraged by WA to capitalize on revealed diversification opportunities and address the factors that impact the quality of the growth process of the state.
Topic:: Economics, Economic Growth, Diversification, and Job Creation
Political Geography:: Australia

492. National Development Delivers: And How! And How?

Author:: Lant Pritchett
Publication Date:: 05-2021
Content Type:: Special Report
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: Core dual ideas of early development economics and practice were that (a) national development was a four-fold transformation of countries towards: (i) a more productive economy, (ii) a more responsive state, (iii) more capable administration, and (iv) a shared identity and equal treatment of citizens and (b) this four-fold transformation of national development would lead to higher levels of human wellbeing. The second idea is strikingly correct: development delivers. National development is empirically necessary for high wellbeing (no country with low levels of national development has high human wellbeing) and also empirically sufficient (no country with high national development has low levels of human wellbeing). Three measures of national development: productive economy, capable administration, and responsive state, explain (essentially) all of the observed variation in an omnibus indicator of wellbeing, the Social Progress Index, which is based on 58 distinct non-economic indicators. How national development delivers on wellbeing varies, in three ways. One, economic growth is much more important for achieving wellbeing at low versus high levels of income. Two, economic growth matters more for “basic needs” than for other dimensions of wellbeing (like social inclusiveness or environmental quality). Three, state capability matters more for wellbeing outcomes that depend on public production than on private goods (and for some wellbeing indicators, like physical safety, for which growth doesn’t matter at all). While these findings may seem too common sense to be worth a paper, national development--and particularly economic growth—is, strangely, under severe challenge as an important and legitimate objective of action within the development industry.
Topic:: Development, Economics, and Economic Growth
Political Geography:: Global Focus

493. Let’s Take the Con Out of Randomized Control Trials in Development: The Puzzles and Paradoxes of External Validity, Empirically Illustrated

Author:: Lant Pritchett
Publication Date:: 05-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: The enthusiasm for the potential of RCTs in development rests in part on the assumption that the use of the rigorous evidence that emerges from an RCT (or from a small set of studies identified as rigorous in a “systematic” review) leads to the adoption of more effective policies, programs or projects. However, the supposed benefits of using rigorous evidence for “evidence based” policy making depend critically on the extent to which there is external validity. If estimates of causal impact or treatment effects that have internal validity (are unbiased) in one context (where the relevant “context” could be country, region, implementing organization, complementary policies, initial conditions, etc.) cannot be applied to another context then applying evidence that is rigorous in one context may actually reduce predictive accuracy in other contexts relative to simple evidence from that context—even if that evidence is biased (Pritchett and Sandefur 2015). Using empirical estimates from a large number of developing countries of the difference in student learning in public and private schools (just as one potential policy application) I show that commonly made assumptions about external validity are, in the face of the actual observed heterogeneity across contexts, both logically incoherent and empirically unhelpful. Logically incoherent, in that it is impossible to reconcile general claims about external validity of rigorous estimates of causal impact and the heterogeneity of the raw facts about differentials. Empirically unhelpful in that using a single (or small set) of rigorous estimates to apply to all other actually leads to a larger root mean square error of prediction of the “true” causal impact across contexts than just using the estimates from non-experimental data from each country. In the data about private and public schools, under plausible assumptions, an exclusive reliance on the rigorous evidence has RMSE three times worse than using the biased OLS result from each context. In making policy decisions one needs to rely on an understanding of the relevant phenomena that encompasses all of the available evidence.
Topic:: Development, Economics, Education, and Public Policy
Political Geography:: Global Focus

494. A Generation of Italian Economists

Author:: Enrico Nano, Ugo Panizza, and Martina Viarengo
Publication Date:: 05-2021
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: We examine the role of financial aid in shaping the formation of human capital in economics. Specifically, we study the impact of a large merit-based scholarship for graduate studies in affecting individuals’ occupational choices, career trajectories, and labor market outcomes of a generation of Italian economists with special focus on gender gaps and the role of social mobility. We construct a unique dataset that combines archival sources and includes microdata for the universe of applicants to the scholarship program and follow these individuals over their professional life. Our unique sample that focuses on the high end of the talent and ability distribution also allows us to analyze the characteristics of top graduates, a group which tends to be under-sampled in most surveys. We discuss five main results. First, women are less likely to be shortlisted for a scholarship as they tend to receive lower scores in the most subjective criteria used in the initial screening of candidates. Second, scholarship winners are much more likely to choose a research career and this effect is larger for women. Third, women who work in Italian universities tend to have less citations than men who work in Italy. However, the citation gender gap is smaller for candidates who received a scholarship. Fourth, women take longer to be promoted to the rank of full professor, even after controlling for academic productivity. Fifth, it is easier to become a high achiever for individuals from households with a lower socio-economic status if they reside in high social mobility provinces. However, high-achievers from lower socio-economic status households face an up-hill battle even in high social mobility provinces.
Topic:: Economics, Education, Gender Issues, Human Capital, Career, and Financial Aid
Political Geography:: Europe and Italy

495. Jordan’s Path in 2021: Trends and Scenarios

Author:: Zaid Eyadat
Publication Date:: 03-2021
Content Type:: Special Report
Institution:: Center for Strategic Studies (CSS)
Abstract:: In an increasingly complex region, Jordan, for decades an oasis of stability, has carved for itself a moderating and stabilizing role in a region that is often viewed as immoderate and unstable [1]. Jordan’s strategy lays with maintaining a leading and peace-making role that has enabled it to limit instability. The Middle East is not getting any simpler. In a region with a complicated history, and distinctive ideologies and sects, geopolitical shifts are inevitable, and predicting the future could be an unattainable goal. Nevertheless, accuracy in reading current geopolitical changes and key trends along with their implications will, and should, help Jordan mitigate risks, maintain stability, and preserve its regional role. The Center for Strategic Studies (CSS) at the University of Jordan, presents potential scenarios to anticipate the future of Jordan and the region, in an attempt to understand the geostrategic and political changes that have occurred or are expected to take place and their impact on Jordan in the years to come. This study, titled “Jordan’s Path in 2021: Trends and Scenarios” aims to reveal the underlying significance and future implications of major emerging internal and regional key trends. It ought to provide correct predictions for shifts in geopolitical power balance, which will help policymakers make informed and knowledgeable decisions. CSS is delighted to share the results of the January survey carried out in 2021 and wishes to thank the 174 experts who participated in it. The results include the experts’ assessment of key trends in Jordan, as well as key trends related to other countries, such as the GCC, Turkey, Israel, Iran, and Egypt. It will be interesting to monitor how the trends play out over the next few months and to assess its precautions on Jordan.
Topic:: Economics, Politics, Geopolitics, Strategic Stability, and Future
Political Geography:: Iran, Turkey, Middle East, Israel, Egypt, Jordan, and Gulf Cooperation Council

496. Does COVID-19 Change the Long-Term Prospects of Latecomer Industrialisation?

Author:: Tilman Altenburg, Clara Brandi, Anna Pegels, Andreas Stamm, Christiaan Vrolijk, and Tina Zintl
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: German Institute of Development and Sustainability (IDOS)
Abstract:: This study explores to what extent the COVID-19 crisis affects the long-term prospects for industrial development. The focus of the study is on latecomer economies – those facing an uphill battle because they joined global markets at a point in time when other economies had already established global production networks. In a first step, we analyse how the prospects for industrialisation are changing, mainly as a consequence of three global megatrends: digitalisation and automation of production; global economic power shifts; and the greening of economies. These trends create new opportunities for latecomer industrialisation, but they also raise entry barriers to markets, especially for country with weak innovation systems. We then explore COVID-19 effects through the analytical lens of the pre-COVID megatrends. While the pandemic has had a severe impact on the world economy, such impacts will not change the ongoing trends fundamentally. The ongoing recovery from COVID-19 is not showing much structural transformation – despite many voices demanding to “build back better”. Yet, the pandemic is accelerating or decelerating some of the previous trends. One is the trend towards online trading. The dominance of international trading platforms may lead to concentration in “upstream” activities such as manufacturing, crowding out weaker market actors. At the same time, platform economies are boosting delivery activities, such as courier services. Another trend that may be accelerated by the pandemic is towards the reshoring of previously offshored productive tasks, yet, evidence here is mixed, and we may see other risk-hedging strategies rather than large-scale reshoring. We may also see the gap between dynamic economies in East/Southeast Asia and other developing regions widening, because the former recovered faster due to vaccination programmes and fiscal stimulus packages. Regarding the greening of economies, some major economies initiated green fiscal stimulus packages, accelerating for example the development of global green hydrogen economy. Also, the trend towards tele-work is reducing emissions from the transport sector. Overall, however, the pandemic does not seem to alter the ongoing, but slow, progress towards greener economies. We conclude with police recommendations in five domains: i) Fostering economic resilience through economic diversification; ii) the need to develop pharmaceutical and medical supply industries in all countries; iii) increased investments in digital capabilities, including the ability to regulate platform economies; iv) strengthening domestic revenue generation to increase policy space and resilience, including pro-environmental fiscal reforms; and v) improving international governance e.g. in the domains of intellectual property rights and technology-sharing.
Topic:: Development, Economics, Governance, Industrialization, Resilience, and COVID-19
Political Geography:: Global Focus

497. Opportunities and Limits of CO2 Recycling in a Circular Carbon Economy: Techno-economics, Critical Infrastructure Needs, and Policy Priorities

Author:: Amar Bhardwaj, Colin McCormick, and Julio Friedmann
Publication Date:: 05-2021
Content Type:: Special Report
Institution:: Center on Global Energy Policy (CGEP), Columbia University
Abstract:: Despite growing efforts to drastically cut carbon dioxide (CO2) emissions and address climate change, energy outlooks project that the world will continue to rely on certain products that are currently carbon-intensive to produce but have limited alternatives, such as aviation fuels and concrete. Recycling CO2 into valuable chemicals, fuels, and materials has emerged as an opportunity to reduce the emissions of these products. In this way, CO2 recycling is a potential cornerstone of a circular carbon economy that can support a net-zero future. However, CO2 recycling processes have largely remained costly and difficult to deploy, underscoring the need for supportive policies informed by analysis of the current state and future challenges of CO2 recycling. This report, part of the Carbon Management Research Initiative at Columbia University’s Center on Global Policy, examines 19 CO2 recycling pathways to understand the opportunities and the technical and economic limits of CO2 recycling products gaining market entry and reaching global scale. The pathways studied consume renewable (low-carbon) electricity and use chemical feedstocks derived from electrochemical pathways powered by renewable energy. Across these CO2 recycling pathways, the authors evaluated current globally representative production costs, sensitivities to cost drivers, carbon abatement potential, critical infrastructure and feedstock needs, and the effect of subsidies. Based on this analysis, the paper concludes with targeted policy recommendations to support CO2 recycling innovation and deployment.
Topic:: Economics, Energy Policy, Infrastructure, Carbon Emissions, and Decarbonization
Political Geography:: Global Focus

498. Energy price hikes: which European solutions?

Author:: Ramona Bloj
Publication Date:: 10-2021
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: As energy prices rise around the world, against the backdrop of the post-Covid economic recovery, the 27 EU leaders discussed what Europe could do to ease the pressure on consumers at the European Council on 21-22 October. The increase in prices is due to a particular international context and is affecting all countries: China is facing electricity shortages in many provinces due to insufficient coal supply, and in the United States the price of natural gas has risen by more than 150% since the beginning of the year. However, this increase raises questions about Europe's energy strategy and its impact on climate objectives, just a few days before the opening of COP26 in Glasgow.
Topic:: Climate Change, Economics, Energy Policy, and COVID-19
Political Geography:: Europe

499. Oil Intensity: The Curiously Steady Decline of Oil in GDP

Author:: Christof Ruhl and Titus Erker
Publication Date:: 09-2021
Content Type:: Special Report
Institution:: Center on Global Energy Policy (CGEP), Columbia University
Abstract:: Oil is the largest primary fuel, and the trajectory of oil consumption is of great concern and consequence for economic, political, and, not least, for climate change reasons. Anticipating oil prices and production from year to year is not easy; identifying even basic ingredients of aggregate demand and supply schedules, such as price or income elasticities, is notoriously difficult. It’s an additional challenge to model the structure of a market that sometimes appears to be highly cartelized, and at other times populated by a large flock of peaceful price takers. But a remarkably steady metric—and possible tool for projecting consumption into the future—has been identified in this paper: oil intensity. Oil intensity is the volume of oil consumed per unit of gross domestic product (GDP). Measured simply in barrels per dollar, it is often viewed as a broad measure of oil efficiency; it certainly demonstrates the importance of oil in a society. The efficiency of oil use has improved, in other words oil intensity has declined, over the years and decades. In 1973, for example, when oil intensity was at its zenith, the world used a little less than one barrel of oil to produce $1,000 worth of GDP (2015 prices). By 2019 (the last data set before Covid) global oil intensity was 0.43 barrel per $1,000 of global GDP—a 56% decline. Oil has become a lot less important and humanity has become more efficient in making use of it. What is worth a closer look, and is the focus of this paper reporting on oil and gas related research at Columbia University’s Center on Global Energy Policy, is the pattern by which this progress has been achieved. Since 1984, oil intensity has fallen every year in an almost perfectly linear fashion: the amount of oil used per dollar of global GDP has dropped by roughly the same amount each year. Wars and revolutions, booms and busts, OPEC successes and failures, and every other monumental event in the last 35 years left their imprint on oil markets but didn’t alter oil intensity’s steady, downward crawl. This kind of regularity is very rare in any long-time trend, in economics or in energy. Although oil intensity isn’t a new topic, an attempt to explain its curiously consistent downward progress—or even any discussion about it—is hard to find in the literature. For this paper, the authors explain the trend and cross-validate its predictive potential before delving into possible reasons behind the linear decline in oil intensity. It finally extrapolates what such a continuing trend might mean for oil consumption and policies around it going forward.
Topic:: Economics, Energy Policy, Oil, Natural Resources, and GDP
Political Geography:: Global Focus

500. Methane Emission Controls: Redesigning EPA Regulations for Greater Efficacy

Author:: Robert Kleinberg
Publication Date:: 10-2021
Content Type:: Commentary and Analysis
Institution:: Center on Global Energy Policy (CGEP), Columbia University
Abstract:: Natural gas holds a critical role in the US energy economy, providing 32 percent of primary energy evenly distributed among electric power generation, industrial use, and residential and commercial consumption (LLNL 2020). As countries set targets to minimize climate change, however, widespread reliance on fossil fuels, with their attendant greenhouse gas emissions, is being scrutinized. Methane, the main constituent of natural gas, is second only to carbon dioxide in its contribution to greenhouse gas warming (Kleinberg 2020). It holds the potential to be a primary driver of global average temperature change between now and 2050—no matter what progress is made in controlling increases of atmospheric carbon dioxide over the next thirty years (Shindell et al. 2012). Half of global methane emissions come from natural sources, such as swamps and seeps, and half from anthropogenic sources, such as agriculture and fossil fuels. Regulations curbing methane emissions from the oil and gas industry are essential to mitigating global climate change over the next three decades. In the United States, current regulations were devised at a time when the technology for the measurement of natural gas emissions was relatively immature. Comprehensive performance-based regulations were not an option, and because of this, many regulations put in place were highly prescriptive. Data show these regulations have been largely ineffective. This commentary examines the potential to reduce emissions of methane from oil and natural gas infrastructure. It begins with a brief history of natural gas regulations and the effectiveness of rulemaking, before exploring unregulated and underregulated sources of methane. This is followed by a discussion about improvements in measurement capabilities and how regulations could be used to more effectively address methane emissions. This work shows the complexities of oil and gas production do not lend themselves to prescriptive regulation. Performance-based regulation, including quantitative compliance monitoring, would engage the talents of thousands of engineers, encouraging them to solve problems using locally appropriate solutions rather than relying on a prescriptive checklist approach that cannot anticipate every eventuality. The key to performance-based regulation is accurate measurement, and this capability has improved rapidly in recent years. Aircraft-based, facility-scale measurements encompassing tens of thousands of facilities spread over tens of thousands of square kilometers are economically viable and increasingly common. Permanently installed continuously monitoring sensors show promise in detecting intermittent sources; oil field pilot studies are underway. However, aircraft- and ground-based facility-scale measurements are not compliant with the current regulatory regime, which focuses on individual components. Therefore, the current regulatory regime must be completely rethought. (A comprehensive exposition of this topic, with evidentiary support, has been submitted to the Environmental Protection Agency [Kleinberg 2021b].)
Topic:: Economics, Energy Policy, Natural Resources, Gas, and Methane
Political Geography:: North America and United States of America

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COLUMBIA UNIVERSITY PRESS