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21. IMF Standby Agreements and Inequality: The Role of Informality

Author:
Ceyhun Elgin and Adem Elveren
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
In this paper we investigate the response of two inequality metrics to different IMF programs. To this end, we use a relatively large annual (unbalanced) cross-country panel dataset that includes the Gini index and the Estimated Household Income Inequality as the two relevant inequality metrics and covers the period from 1950 to 2016 in an annual basis for 159 countries. Our empirical analysis indicates that in countries where the informal sector size (as percentage of GDP) is relatively larger, the extent of income inequality increases after different IMF programs, but particularly so after standby arrangements. However, we also show that the opposite is true, when informal sector size is small, i.e., inequality declines after different IMF programs.
Topic:
Political Economy, Inequality, IMF, and Informal Economy
Political Geography:
Global Focus

22. Dark Spots in the International Commodity Value Chain: The Case of Copper in Zambia

Author:
Dale Mudenda and Léonce Ndikumana
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper investigates mineral export misinvoicing in Zambia as a channel of capital flight, with a focus on copper, gold, and gemstones. The analysis reveals major discrepancies between Zambia’s recorded exports and imports as recorded by its trading partners. In the case of copper, a large share of exports recorded in Zambia as headed to Switzerland does not appear in Swiss imports. The ‘missing copper’ cannot be traced through analysis of trade between Switzerland and its major partners either. Gaps in the opposite direction are observed in Zambia-China trade, suggesting export underinvoicing, a common mechanism of capital flight. These do not offset the gaps observed in mirror trade statistics between Zambia and Switzerland, which remain a mystery. Similarly, whereas the primary destination recorded for Zambian gold exports is South Africa, these do not appear in gold imports recorded by South Africa. The gemstones sector is characterized by high informality that enables smuggling and export underinvoicing. Zambia must implement measures to curb misinvoicing of mineral exports and address structural opacity in the trade value chain if it hopes to maximize the gains from the exploitation of its mineral resources.
Topic:
Political Economy, Commodities, Exports, Global Value Chains, and Minerals
Political Geography:
Africa and Zambia

23. Paying Off Populism: How Regional Policies Affect Voting Behavior

Author:
Robert Gold and Jakob Lehr
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper shows that regional policies can decrease populist support. We focus on the “development objective” (Objective-1) of the European Regional Development Fund (ERDF), meant to support lagging-behind regions. For causal inference, we exploit three sources of quasi-exogenous variation in a Regression-Discontinuity-Design (RDD), a Difference-in- Differences framework (DiD), and with matching techniques. Using NUTS3-level panel data on the outcomes of elections to the EU parliament, observed over the period 1999-2019, we consistently find that Objective-1 transfers reduces the vote share of right-fringe parties by about 2.5 pp. Left-fringe party support is not affected. Complementary analyses of individual-level survey data from the Eurobarometer show that the European Regional Policy increases trust in democratic institutions and decreases discontent with the EU.
Topic:
Political Economy, European Union, Populism, Regional Integration, Currency, and Regional Politics
Political Geography:
Europe

24. Paying Off Populism: EU-Regionalpolitik verringert Unterstützung populistischer Parteien

Author:
Robert Gold and Jakob Lehr
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
How to break the populist wave? With the elections to the European Parliament ahead, and the Presidential Elections in the US looming, this question bothers policymakers in many Western democracies. Our study shows that regional policies effectively decrease populist support. Specifically, EU Regional Policy investing into the development of lagging-behind regions decreases the vote share obtained by right-fringe populist parties by 15–20 percent. Moreover, regional policy investments increase trust in democratic institutions, and decreases discontent with the EU.
Topic:
Political Economy, European Union, Populism, and Regional Integration
Political Geography:
Europe

25. A Political Economy of Zawiya: Armed Groups and Society in a Western Libyan City

Author:
Wolfram Lacher
Publication Date:
03-2024
Content Type:
Special Report
Institution:
Small Arms Survey
Abstract:
Since 2015, the coastal city of Zawiya has witnessed endemic violence, but never an all-out war between its main forces. Due to this, the city has become emblematic of Libya’s power struggles. Despite its significance, however, no in-depth studies exist on its armed groups and their evolution. A Political Economy of Zawiya: Armed Groups and Society in a Western Libyan City—a new report from the Small Arms Survey’s Security Assessment In North Africa (SANA) project—seeks explanations to this puzzle in the economic interests of armed groups and their varying relations with local society, and shows how Zawiya’s armed groups gradually came to take on a particularly abusive and predatory character.
Topic:
Security, Political Economy, Armed Forces, and Society
Political Geography:
Libya, North Africa, and Zawiya

26. A Political Economy of Tripoli’s Abu Salim: The Rise of the Stability Support Apparatus as Hegemon

Author:
Adam Hakan
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
Small Arms Survey
Abstract:
Once a hotbed of pro-Qaddafi resistance, Abu Salim is now a stronghold dominated by Abdelghani al-Kikli (widely known as ‘Ghaniwa’) and his Stability Support Apparatus (SSA). Ghaniwa has consolidated power over Abu Salim—the main southern gateway into the Libyan capital of Tripoli—through violence. A Political Economy of Tripoli’s Abu Salim: The Rise of the Stability Support Apparatus as Hegemon—a new Briefing Paper from the Small Arms Survey’s Security Assessment In North Africa (SANA) project—examines how Ghaniwa’s methods have reshaped Abu Salim’s political economy, and how the hegemonic nature of this military consolidation has allowed the SSA to take on an outsized role in Libya’s broader political and economic spheres.
Topic:
Political Economy, Hegemony, Armed Forces, and Instability
Political Geography:
Libya, North Africa, and Tripoli

27. Financial Turmoil, Uncertainty, and Institutions: Turkey’s Political Economy in Crises

Author:
Serhan Yalçiner
Publication Date:
12-2024
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
Financial turmoil damages national and global economies, but the causes of financial crises vary, with a combination of financial and political factors creating them. By asserting that every financial crisis necessarily involves political aspects, this study aims to certify that the poor policy response of Turkey, which has relied heavily on a “president over institutions” approach, has contributed to the ongoing severe currency and debt crises. Focusing on the two predominantly domestically induced crises of 2001 and 2018, this article analyzes secondary literature and data to put forth a framework that combines the fiscal policy response with a look at the country’s institutional strength and shows how financial uncertainty and instability exacerbated the conditions of the ongoing 2018 crisis. The study also finds that deteriorating political institutions in Turkey, marked by a lack of governmental efficacy that has led to compromised financial and fiscal sustainability, has played a considerable role in the onset of the 2018 crisis.
Topic:
Political Economy, Financial Crisis, Authoritarianism, Institutions, and Democratic Backsliding
Political Geography:
Turkey and Middle East

28. Does Trade Exposure Explain Antiglobalization Votes?

Author:
Antoine Bouët, Anthony Edo, and Charlotte Emlinger
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We investigate the local effects of trade exposure and immigration on voting behavior in France from 1988 to 2022. We use the content of each candidate's manifesto to construct an anti-globalization voting index for each French presidential election. This index shows a significant increase in the anti-globalization positions of candidates, and a growing anti-globalization vote beyond the far right. We show that increasing local exposure to import competition and immigration increases anti-globalization votes, while increasing export exposure reduces them. We also find that imports have different effects depending on the products imported. While exposure to imports of final goods increases anti-globalization voting, exposure to imports of intermediate goods reduces it.
Topic:
Globalization, Political Economy, Immigration, Voting, and Trade
Political Geography:
Europe and France

29. Class and Space in Indian Cities

Author:
Vamsi Vakulabharanam and Sripad Motiram
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Indian cities have always been marked by stark class disparities and these have only become more pronounced in recent decades. Although academic literature has explored class relations (broadly) in Indian cities, there is a dearth of studies that rigorously explore class-space interactions. Given this, we use a socio-spatial methodology, a rigorous class scheme, and data from a spatially representative survey from Hyderabad and Mumbai that we specially designed to explore city spaces. We use three different notions of space: residence, work, and commuting, and present patterns that are not well-known for Indian cities. Along these three spatial dimensions, we show that class and space mutually determine each other. We show that in both cities, the class distribution varies across residential zones, and how a class fares depends upon its zone of residence. Class location also determines whether the work location of an individual is far from the residential location and the extent of commuting. We demonstrate considerable residential coexistence of classes in city neighborhoods. Apart from being an interesting feature of Indian cities, does this coexistence have any implications? We use an instrumental variable regression to show that class-based spatial integration results in higher economic development. Residents of mixed-class neighborhoods, particularly lower-classes, are less likely to be poor and more likely to be better educated, compared to their counterparts living in segregated neighborhoods. Based on this finding, we make a case for a more integrated and egalitarian restructuring of Indian city spaces.
Topic:
Political Economy, Inequality, Class, and Cities
Political Geography:
South Asia and India

30. The Recent Rise of the Far Right and Voters’ Anti-Refugee Attitudes in Europe

Author:
Yoonjung Kim and Nam Seok Kim
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This paper explores the connection between individuals’ barrier preference toward immigration and refugee policy and how they are linked to voting behavior. We use three different datasets to tackle these two questions. We utilize multi-country survey data with abundant information regarding voters’ subjective attitudes toward immigrants to study the determinants of far-right voting in Europe. Notably, even after controlling for education, income level, or current employment status, which represents the human capital endow-ment of natives, industry-level comparative advantage and disadvantage, and political scale from left to right, we still find that a preference for immigration barriers has strong explanatory power for far-right voting behavior. We find that educational attainment and income level are important in explaining vot-ers’ anti-immigration attitudes, as the Heckscher-Ohlin model predicts. On average, voters with higher education and higher income are relatively more open to immigration and aware of their role in the economy. In addition to the cross-country election studies that allow us to study the anti-immigration attitude, we also use election surveys conducted in the Neth-erlands and France to add more details on the role of individual immigration and refugee policy preference in the voting behavior. The election survey on the parliamentary election of the Netherlands provides a special identification approach that is not available in cross-country election surveys. The panel structure of the Dutch survey allows us to observe the voting history of re-spondents in 2012, 2017, 2019, and 2021 parliamentary elections. Using this information, this paper clarifies the characteristics of voters who newly join supporting right-wing populism. In other words, we study determinants of ‘switching’ voting behavior from non-populist parties to right-wing populist parties focusing on the refugee barrier preference. We explore whether atti-tudes towards refugees affect this switching behavior in the politics of the Netherlands. The election survey on French voters covers the most recent presidential election in France. We elaborate on how immigration policy pref-erences of French voters are related with the popularity of right-wing popu-list presidential candidates in France. Considering that non-economic factors contribute to explaining the far-right voting behavior, utilizing other non-economic variables such as individ-uals’ sentiments towards various entities (including the government, legal sys-tem, and the European Parliament), and subjective evaluation of their own health and happiness can also add explanatory power, as numerous previous findings imply. For systematic consideration of these abundant variables in the ESS data, we use LASSO for variable selection. For this exercise, we con-sider two approaches in selecting the optimal penalty term, namely cross-validation (CV) and Bayesian information criterion (BIC). It is worth high-lighting that almost all of the immigration barrier preference variables are se-lected when using both CV and BIC for variable selection criteria.
Topic:
Political Economy, Refugees, Far Right, and Trade Policy
Political Geography:
Europe