Topic: Political Economy - CIAO Search Results

1. The State of EU-US Digital and Energy Cooperation

Author:: Federica Marconi, Wolfgang Münchau, and Irene Paviotti
Publication Date:: 02-2024
Content Type:: Working Paper
Institution:: Istituto Affari Internazionali
Abstract:: In a time of rapid technological advancements and changing energy paradigms, the European Union and the United States are trying to coordinate their efforts to navigate the complexities of an ever-evolving landscape. Transatlantic dialogues and cooperative endeavours are key mechanisms for mitigating tensions and fostering a common assessment of the opportunities and risks arising from these advancements. Critical in this regard are the problems of governance emanating from technological development and its consequences in the digital sphere as well as the delicate balance between security, competitiveness and environmental targets in the energy dimension.
Topic:: Climate Change, International Cooperation, Political Economy, Governance, European Union, Transatlantic Relations, Digital Policy, and Energy
Political Geography:: Europe, North America, and United States of America

2. The Invisible Leverage of the Top 1 Percent: Absentee Debtors and Their Hedge Funds

Author:: Stefano Sgambati
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: City Political Economy Research Centre (CITYPERC), University of London
Abstract:: The existing literature on finance, debt and inequality depicts economic elites as a creditor class. According to a popular thesis, over the past four decades, the rich and ultra-rich households in the top 1 percent have experienced a saving glut (excess income), which they have invested in the debts of the poor and their governments. While it is undeniable that the rich have expanded their income share at the expenses of the poor, to refer to them as ‘creditors’ or ‘lenders’ is a misrepresentation of how they actually expand their wealth and income shares by financial means. For it conceals the fact that a great deal of their investments is leveraged, that is, carried out with borrowed money. This article shows that the debts generated by individuals and households in the top 1 percent easily surpass those of all other households and even exceed those of the most indebted states in the world. However, these debts are hard to estimate, and indeed they are not accounted for in statistics on household debt. This is because households in the top 1 percent do not borrow from banks, like normal households do, but they are instead absentee debtors who borrow through the hedge funds, private equity firms, personal investment trusts, and big banks of which they are dominant shareholders and ultimate beneficiaries. To gain an insight into their invisible leverage, the article looks at how much hedge funds borrow, and why their leverage matters.
Topic:: Debt, Political Economy, Inequality, Finance, Elites, Hedge Funds, and Leverage
Political Geography:: Global Focus

3. Freedom of Association as a Key Aspect of Human Capital Management

Author:: Lenore Palladino
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Employee freedom of association— the right of workers to form and join organizations of their own choosing— is a fundamental human right that has been consistently disrespected by large U.S. employers (Economic Policy Institute 2019; International Labour Organization 2022). Freedom of association requires employers to refrain from discouraging employees’ right to organize but is routinely violated without meaningful penalty. In over forty percent of union election campaigns, employers face charges for violating employees’ right to organize—which does not include cases where no charges are filed (Economic Policy Institute 2019). The recent wave of well-known companies like Amazon and Starbucks blatantly engaging in practices to discourage their workers from forming unions has seen new challenges from the Biden National Labor Relations Board, but labor law in the United States does not adequately protect the right to freedom of association, and a change in political leadership could give companies carte blanche to override workers' rights (Clean Slate 2022). Companies can choose to establish corporate policies to respect employee freedom of association rights and can engage in behavior demonstrating their commitment to respecting this fundamental human right as part of their approach to Human Capital Management. This article focuses on two aspects of freedom of association as an aspect of Human Capital Management. The first is to examine what kinds of corporate policies exist to clarify corporate standards of conduct when employees are engaged in organizing activity. What kinds of policies focus on compliance with the minimal standards in U.S. labor law, and what policies comply with international norms as enshrined in ILO Conventions 87 and 98? The second prong of the article looks at negative ramifications for corporate value when companies do not respect workers' freedom of association and such behavior becomes public. What is the effect on customer attitudes, how is management behavior becoming increasingly visible, and what ramifications might this have for institutional investors?
Topic:: Political Economy, Employment, Human Capital, Labor Rights, Business Management, and Freedom of Association
Political Geography:: North America and United States of America

4. The Economy in its Labyrinth: A Structuralist View of the Mexican Economy in the 21st Century

Author:: Liz Monroy Gomez Franco
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: In this paper, I analyze the performance of the Mexican economy during the two decades of the 21st century. I focus on the aggregate and sectoral dynamics of the economy to understand the underlying dynamics behind the aggregate performance of the economy. With these results in mind, I analyze the changes and continuities in the conduction of macroeconomic and labor market policy with the arrival of a new administration in 2018. The goal of analyzing both elements is to provide an integrated view of the situation in which the Mexican economy will face three structural challenges: the medium and long-run effects of the COVID-19 pandemic, the integration of artificial intelligence into the production process, and climate change.
Topic:: Climate Change, Political Economy, History, Macroeconomics, Artificial Intelligence, COVID-19, and Labor Market
Political Geography:: North America and Mexico

5. 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

6. 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

7. Navigating the treacherous political economy of structural reform

Author:: Davide Furceri, Jonathan Ostry, and Chris Papageorgiou
Publication Date:: 05-2024
Content Type:: Working Paper
Institution:: Bruegel
Abstract:: We examine the economic and electoral effects of liberalisation measures using newly-constructed databases on structural economic reforms and the outcome of democratic elections since the 1970s. The data shows a remarkable slowdown in the pace of liberalisation in both advanced and emerging market and developing countries since the 1990s. A debate has emerged about the causes of this slowdown, including the possibility that reforms do not deliver the economic benefits that advocates, including the multilateral financial institutions, trumpeted. Some have pointed to the fact that the current and previous United States administrations have abandoned neoliberal policies in favour of more government intervention in the economy, and the effect has been globally contagious. Our empirical analysis suggests that the growth dividend from liberalisation is economically and statistically significant, but it emerges only slowly over time. Because of this delay, liberalising reforms are costly to democratic incumbents when they are implemented close to elections. Reforms may generate immediate concentrated losses, which elicit an electoral backlash, especially when the aggregate gains are only visible several years after the reform’s implementation. The electoral penalty is also sensitive to overall business-cycle conditions, being much larger when an economy is in recession. Electoral effects also differ depending on the type of reform. Notably, financial reforms generate more perceptible growth-equity trade-offs than real-economy reforms, especially when implemented during weak economic conditions. The political economy of reform is treacherous. To avoid adverse electoral effects, timing reform early in the electoral term and when business-cycle conditions are favourable is critical. So too is avoiding reforms that generate large distributional costs in the face of small aggregate gains (an adverse growth-equity trade-off). Focusing on these considerations is critical to reinvigorate support for structural reform.
Topic:: Economics, Political Economy, Reform, Elections, and Liberalization
Political Geography:: Global Focus

8. Talking Exports: The Representation of Germany’s Current Account in Newspaper Media

Author:: Andreas Maschke
Publication Date:: 01-2024
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: Contents 1 Introduction 2 Germany’s export-led growth model 3 Sustainability of growth models: Growth coalitions and public discourse 4 Analysing the discourse surrounding Germany’s current account surplus 5 Results Quantitative analysis Qualitative analysis 6 Discussion of results 7 Conclusion Appendix References
Topic:: Political Economy, Media, News Analysis, Economic Growth, and Discourse
Political Geography:: Europe and Germany

9. 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

10. 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

11. 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

12. 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

13. Rethinking Monopoly as a Power Relation: The Shift from Market to Intellectual Monopoly

Author:: Cecilia Rikap
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: City Political Economy Research Centre (CITYPERC), University of London
Abstract:: The critical literature on monopolies, from monopoly capital to recent contributions, focuses on the organization that concentrates either market power, capital or property rights. I complement this literature by conceptualizing monopolies as a power relation, which enables me to integrate different ways in which the term is used, from capitalists’ monopoly over the means of production to intellectual monopolization. As I explain here, some firms have developed greater capacities to systematically monopolize intangibles that are essential for organizing labour beyond their owned assets and for controlling demand. Coupled with institutional, political and technological changes, larger absorptive and management capacities to produce and capture knowledge and information resulted in firms’ technological differentiation. The systematic winners of the innovation race hold persistent intellectual monopolies while other firms become subordinate due to their lack of technical autonomy. From this perspective, (intellectual) monopoly power is essential for understanding the distribution of value in capitalism.
Topic:: Political Economy, Labor Issues, Capitalism, Monopoly, Capital, Power Relations, and Value Capture
Political Geography:: Global Focus

14. Fossil Fuel Industry Phase-Out and Just Transition: Designing Policies to Protect Workers’ Living Standards

Author:: Robert Pollin
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: This paper focuses on just transition policies targeted at supporting workers now employed in the fossil fuel industries and ancillary sectors within high-income economies. As a general normative principle, I argue that the overarching aim of such policies should be to protect workers against major losses in their living standards resulting through the fossil fuel industry phase-out. The impacted workers should be provided with three critical guarantees to accomplish this, in the area of jobs, compensation and pensions. Just transition policies should also support workers in the areas of job search, retraining and relocation, but these forms of support should be understood as supplementary. Within the framework of these broad principles, the paper first reviews experiences with transitional policies in Germany, the UK, the EU and, more briefly, Japan and Canada. A critical point that emerges is that these just transition policies do not provide the needed guarantees for assuring workers that they will not experience major living standard declines. The paper then describe an illustrative just transition program for workers that includes reemployment, income and pension guarantees, focusing on a case study for the U.S. state of West Virginia. The results show that the costs of the just transition program for West Virginia’s fossil fuel industry dependent workers will amount to an annual average of about $42,000 per worker, equal to about 0.2 percent of West Virginia’s GDP. I briefly summarize results from the seven other studies of U.S. states and for the overall U.S. economy. For the U.S. economy overall, the just transition program’s costs would total to about 0.015 percent of GDP. These findings demonstrate that providing a generous just transition program does not entail unaffordable levels of public spending. Robust just transition policies should therefore be understood as an entirely realistic prospect for all high-income economies.
Topic:: Political Economy, Labor Issues, European Union, GDP, Economy, and Fossil Fuels
Political Geography:: Japan, United Kingdom, Europe, Canada, and Germany

15. The Political Economy of the Cost of Living Crisis in the UK: What Is to Be Done?

Author:: Ozlem Onaran
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: This paper analyzes the political economy of the cost of living crisis in the context of the United Kingdom. The paper presents the long-term trends in the wage share, wealth inequality, labour’s bargaining power, and real wages in the UK. The first and second waves of inflation in 2021-22 are discussed presenting the trends in the profit margins. The policy responses by the conservative governments and the Bank of England are analyzed, and their limitations are assessed. The paper concludes with short-run and medium-run policy alternatives to the cost of living crisis
Topic:: Political Economy, Labor Issues, Inequality, Inflation, and Cost of Living
Political Geography:: United Kingdom and Europe

16. Sellers’ Inflation, Profits, and Conflict: Why Can Large Firms Hike Prices in an Emergency?

Author:: Isabella Weber and Evan Wasner
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: The dominant view of inflation holds that it is macroeconomic in origin and must always be tackled with macroeconomic tightening. In contrast, we argue that the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices. Such firms are price makers, but they only engage in price hikes if they expect their competitors to do the same. This requires an implicit agreement which can be coordinated by sector-wide cost shocks and supply bottlenecks. We review the long-standing literature on price-setting in concentrated markets and survey earnings calls and compile firm-level data to derive a three-stage heuristic of the inflationary process: (1) Rising prices in systemically significant upstream sectors due to commodity market dynamics or bottlenecks create windfall profits and provide an impulse for further price hikes. (2) To protect profit margins from rising costs, downstream sectors propagate, or in cases of temporary monopolies due to bottlenecks, amplify price pressures. (3) Labor responds by trying to fend off real wage declines in the conflict stage. We argue that such sellers’ inflation generates a general price rise which may be transitory, but can also lead to self-sustaining inflationary spirals under certain conditions. Policy should aim to contain price hikes at the impulse stage to prevent inflation from the onset.
Topic:: Political Economy, Inflation, Profit, and COVID-19
Political Geography:: Global Focus

17. The Cross-Border Interbank Payment System: A Case Study in Chinese Economic Leadership

Author:: Aidan Campbell
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Investigations seeking to explain the rise of China rarely investigate the many new institutions founded to increase China’s economic success and influence over global affairs. In the economic sector, some better-known projects include the Belt and Road Initiative, the Asian Infrastructure Investment Bank, and the New Development Bank. One of the newest and least understood institutions founded to promote international use of the RMB is the Cross-Border Interbank Payment System (CIPS). The purpose of this research is to examine the development, policies, and goals of CIPS in order to better understand the phenomenon of Chinese-lead international economic institutions. Novel evidence for CIPS’s intention to adopt blockchain technology and provide services for currencies other than the RMB is presented. The conclusion to this research is that CIPS is presently too small to pose a threat to the existing SWIFT network or predominance of US dollar transactions in international trade. At the same time, CIPS evidences a patient and rational strategy designed to reform international norms and patterns of trade to China’s advantage in the long term.
Topic:: Political Economy, Leadership, Economy, Belt and Road Initiative (BRI), and Banking
Political Geography:: China and Asia

18. Federal Reserve Anti-Inflation Policy: Wealth Protection for the 1%?

Author:: Aaron Medlin and Gerald Epstein
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: The Federal Reserve has a dual mandate from Congress that directs it to conduct monetary policy as such to achieve “maximum employment” and “stable prices.” Yet the U.S. central bank typically chooses to address inflation as a top priority and focuses on employment only secondarily, if at all. Why? In this paper we argue that an important reason is that the Federal Reserve conducts policy so as protect the real wealth of the top 1% of the wealth distribution. We focus on the Fed’s fight against inflation in 2021-2022, when it rapidly raised its policy interest rates by almost 4 percentage points in the face of more than 6 percent inflation. Using a novel econometric analysis, we provide evidence that shows that this policy serves as a real net wealth protection policy for the 1% by restoring some of the lost wealth that they would otherwise lose due to unexpected inflation. The results of this policy for the top 10% of the wealth distribution are econometrically ambiguous. But to the extent that the Fed’s high interest rates generate higher unemployment or even a recession, this wealth protection for the 1% could have serious income costs for workers who find themselves or another member of their household out of a job.
Topic:: Political Economy, Monetary Policy, Inflation, Elites, and Wealth
Political Geography:: North America and United States of America

19. State Capitalism, Imperialism, and China: Bringing History Back In

Author:: Isabella Weber
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: State capitalism is experiencing a great revival as a term to capture the current capitalist constellations, increasingly replacing neoliberalism. Unlike neoliberalism, however, the term state capitalism has a long history reaching back to the age of imperialism in the late 19th century. While state capitalism has been used as a pejorative term by Marxists, liberals and neoliberals alike, it has served as a programmatic label for developmentalist and neomercantilist projects in reaction to imperialism in the periphery. This paper argues that we need to bring the intellectual history of state capitalism into the ‘new state capitalism’ debate. China has played a major role in the revival of state capitalism in the social sciences, but the long history of China’s engagement with state capitalism as a concept and program dating back to the late Qing reformers has been overlooked for the most part. State capitalism is by no means new to China, from Liang Qichao, Sun Yatsen and Mao Zedong to Deng Xiaoping, the idea that China had to create a modern nation state and industrial capitalism in the name of economic progress and to get ahead in the global competition is a recurring theme. What is new is that for the first time the ambition to use state capitalism as a means to catch up with the West is bearing fruits in ways that could undermine the predominance of Western economies.
Topic:: Imperialism, Political Economy, History, Capitalism, and State Capitalism
Political Geography:: China and Asia

20. Japan's New Security Strategy and the Changing Geopolitics in the Indo-Pacific

Author:: Sheila Smith and Gerald Curtis
Publication Date:: 03-2023
Content Type:: Video
Institution:: Weatherhead East Asian Institute, Columbia University
Abstract:: Major changes that have occurred in the global political economy and in international politics in recent years have had a profound impact on nations all around the world. This is nowhere more evident than in the countries in the Indo-Pacific region and especially Japan. This conversation addresses Japan's evolving foreign policy and its impact in the Indo-Pacific.
Topic:: Security, Foreign Policy, Political Economy, Geopolitics, and Regional Politics
Political Geography:: Japan, Asia, and Indo-Pacific

21. Climate versus trade? Reconciling international subsidy rules with industrial decarbonisation

Author:: David Kleimann
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: The vast environmental subsidies that may be required for the transition to net-zero greenhouse gas emissions are starting to generate international trade and political frictions between the world’s largest economies. This puts (supra-)national industrial decarbonisation efforts on a collision course with international subsidies rules and national countervailing duty (ie anti-foreign subsidy) laws and regulations. International cooperation will be essential to defuse such tensions before they escalate and impede effective climate policy rollouts, and before they lead to economic countermeasures that create new barriers to trade in environmental goods. This requires agreement on permissible environmental subsidy practices that minimise distortions. Meanwhile, it will be crucial to provide financial transfers to assist poorer economies with industrial decarbonisation at the same time as those poorer economies are suffering from the cross-border negative economic impacts of otherwise net-global-welfare enhancing environmental subsidies paid out by wealthy countries. Various forums can host the technical and political negotiations necessary to set the parameters of net global-welfare enhancing subsidies. These include the G7, the G20, the Organisation for Economic Co-operation and Development, the World Trade Organisation’s Trade and Environment Committee and WTO Trade and Environmental Sustainability Structured Discussions, and the Coalition of Trade Ministers on Climate.
Topic:: Climate Change, Political Economy, Trade, Carbon Emissions, Subsidies, and Decarbonization
Political Geography:: Global Focus

22. The Political Economy of Anti‐bribery Enforcement

Author:: Lauren Cohen and Bo Li
Publication Date:: 02-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: A level playing field for firm competition is a fundamental requirement for any market to maximize its potential and achieve productive efficiency. When government favors a set of firms or individuals over others, distortions arise that reverberate throughout entire industries, affecting sales, production, innovation, and more. This is not to say that barriers to firms may not sometimes naturally arise, but if a finger is placed on the scale by government to allow certain firms to gain some unerodable advantage, this can have large implications on allocation and overall economic development.
Topic:: Corruption, Political Economy, Law Enforcement, Accountability, and Bribery
Political Geography:: Global Focus

23. China's Political-Economy, Foreign and Security Policy: 2023

Author:: Center for China Analysis
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Asia Society
Abstract:: It has now been three months since the 20th Party Congress convened in Beijing on October 15. While the Congress set Xi Jinping’s ideological, strategic, and economic direction for the next five years, much has happened since then that the Chinese leadership did not anticipate. Principal among these surprises was the spontaneous eruption in late November of public protests across multiple Chinese cities against the economic and social impact of the Chinese Communist Party’s “dynamic zero-COVID” policy. These protests resulted in an unprecedented U-turn on December 8 from China’s relentless pursuit of its three-year-long national pandemic containment strategy to the Party now seeking desperately to restore economic growth and social calm. This shift has in turn generated major public pressures on the Chinese health system as hospitals struggle to cope with surging caseloads and mortalities. All of these developments stand in stark contrast to the political, ideological, and nationalist self-confidence on display at the 20th Party Congress. In October, Xi Jinping swept the board by removing any would-be opponents from the Politburo and replacing them with long-standing personal loyalists. Xi also proclaimed China’s total victory over COVID-19, contrasting the Party’s success with the disarray its propaganda apparatus had depicted across the United States and the collective West. Despite faltering economic growth, Xi had doubled down in his embrace of a new, more Marxist approach to economic policy which prioritized planning over the market, national self-sufficiency over global economic integration, the centrality of the public sector over private enterprise, and a new approach to wealth distribution under the rubric of the Common Prosperity doctrine. At the same time, Xi’s 2022 Work Report, delivered at the Congress, abandoned Deng Xiaoping’s long-standing foreign policy framework that “peace and development are the principal themes of the time” and instead warned of growing strategic threats and the need for the military to be prepared for war. As part of a continuing series on China’s evolving political economy and foreign policy, this paper’s purpose is threefold: to examine the political and economic implications of this dramatic change in China’s COVID-19 strategy; to analyze what, if any, impact it may have on China’s current international posture; and to assess whether this represents a significant departure from the Party’s strategic direction set at the 20th Party Congress last October. The paper concludes that the Party changed course on COVID-19 for two reasons: (1) it feared that not doing so would threaten its unofficial social contract with the Chinese people based on long-term improvements in jobs and living standards; and (2) that a structural slowdown in growth could also undermine China’s long-term strategic competition against the United States. This paper also concludes that the stark nature of the December 8 policy backflip, together with the Chinese health system’s lack of preparedness for it, has dented Xi Jinping’s political armor for the medium term. This setback comes on top of internal criticism of Xi’s broader ideological assault on the Deng-Jiang-Hu historical economic growth formula that Xi has prosecuted since 2017, as well as Xi’s departure from Deng’s less confrontational foreign policy posture that characterized previous decades. Nonetheless, these policy errors remain manageable within Chinese elite politics, where Xi still controls the hard levers of power. Furthermore, many of these changes on both the economy and external policy are more likely to be short-to-medium term and therefore tactical in nature, rather than representing a strategic departure from the deep ideological direction laid out for the long-term in Xi’s October 2022 Work Report. While these changes to current economic and foreign policy settings are significant in their own right, there is no evidence to date that Xi Jinping’s ideological fundamentals have changed.
Topic:: Security, Foreign Policy, Political Economy, and COVID-19
Political Geography:: China and Asia

24. The political economy of energy production in post-independence Tanzania: A review

Author:: Japhace Poncian and Rasmus Hundsbæk Pedersen
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Danish Institute for International Studies (DIIS)
Abstract:: In Tanzania, energy production is a matter of great political significance. Despite government commitment to promote non-hydro renewable energy, like solar and wind deployment, so far has been limited. Large, non-hydro, renewable projects have not yet attracted adequate government interest to get implemented. This new DIIS Working Paper suggests that the prioritisation of different sources of energy has been influenced by major shifts in the country’s broader development policy priorities. Access to electricity has in turn been scaled up. These developments point to the importance of political economy factors influencing energy sector development in Tanzania. The paper examines how such factors have influenced government energy source choice and, more importantly, how renewable energy has featured in Tanzania’s energy politics since independence. The paper is based on a review of existing academic and grey literature on energy sector development, reform, and politics throughout the period from independence in 1961 to 2021.
Topic:: Development, Political Economy, Renewable Energy, Independence, and Energy
Political Geography:: Africa and Tanzania

25. Trading short-term gains for long-term costs: the Egyptian political economy under al-Sisi

Author:: Matteo Colombo
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Clingendael Netherlands Institute of International Relations
Abstract:: Egypt’s political economy has been operating on the basis of three core principles over the last few decades. First, the country’s political authorities set strategic economic objectives in a top-down manner. Second, the power elite supports the political authorities and, in exchange, tightly supervises homegrown and foreign investment to generate revenues and job opportunities, as well as private benefits. Third, Egyptian citizens acquiesce, willingly or unwillingly, in this division of power that mostly benefits the political authorities and power elites in exchange for improvements in their livelihoods. Since 2014, President al-Sisi has held closely to these principles but relied increasingly on Egypt’s military networks (part of the power elite) to boost economic growth. This strategy has produced short-term gains – informal jobs and an array of consumer goods – at the expense of long-term economic prospects. In particular, the military’s economic influence has deepened some of Egypt’s structural problems: low productivity, inequality, informal unemployment and a suppressed private sector. This limits the future sustainability of the current economic model. Improving Egypt’s economic prospects requires reducing the role of the state – especially the military – in the economy in terms of decreasing the number of associated enterprises and lightening the regulatory framework. However, this is nearly impossible to realise in sectors in which the military already has a dominant profile, such as construction and extractives, because its support is essential for al-Sisi to maintain power. A more promising alternative for European policy makers to consider is influencing the Egyptian government to limit military influence in sectors with growth potential where the military is largely absent, such as manufacturing and Information and Communications Technology (ICT). A government strategy that prevents further military involvement in these sectors, crafts a regulatory framework conducive to private investment and invites foreign funding, can help Egypt realise greater economic growth and higher fiscal revenues.
Topic:: Development, Political Economy, Economy, and Abdel Fattah el-Sisi
Political Geography:: Middle East and Egypt

26. Pay Day Loans and Backroom Empires: South Sudan’s Political Economy since 2018

Author:: Joshua Craze
Publication Date:: 10-2023
Content Type:: Policy Brief
Institution:: Small Arms Survey
Abstract:: Though elections are now postulated for next year, South Sudan remains in crisis. Conflict continues to scar the country, and climatic shocks exacerbate already acute resource scarcity, leaving approximately 76 per cent of South Sudan’s population surviving on humanitarian assistance. The regime of South Sudanese President Salva Kiir survives by diverting revenues in three key areas—oil production, humanitarianism, and loans from international financial institutions—to the benefit of an elite class in Juba, but at the cost of the immiseration of the people of South Sudan. Pay Day Loans and Backroom Empires: South Sudan’s Political Economy since 2018—a Briefing Paper from the Small Arms Survey’s Human Security Baseline Assessment for Sudan and South Sudan (HSBA) project—analyses this predatory political economy in South Sudan, and charts a shift from the use of wages to reward loyal appointees to a more obscure system based on the dispensations of favours.
Topic:: Security, Corruption, Political Economy, Elections, Conflict, and Revenue
Political Geography:: Africa, Sudan, and South Sudan

27. Xi Jinping’s Vision for the Middle East

Author:: Yair Albeck
Publication Date:: 07-2023
Content Type:: Policy Brief
Institution:: Hudson Institute
Abstract:: Chinese leader Xi Jinping clearly aspires to establish a new global economic order centered around Beijing, not Washington. However, a new global economic order cannot be built in a day. The immensity of this challenge has forced Xi to set his sights on a set of interim goals. These include cementing the Communist Party’s control of the Chinese economy and shielding supply chains, capital flows, and strategic bilateral and multilateral relationships from hostile American policies. These goals equate to the creation of a Sinocentric global economic subsystem. This would be partially integrated into the current Western-led system but would be sufficiently decoupled from the West to protect the pillars of the Chinese Communist Party’s political economy. In Beijing’s grand design, the Middle East plays an indispensable role. But Western analysts have often misjudged China’s interests in the region as purely commercial. While Xi values the region for its economic potential, he sees it as one of the most important arenas of competition with the United States. Yet when United States National Security Advisor Jake Sullivan recently discussed American leadership of the global economy, he focused on Europe and the Indo-Pacific and mentioned Africa and Latin America. He did not mention the Middle East once.1 Washington’s persistent blind spot in the Middle East has obscured its view of Beijing’s global ambitions. If the US does not rectify this mistake, it risks losing more influence in the region and aiding China’s effort to supplant the US atop the global economic order.
Topic:: Foreign Policy, National Security, Political Economy, Foreign Direct Investment, and Xi Jinping
Political Geography:: China and Middle East

28. BlackRock ve ABD Hegemonyası

Author:: Muhammet Sait Pınarbaşi
Publication Date:: 12-2023
Content Type:: Journal Article
Journal:: Bilgi
Institution:: Sakarya University (SAU)
Abstract:: 1980’lerde başlayan uluslararası ekonomi politik gelişmeler kurumsal yönetişim rejimini de etkileyerek, varlık yöneticisi kapitalizmi olarak adlandırılan bir sürece girilmesine ve bu sürecin sonunda yeni ekonomi politik aktörler olan dev varlık yöneticisi şirketlerinin önemli ölçüde büyümesine sebep olmuştur. Ekonomik sistemde hâkimiyetin, rızaya dayalı tahakküm biçimi olarak hegemonyanın ön koşullarından birisi olarak sayılması, bu şirketlerin en büyüğü olan BlackRock’ın ABD hegemonyasındaki konumunun değerlendirilmesinin önünü açmıştır. Konuyla ilgili eserlerin incelendiği literatür taramasının yanında yorumsamacı yaklaşımdan yararlanılarak yapılan çalışmada BlackRock’ı ABD hegemonyası perspektifinden araştırmak hedeflenmiştir. Bu amaç doğrultusunda yapılan araştırmanın sonucunda, yönetimi altındaki varlıkların 10 trilyon dolara ulaştığı BlackRock’ın; ABD ile yakın ilişkisi, ekonomik kriz dönemlerindeki kurtarıcı rolü, dünyanın en büyük finans kuruluşlarına (merkez bankaları dahil) danışmanlık yapması, hissedar olduğu binlerce şirketin genel kurulunda oylama hakkı bulunması ve 2012’den itibaren her yıl yayınlanan mektuplar aracılığıyla küresel ekonomik sisteme önemli ölçüde etki etme kabiliyeti bir bütün olarak değerlendirildiğinde ABD hegemonyası lehine konumlandığı gözükmektedir.
Topic:: Political Economy, Hegemony, Capitalism, and BlackRock
Political Geography:: North America and United States of America

29. Cooperative Federalism in India: The Goods and Services Tax Council: Dialectics and Design

Author:: Haseeb A. Drabu
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Centre for Policy Research, India
Abstract:: This paper explores the origins of the GST Council, examines its impacts on federalism in India, and considers the road ahead for the institution. It also addresses key arguments that have been put forth about the design and functioning of the Council. The GST Council, despite its shortccomings, has the potential to evolve as the centrepiece of a new federal architecture in India. It has changed the institutional architecture of fiscal federalism in India and can potentially change the dynamics of Centre-state relations. However, India’s evolving political economy threatens to derail the federal compact that underlay its formation.
Topic:: Political Economy, Tax Systems, Domestic Policy, and Cooperative Federalism
Political Geography:: South Asia and India

30. Gender and Just Transition: Envisioning a Gender-transformative Pathway to Energy Transition in India’s Coal States

Author:: Suravee Nayak and Ashwini K. Swain
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: Centre for Policy Research, India
Abstract:: Entrenched gender biases and injustices in the coal political economy cannot be wished away with the ongoing shift from coal to renewable energy. Rather, the energy transition must seek to unwind these entrenched patterns in the 20th century energy system while creating an equal role for and participation of women in the 21st century energy system. To do so, just transition planning must proactively engage with gender questions in coal communities and envision a gender-transformative pathway to the transition in India’s coal states. Analysing the forms of exclusions faced by women in coal economies, this brief argues that women face four structural barriers – entry barrier, distribution barrier, wage barrier and representation barrier – that are consequential for their social and economic status and agency. The combined effects of these barriers, the masculine nature of the coal industry and existing social norms marginalise women in India’s coal communities and confines them to three observed patterns of engagement: 1) social reproductive labour, 2) informal casual labour and coal scavenging, and 3) formal but menial labour in coal mines. The ongoing shifts in our energy foundations offer an opportunity to unwind the gender inequities and injustices of the coal economy and envision a gender equal energy future. In this direction, the brief suggests four immediate steps to engage with the gender question as part of just transition planning. Recognise women labour force in the coal economy through an intersectionality-informed analytical and assessment framework. Ensure women’s representation in just transition planning at different tiers of governance and decision making. Promote gender inclusive economic diversification in coal regions, with particular attention to women- centric and women-led economic opportunities. Treat women as change agents in the energy transition harnessing their potential role in smoothening the disruptions of the transition.
Topic:: Political Economy, Women, Coal, Inclusion, Gender, and Energy Transition
Political Geography:: South Asia and India

31. The EU–US Data Protection Framework: Balancing Economic, Security and Privacy Considerations

Author:: Federica Marconi
Publication Date:: 09-2023
Content Type:: Commentary and Analysis
Institution:: Istituto Affari Internazionali
Abstract:: The rapid evolution of digital technology has ushered in a data-centric economy, where data accessibility drives marketplace efficiency and economic growth across various industries. However, this shift, while offering numerous benefits, introduces significant privacy and data security challenges, particularly in the context of transatlantic data transfers. Considering the vast economic ties between the EU and the US, the transatlantic data flow vividly illustrates the complexities involved in governing and transferring data. It grapples with the ongoing challenge of striking a satisfactory balance between economic advantages stemming from data utilisation and various concerns pertaining to national security, digital sovereignty and individual rights. In recent years, the European Commission approved two different frameworks on transatlantic data flow – Safe Harbour in 2000[1] and Privacy Shield in 2016[2] – asserting that the US provided a level of data protection for data transfers essentially equivalent to that guaranteed in the EU. However, despite initial optimism, both adequacy decisions faced a significant setback when the Court of Justice of the European Union invalidated them in what is commonly referred to as the “Schrems saga”,[3] named after the Austrian activist who first challenged both frameworks before the European Court. The core arguments centred on the absence of adequate safeguards for personal data within US domestic law and the extent of state surveillance over such data when it was transferred, as initially disclosed by Edward Snowden in 2013.[4] This legal development led to a period of significant uncertainty and further heightened the ongoing debate concerning the regulation of transatlantic data transfer. To address the consequences of this legal turmoil, both EU and the US committed to establishing “a renewed and sound framework for transatlantic data flows”,[5] seeking a long-term solution to address the complexities of data privacy and security, eventually leading to the recently adopted EU–US Data Privacy Framework (“DPF”).
Topic:: Security, Economics, Political Economy, European Union, Privacy, Transatlantic Relations, and Digital Policy
Political Geography:: Europe and United States of America

32. The Internationalisation of the Chinese Renminbi and China’s Digital Currency Plans

Author:: Lorenzo Bencivelli and Michele Savini Zangrandi
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: Istituto Affari Internazionali
Abstract:: China has made major reforms to boost the international standing of its currency. The global presence of the renminbi remains contained, however. This is due to China’s economic structure (a persistent current account surplus and a partially closed financial account) and the government’s grip on the economy. China is also a Central Bank Digital Currency (CBDC) forerunner. The digital yuan (e-cny) is already active in a large scale trial. Many claim that the e-cny could provide a major boost to the internationalisation of the renminbi. However, the internationalisation of the renminbi would require major economic reforms that cannot be bypassed by the deployment of new technologies. The e-cny is therefore unlikely to boost the renminbi’s international presence. Yet, its underlying technology could be exported to other countries wishing to deploy their own-currency CBDCs. Much like with telecommunication equipment, this scenario would put China in the position of being a provider of a critical infrastructure. In the longer run, the export of e-cny technology might also facilitate the creation alternative payment networks, though this scenario is not very likely.
Topic:: Political Economy, Governance, Finance, Currency, and Digital Policy
Political Geography:: China and Asia

33. Rentiership and Intellectual Monopoly in Contemporary Capitalism: Conceptual Challenges and Empirical Possibilities

Author:: Joseph Baines and Sandy Brian Hager
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: City Political Economy Research Centre (CITYPERC), University of London
Abstract:: The concepts of rentiership and intellectual monopoly have gained increased prominence in discussions about the transformation of global capitalism in recent years. However, there have been few if any attempts to construct measures for rentiership and intellectual monopoly using firm-level financial data. The absence of such work, we argue, is symptomatic of conceptual challenges in delineating what precisely qualifies as rent, intellectual or otherwise. In place of static conceptions of rent and intellectual monopoly, we develop a dynamic framework for analyzing the processes of rentierization and intellectual monopolization and apply this framework to the analysis of the transformation of non-financial firms in the United States since the 1950s. We find that the timing and intensity of rentierization and intellectual monopolization differs significantly across sector and firm size and is heavily mediated by the uneven ramifications of government policy across companies and industries. Overall, our framework illuminates the variegated landscape of corporate power in the US, and offers a useful guide for critically interrogating rentierization and intellectual monopolization in other contexts.
Topic:: Political Economy, Capitalism, Monopoly, and Rentiership
Political Geography:: Global Focus

34. Paying with Austerity: The Debt Crisis and Restructuring in Sri Lanka

Author:: C. P. Chandrasekhar, Jayati Ghosh, and Debamanyu Das
Publication Date:: 12-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: On April 12, 2022, Sri Lanka defaulted on external debt service commitments. Announcing the “pre-emptive default,” pending restructuring, the government also announced that it was suspending repayments due in 2022 on its external debt. By May, Sri Lanka was formally in default, becoming the first country in the Asia-Pacific region to default on debt in two decades. There were medium-term factors that underlay the crisis, not least of which was the chronic dependence on foreign finance, especially debt, to cover widening current account deficits that followed the IMF-inspired and dictated embrace of liberalization policies starting in the late 1970s. In recent years, following the global financial crisis and the end of the civil war in 2009, this dependence on external borrowings intensified. There was also a dramatic shift towards bilaterally, besides multilaterally, financed investment projects and increasing reliance on the bond market, partly to meet debt service commitments on accumulated debt. Given this vulnerability, a crisis was precipitated by a collapse in foreign exchange receipts during the Covid pandemic, due to falling exports, near-zero tourist arrivals and reduced remittances and the subsequent spike in the outflow of foreign exchange because of the speculation-induced rise in the prices of fuel and food. This paper details the events which culminated in the Sri Lankan debt crisis, assesses the appropriateness of the official, IMF-prescribed strategy of adjustment and debt restructuring, considers the experience with restructuring thus far, and explores alternatives that would have been, and could still be, less regressive and ensure sustainable development.
Topic:: Debt, Political Economy, Finance, Austerity, and Liberalization
Political Geography:: South Asia and Sri Lanka

35. The International Monetary Fund and Neonatal Mortality Rates, 1985-2018

Author:: Shih-Yen Pan, Michael Ash, Bridget Diana, Lawrence King, Joseph Lavallee, Ta Minh Quan, and Elias Nosrati
Publication Date:: 12-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: In 2015, 193 nations committed to UN Sustainable Development Goal 3·2, which aims to reduce child mortality rates by 2030. Despite progress, challenges remain, especially in low- and middle-income countries. International Monetary Fund (IMF) lending programs may influence these outcomes through structural adjustments which prioritise macroeconomic stability over public spending. In this study, we examine the impact of IMF interventions on neonatal mortality, addressing concerns about existing analyzes with a novel statistical approach.
Topic:: Political Economy, History, Sustainable Development Goals, Macroeconomics, IMF, and Infant Mortality
Political Geography:: Global Focus

36. Structural Changes and Dominance of Finance in Contemporary Capitalism

Author:: Sunanda Sen
Publication Date:: 09-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Structural changes in economies as have taken place in in majority of economies in terms of the sector-wise contribution to their aggregate output as well as employment include a rising share of the services sector, often exceeding one-half of the GDP. Services include, in addition to other activities, the high value financial activities, having weights disproportionately large. Thus the rising share of services to the GDP implies simultaneous rise in share of financial activities to the GDP as well. Analyses in literature explain structural changes by relative profitability as prime mover of changes, similar to financialisation of economies. In this a circuitous link between socio- political and economic-forces and the changing weight (power relations) can be observed. With capitalism taking a multi-layered structure, the path of finance to dominance may be along a variety of trajectories including vertical shifts from real to financial activities. The quantitative strength of finance is reinforced by socio political forces as alliances. The path may face a crisis led by fundamental uncertainty where agents are ignorant of the future, and the path keeps changing by actions of agents themselves. With knowledge unattainable, ‘conventions’ help agents, as Keynes held, the calming of nerves, forming collectively a “conventional process of expectation formation”. This forms a major theoretical innovation of Keynes which brings in expectation formation and decision making by agents based on custom, habit, tradition, instinct as relevant in a model of human agency faced with fundamental uncertainty.
Topic:: Political Economy, GDP, Employment, Capitalism, Finance, and Keynes
Political Geography:: Global Focus

37. Cocoa in Ghana, the ‘Political Crop’: Does State Control Shield the Cocoa Sector from Exposure to Capital Flight?

Author:: Léonce Ndikumana and Kwame Adjai-Mantey
Publication Date:: 08-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Since its introduction into Ghana in the 19th century, cocoa has been considered a strategic crop, over which the post-independence governments have maintained substantial control. Cocoa is indeed referred to as a ‘political crop.’ The cocoa sector is closely regulated by the government through the Ghana Cocoa Board (COCOBOD). This paper aims to investigate whether this special industrial organization structure and the strict regulation help minimize the sector’s exposure to capital flight that would otherwise occur through export misinvoicing and leakage of foreign exchange earnings from cocoa exports. Indeed, compared to the gold sector in Ghana and the cocoa sector in neighboring Côte d’Ivoire, both of which are fully liberalized and dominated by foreign corporations, the cocoa sector in Ghana exhibits relatively little evidence of export misinvoicing. Moreover, cocoa export earnings are fully repatriated as they are in the hands of COCOBOD. The analysis, however, indicates that the gains from the cocoa sector in terms of contributions to GDP, tax revenue, and poverty reduction remain sub-optimal. This suggests that there is substantial room for improvement of these outcomes through targeted reforms and policy interventions at the sectoral level.
Topic:: Political Economy, Reform, Exports, Capital Flight, and Cocoa
Political Geography:: Africa and Ghana

38. Capital Flight from Natural Resource-Dependent African Countries: Updated Estimates and Analysis for the Cases of Cameroon, Ghana, and Zambia, 1970-2021

Author:: Léonce Ndikumana
Publication Date:: 08-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: This paper is part of a project that investigates domestic and global drivers and enablers of capital flight from Cameroon, Ghana, and Zambia, three countries that are significantly endowed in natural resources. It presents estimates of capital flight from these three countries and discusses the key drivers of the phenomenon. The results show that as of 2021, estimated total capital flight stood at $71.1 billion for Cameroon, $50 billion for Ghana, and $71.5 billion for Zambia. External borrowing and, in the cases of Zambia and Cameroon, trade misinvoicing, are key correlates of capital flight. While external borrowing directly and indirectly drives capital flight, trade misinvoicing constitutes an important mechanism of unrecorded cross-border capital flows. This study contributes to the efforts to uncover the mechanisms and enablers of capital flight from Africa, with the aim of shedding light on possible strategies to curb further capital outflows in the context of efforts to scale up and diversify development financing to support recovery from global crises, the transition to green growth, and sustainable development in Africa.
Topic:: Development, Political Economy, Natural Resources, Capital Flight, and Trade
Political Geography:: Africa, Zambia, Ghana, and Cameroon

39. China’s Changing COVID-19 Policies: Market and Public Health

Author:: Zhun Xu
Publication Date:: 05-2023
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: After the outbreak of COVID-19 in early 2020, China took fast and decisive measures to successfully contain the spread of the virus within its borders. While the rest of the world saw huge human and social costs in the pandemic, the Chinese mainland for about two years was largely free from COVID. The zero-COVID model, however, met great challenges by early 2022. Despite some efforts to save the zero-COVID model, in November 2022, the Chinese government abruptly abandoned its signature COVID controls during the pandemic and switched to the opposite. This article reviews the evolution of the Chinese COVID policies and places the dramatic turns in the context of the changing Chinese political economy. The findings show that the shifting class interests and actions were an important force behind China’s retreat from zero- COVID.
Topic:: Markets, Political Economy, Public Health, and COVID-19
Political Geography:: China and Asia

40. Individualism and Political Stability

Author:: Minhyeon Jeong and Wongi Kim
Publication Date:: 12-2023
Content Type:: Working Paper
Institution:: Korea Institute for International Economic Policy (KIEP)
Abstract:: This study analyzes the relationship between individualism as a cultural trait and political instability as a political characteristic. The intuition of the analysis is that cultural traits can determine political preferences of members of society. The study considers a specific political belief: “How much should the government protect individual property rights?” which extends to broader political beliefs such as profree market vs. pro-redistribution. According to numerous studies, individualistic cultures tend to support stronger protection of property rights than collectivist cultures. If the degree of protection of property rights is determined by the political choices of the members of society, it can be inferred that the political preferences that lead to strong protection of property rights reflect the individualistic cultures inherent in society members. That is, the political preferences of society members regarding the degree of property rights protection―or, in a broader sense, pro-free market versus pro-redistribution―are influenced by their cultural traits of individualism or collectivism. This study presents a politico-economic model that captures this intuition. The theoretical results are as follows. First, in societies where neither individualism nor collectivism dominates, political preferences for free-market or redistribution contrast more sharply than in societies where individualism or collectivism dominates. Second, this contrast in political preferences leads to political instability, such that societies where neither individualism nor collectivism dominates tend to be more politically unstable. This study provides empirical evidence supporting the theoretical results. This study identifies a relationship between cultural traits, political preferences and political instability, shedding light on the impact of culture on economic growth. In a nutshell, societies with highly heterogeneous cultural traits among their members are prone to polarization of political preferences, leading to political instability, which constrains economic growth in the long run.
Topic:: Political Economy, Political stability, Individualism, and Competition
Political Geography:: Global Focus

41. The political economy of Bitcoin as legal tender in El Salvador: Temporary bandages to permanent wounds?

Author:: Tobias Boos and Juan Grigera
Publication Date:: 11-2023
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper provides a contextual analysis of the adoption of Bitcoin as legal tender in El Salvador. First, we outline the historical context and the political situation of the period 2019–24 that serve as context for the passage and implementation of the Bitcoin law (Decree No. 57). We identify the institutional and political context and the main areas of contention. Next, we delve into the macroeconomic context of El Salvador, outlining the fundamental features of its economy and highlighting how they relate to currency issues. Our analysis reveals that the adoption of Bitcoin cannot be understood without factoring in the mounting strains surrounding dollarization, remittances, and foreign debt. We conclude by putting forth a set of hypotheses regarding the potential dynamics and future of Bitcoin as legal tender in El Salvador that point beyond Bukele’s tactics.
Topic:: Debt, Political Economy, Economy, Bitcoin, Digital Currency, Remittances, Dollarization, and Nayib Bukele
Political Geography:: Central America and El Salvador

42. Addressing Loss and Damage through the Mosaic: A Simulation from the Delta Republic

Author:: Michael Franczak and Michael Weisberg
Publication Date:: 10-2023
Content Type:: Policy Brief
Institution:: International Peace Institute (IPI)
Abstract:: The 2023 UN Climate Change Conference (COP28) takes place amid change and contestation in the global political economy. High prices for food and fuel are still a problem, particularly for countries that are net importers of both. Sovereign debt also remains a challenge due to rising borrowing costs and inaction from major creditors. Meanwhile, the adverse impacts of climate change are rising in scale and intensity and falling disproportionately on the countries least equipped to address them. In this context, parties to the 2022 Climate Change Conference (COP27) agreed to establish new funding arrangements for addressing loss and damage, including a new Loss and Damage Fund (LDF). The proposal for a fund and funding arrangements coordinated by a Loss and Damage Impact Council presents an opportunity to assemble the mosaic of solutions imagined at COP27. The problem is that we still lack a clear and shared picture of what it means to fully address loss and damage: what needs doing, who needs to do it, and how and when it needs to be done. This paper is an attempt to imagine a well-functioning and coordinated system—a mosaic—with functions, institutions, and results that deliver stability in the face of adverse climate change impacts. First, the paper presents the scenario of the fictional Delta Republic, which is suffering a slow-onset crisis compounded by repeated extreme events. It then identifies elements of an ambitious but practical response from the system we have, including actions, modalities, actors, and timing. The paper identifies gaps in the response and obstacles to the actions envisaged in the scenario, including but not limited to finance and financial arrangements. In its conclusion, the paper uses insights gained through the scenario to propose: (1) the purpose of the funding arrangements for extreme and slow-onset events, (2) an initial list of members for a Loss and Damage Impact Council, and (3) potential actions and interventions for the Loss and Damage Fund. Finally, the paper emphasizes the critical nature of a country- or demand-driven approach to the support provided by the LDF, including the use of accredited entities for implementation.
Topic:: Climate Change, Political Economy, Simulation, Loss and Damage (L&D), and Conference of the Parties (COP)
Political Geography:: Global Focus

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

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

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

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

45. Inequalities and Local Infrastructure: The Challenges of Post-Covid Recovery Investments

Author:: Filippo Barbera
Publication Date:: 02-2022
Content Type:: Commentary and Analysis
Institution:: Istituto Affari Internazionali
Abstract:: Rather than being mere “productive environments”, localities embedded in infrastructure are distinctive living places in which communities of people live and establish a greater part of their daily social relationships. As a result, infrastructure represents the backbone of citizenship rights and strongly affect territorial inequalities. Infrastructure is chiefly understood in physical terms as reticulated systems of highways, pipes, wires or cables. This physical reductionism is by no means sufficient to encompass the multiple facets of the concept or to make sense of the many ways infrastructure affects socio-political inequalities. Knowledge infrastructure, for instance, may indicate robust networks of people, equipment and institutions that generate, share and maintain specific knowledge about the human and natural worlds. Infrastructure furthermore refers to the interplay between information technologies, transportation and other intermodal transport devices. All of these kinds of infrastructure affect inequalities in different ways.
Topic:: Political Economy, Politics, Infrastructure, Governance, European Union, Sustainable Development Goals, and Institutions
Political Geography:: Europe

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

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

47. Processing Trade and Global Supply Chains: Towards a Resilient “GVC 2.0” Approach

Author:: Lucian Cernat
Publication Date:: 05-2022
Content Type:: Policy Brief
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: In the current global context marked by economic fragility, growing uncertainty and geopolitical conflicts, ensuring the smooth functioning of global supply chains becomes more important than ever. Supply shortages, higher freight costs, higher commodity prices and strong demand increase will trigger inflationary pressures for all economic sectors dependent on global value chains (GVCs). As part of global efforts to enhance the resilience of GVCs, this paper makes the case for a broader discussion about the untapped potential of processing trade, a relatively unknown trade facilitation option available in many countries around the world. Processing trade has been credited with stimulating China’s participation in GVCs, in combination with foreign direct investment (FDI) attraction and industrial upgrading. However, processing trade is not just a Chinese phenomenon. In the EU, significant trade flows (over 200 billion euros in 2021 alone) benefitted from a double-digit trade cost reduction, thanks to the EU processing trade provisions. Different types of processing trade arrangements exist in over 70 countries worldwide (including in the EU), as a way to facilitate the integration of developing countries in global production chains. However, these unilateral schemes have different requirements and co-exist without any attempt to facilitate their inter-operability along complex global supply chains. This paper argues that there is a pressing need for a global reflection on how best to promote a better integration between these national processing trade schemes. One option is to promote a “GVC 2.0” approach that offers key recommendations and best practices for processing trade along GVCs. Such a coordinated “GVC 2.0” trade facilitation initiative would not only make GVCs more resilient for countries that depend on global sourcing for their critical economic activities, but it will also reduce the inflationary effect generated by the unnecessary trade costs associated with GVC activities.
Topic:: Political Economy, European Union, Trade, Resilience, and Supply Chains
Political Geography:: Europe, Asia, and Global Focus

48. Policy Experimentation in China: The Political Economy of Policy Learning

Author:: Shaoda Wang and David Y. Yang
Publication Date:: 05-2022
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Determining what policies to implement and how to implement them is an essential government task. Policy learning is challenging, as policy effectiveness often hinges on the nature of the policy, its implementation, the degree that it is tailored to local conditions, and the efforts and incentives of local politicians to make the policy work.
Topic:: Political Economy, Politics, Policy Implementation, and Economic Policy
Political Geography:: China and Asia

49. No Strings Attached: Corporate Welfare, State Intervention, and the Issue of Conditionality

Author:: Fabio Bulfone, Timur Ergen, and Manolis Kalaitzake
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: This paper contributes to Comparative Political Economy (CPE), developing an analytical concept of corporate welfare. Corporate welfare — the transfer of public funds and benefits to corporate actors with weak or no conditionality — is a prominent form of state-business relations that CPE scholarship regularly overlooks and misinterprets. Such transfers should be understood as a structural privilege of business in a globalized post-Fordist capitalism, and an increasingly common strategy through which states attempt to steward national economic dynamism within a highly constrained range of policy options. However, with- out a well-developed concept of corporate welfare – premised upon the key criterion of conditionality – studies that identify a “return” of the state in industrial planning misrepre- sent these transfers to business as a reassertion of state influence and control, rather than a reflection of state weakness and subordination. The paper provides the analytical building blocks to properly conceptualize transfers to business, works out the core challenges for em- pirical research, and provides empirical illustrations of this burgeoning phenomenon from the fields of unconventional monetary policy, privatization, and urban political economy.
Topic:: Industrial Policy, Political Economy, Privatization, Monetary Policy, Welfare, and Public-Private Partnership
Political Geography:: Global Focus

50. Land Grabbing and International Political Economy: Towards a Critical Neo-Gramscian Theoretical Model of Land Governance in Latin America

Author:: Sol Mora
Publication Date:: 04-2022
Content Type:: Journal Article
Journal:: Contexto Internacional
Institution:: Institute of International Relations, Pontifical Catholic University of Rio de Janeiro
Abstract:: The vigorous debate on global land grabbing within Critical Agrarian Studies contrasts with the incipient analyses from International Political Economy (IPE). This divergence has overshadowed the multi-scalar nature of the power relations that shape land governance, and consequently its effects on land grabbing. For this reason, this paper provides a critical theoretical model of land governance based on Robert Cox’s historical structures approach to understand the causes of land grabbing in Latin American countries. It is argued that this model renders visible the articulation of local and global processes driving land grabbing because it foregrounds the power relations at multiple scales that shape decisions on land access, use and control, as well as the conflicts inherent to them. This demonstrates that, on the one hand, land governance structures in Latin America play a hegemonic role since they express and develop the global agricultural model that promotes land grabbing. On the other hand, social resistance highlights that land governance simultaneously possesses a potential for change. As a result, knowledge about land grabbing is enhanced through a dialogue between the two fields of study.
Topic:: Economics, Political Economy, Governance, International Relations Theory, and Models
Political Geography:: South America, Latin America, and North America

51. International Political Economy and Sustainable Finance: Assessing the EU’s Green Deal and UNCTAD’s Green New Deal

Author:: Johannes Jager
Publication Date:: 04-2022
Content Type:: Journal Article
Journal:: Contexto Internacional
Institution:: Institute of International Relations, Pontifical Catholic University of Rio de Janeiro
Abstract:: Sustainable green finance is often promoted as an innovative tool to deal with environmental problems. This paper assesses policy proposals at the level of the EU and UNCTAD’s Green New Deal, specifically regarding its suggestions in the field of sustainable finance. It provides a theoretical framework in the tradition of critical political economy and combines a global perspective with regulation theory in order to assess different strategies in the area of sustainable finance. The respective proposals and initiatives can be considered as possible blueprints for hegemonic strategies within different contexts. However, the analysis suggests both proposals, although substantially different and representing different entities in the international political economy, fail to provide a systematic answer to the problems of a highly unequal over-use of natural and environmental resources at a global level.
Topic:: Political Economy, Finance, Green Technology, and Sustainability
Political Geography:: Global Focus

52. Schumpeter’s Creative Destruction as a Radical Departure: New Paradigm for Analyzing Capitalism

Author:: Leonardo Burlamaqui
Publication Date:: 03-2022
Content Type:: Special Report
Institution:: Brazilian Center for International Relations (CEBRI)
Abstract:: The paper’s core contribution is a reinterpretation of Schumpeter’s development theory, through the "creative destruction paradigm" provided in Capitalism, Socialism and Democracy (CSD). By linking the core propositions of the latter with the brilliant, but underdeveloped, innovations from The Theory of Economic Development (TED) and some largely ignored historical and institutional insights provided in Business Cycles (BC), the seeds of a new analytical framework emerge. One which is completely out of balance, centered on finance, entrepreneurial action, uncertainty, institutions, and competition by means of innovation.
Topic:: Development, Political Economy, Capitalism, Finance, Entrepreneurship, and Innovation
Political Geography:: Global Focus

53. Polanyi, Market Fundamentalism, and the Institutional Structure of Capitalism

Author:: Leonardo Burlamaqui
Publication Date:: 03-2022
Content Type:: Special Report
Institution:: Brazilian Center for International Relations (CEBRI)
Abstract:: The basic proposition of this paper is that the so-called "new economic sociology", which is rooted in key ideas of Karl Polanyi, is an indispensable "tool" for two tasks: a) it provides us with a powerful critique of market fundamentalism, and b) it allows us to analyze the economic performance of contemporary capitalism by accessing the working of its institutional structure. From an analytical perspective, the paper suggests that Polanyian Economic Sociology is an essential complement to both the Schumpeterian and the Post-Keynesian perspectives in economics. This is especially so when it comes to the discussion of "socioeconomic stability" and, more precisely, as Keynes himself stated in the General Theory: to explain why capitalist economies manifest themselves in different ways and degrees, in spite of encompassing inherent elements of instability and unpredictability.
Topic:: Economics, Markets, Political Economy, Sociology, and Capitalism
Political Geography:: Global Focus

54. Explaining immigration restrictions using a sequential path dependency model

Author:: Emmanuel Comte
Publication Date:: 06-2022
Content Type:: Working Paper
Institution:: Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:: This paper, by Emmanuel Comte, Senior Research Fellow, Ariane Condellis European Programme, analyses immigration restrictions by discussing major recent debates of historical political economy and proposing a new explanatory model. The conclusions in recent research on the subject of immigration restrictions converge in highlighting the natives’ fear of economic costs as a potent factor in immigration restrictions, despite evidence proving that actual costs are small and circumscribed, while the aggregate impact of immigration is generally positive. This paper develops existing scholarship to explain the magnitude of current immigration restrictions in Europe and North America by proposing a sequential path dependency model based on both historical insights and the insights of institutionalist theories of path dependence. In this model, the fears of adverse economic effects held by specific segments of the national workforce interact with a power structure dominated by the state and with the agency of union leaders and policymakers initiating a series of policy cycles that lead to complete restrictions on low-skilled immigration.
Topic:: Political Economy, Immigration, and Border Control
Political Geography:: Europe and North America

55. Statesmanship for Political Economy in the National Interest

Author:: Nathan Hitchens
Publication Date:: 01-2022
Content Type:: Journal Article
Journal:: Humanitas
Institution:: The Center for the Study of Statesmanship, Catholic University
Abstract:: As we emerge unevenly from the ravages of a global pandemic, the new world upon us is summoning statesmanship for political economy in the national interest. 2020 was apocalyptic in the true sense of the word. The depth of our dependence on Chinese manufactures for everything from face masks, respirators, ventilators, to basic pharmaceuticals was revelatory. This emergency unveiled the gaunt figure of American industry. Yet, our industrial thinning-out was there for all to see during America’s decades-long, neoliberal diet of globalized supply chains, offshored manufacturing, and international trade based on economic comparative advantage and specialization. An optimist might object to this dire picture and point to Operation Warp Speed, the massive effort of industrial policy in pharmaceuticals and drug development, which produced vaccine formulae in record time by relying on a World War II model of public-private sector mobilization and on powers of the federal government in the 1950 Defense Production Act.
Topic:: Security, Political Economy, Governance, and Leadership
Political Geography:: North America and United States of America

56. Putting Development at the Centre of G20 Policy Agenda: Lessons for the T20

Author:: Daniele Fattibene and Alice Fill
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Istituto Affari Internazionali
Abstract:: The G20 Development Working Group has gradually evolved throughout the years, following a haphazard and contradictory path. On the one hand, it has been progressively overshadowed by a sectoralisation of G20 activities, with several action tracks (i.e., the Finance Track) taking a more prominent role in the definition of the leaders’ priorities. On the other hand, its (unexploited) potential has increased due to the emergence of several global crises that have shown the importance of rekindling multilateral solutions at the G20 level. The T20 has a strong potential to boost G20 legitimacy on development cooperation worldwide, by drafting evidence-based and pragmatic policy proposals for the decision-makers. However, although often advocating for similar solutions, the Development Working Group and T20 have not necessarily fed into each other’s policy agendas, leading to misalignment and reducing their chances to influence other G20 tracks on crucial development issues such as development finance, food security or the global climate agenda.
Topic:: Development, Political Economy, Governance, G20, and Sustainability
Political Geography:: Global Focus

57. A Gravity Theory of Subordinate Financialisation

Author:: Photis Lysandrou
Publication Date:: 01-2022
Content Type:: Working Paper
Institution:: City Political Economy Research Centre (CITYPERC), University of London
Abstract:: Recent decades have marked both the globalisation of capitalism following the collapse of communism and its financialisation following the rapid growth of the world's securities markets. These developments have impacted the core-periphery divide in capitalism. In the case of globalisation, the entry of the ex-communist countries into the world capitalist system has swelled the ranks of the emerging capitalist economies (ECEs) that are kept subordinate through the pressures from the advanced capitalist economies (ACEs). In the case of financialisation, the growth of the securities markets has led to a palpable change in the pressures that perpetuate subordination. Where previously the use of authority was the chief source of those pressures, it now plays a secondary role. Absent that authority, and the ECEs would still be held in a subordinate position in global capitalism through the gravitational pull of the ACEs' financial securities markets. The central purpose of this paper is to explain this gravitational pull.
Topic:: Markets, Political Economy, Capitalism, Finance, and Financial Globalization
Political Geography:: Global Focus

58. The Rise of a Rule-Based Transgressor Elite

Author:: Ronen Palan
Publication Date:: 01-2022
Content Type:: Working Paper
Institution:: City Political Economy Research Centre (CITYPERC), University of London
Abstract:: Transnationally organised, rule-based transgressor elites are the wealthiest and most powerful elites today. The core of this group comprises managers of large multinational corporations and related ‘born global’ corporations, such as Tesla, eBay and the like, large investment houses, such as Blackrock, Blackstone and Vanguard, leading international investment banks and elite legal, consultancy and accounting firms. This elite core is joined by several ancillary groups. Arguably the most significant of those are midsize corporate groups, many of which are privately held. Numbering in the hundreds of thousands, perhaps even millions, they employ tactics perfected by large corporations to arbitrage rules and ensure corporate and other forms of taxation, rules specifying personal or group liabilities or other regulations, including protection of shareholders and the like, are either partially or fully avoided. To these, Ricardo de Soares adds another group; he argues elites from development countries latch onto existing institutional and professional providers serving those other elites; once they achieve their goal of transferring capital out of their own countries, they participate actively in the process of wealth and power concentration described in this paper (Soares, 2021) .
Topic:: Political Economy, Multinational Corporations, Elites, and Capital Accumulation
Political Geography:: Global Focus

59. What Do We Really Know about Productivity Differentials across Countries?

Author:: Jayati Ghosh
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: This paper examines and critiques the most widely used measure of productivity (output per worker employed) and argues that this is a flawed, inadequate and even misleading measure of economic progress. In terms of cross-country comparisons and assessing trends over time, both the numerator (GDP or value added) and the denominator (number of workers or hours worked) have significant conceptual and measurement problems. These issues are considered in general, and also with regard to how they affect analyses of productivity differentials in the U.S. and India in the recent period.
Topic:: Political Economy, GDP, Employment, Economy, and Productivity
Political Geography:: South Asia, India, North America, and United States of America

60. The Environmental Consequences of Inequality

Author:: James K. Boyce
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Inequality has important consequences for the extent of pollution and natural resource depletion as well as for the distribution of the costs and benefits from environmental degradation. Inequalities in the distribution of purchasing power operate through the market, and inequalities in the distribution of political power operate through governance institutions, often with mutually reinforcing effects.
Topic:: Environment, Political Economy, Natural Resources, Inequality, Justice, and Pollution
Political Geography:: Global Focus

61. Who Gains from Agricultural “Reform”?: Understanding the 2020 Farm Laws and Protests

Author:: C. P. Chandrasekhar
Publication Date:: 03-2022
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Over 2020-21, farmer protests in India turned into a movement that took large numbers of farmers to the borders of India’s capital. The movement was provoked by the passage of three farm laws designed to dismantle regulation of agricultural trade, provide a legal framework for contract farming arrangements, and facilitate corporate entry into agricultural production and trade. Despite intense farmer opposition the government held out for almost a year after the movement began before withdrawing the laws. The paper attempts to understand the factors underlying this stand-off by tracing the post-Independence evolution of agricultural and food policy and examining the political economy context of the positions adopted by the farmers and the government. A lesson that the farmers have derived from experience, I argue, is that agricultural prices, the terms of exchange between agriculture and industry, and the viability of crop production are not determined by benign and free markets, but by structures of power reflected in state policy. Till the economic crises of the mid-1960s those power relations were skewed against agriculture, but the crisis forced a shift in state policy aimed at raising agricultural production by intensifying farming activity, especially food grain production. A new framework of intervention involving procurement at a cost-plus price and distribution to consumers at subsidised prices, helped either tilt the terms of trade in favour of agriculture or prevent an adverse shift in the terms facing agriculture. Farmers saw the farm laws and the failure to guarantee procurement at an adequately remunerative price as an effort to dismantle that protective framework and favour corporate interests. The protests have resulted in the. repeal of the laws. But the stand-off over the level and price of procurement is still unresolved.
Topic:: Agriculture, Political Economy, Reform, Protests, and Trade
Political Geography:: South Asia and India

62. The Distribution of the Cost of Cuban Social Reproduction in 2016: The Relative Contributions of Domestic and Diasporic Households, the Private Sector, and the State

Author:: Anamary Maqueira Linares and Katherine Moos
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Drawing on feminist political economy and social reproduction theory, we propose an accounting framework for understanding the distributional role of household production, employment, remittances, and government social transfers in the social reproduction of the Cuban people. We apply this quantitative framework to available data and produce estimates for 2016. Our findings demonstrate that households—both domestic and diasporic—were the largest contributors to social reproduction in Cuba. Our empirical exercise provides insight for a qualitative conceptualization and analysis of the changing distribution of social reproduction in Cuba, especially regarding changes in state provisioning and employment. Results reveal how the actual distributional arrangements underlying Cuban social reproduction differ from the official commitments and goals of the Cuban Revolution and signal several potentially unsustainable self-reinforcing dynamics.
Topic:: Political Economy, Employment, Private Sector, and Remittances
Political Geography:: Cuba and Caribbean

63. Past Economic Decline Predicts Opioid Prescription Rates

Author:: Herb Susmann, Elias Nosrati, Michael Ash, Michael Marmot, and Lawrence King
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: America is in undergoing an epidemic of opioid related deaths. Analysts have emphasized two different (but not mutually exclusive) arguments. Supply based explanations emphasize the immoral activity of pharmaceutical companies from 1996 to aggressively market opioids. They typically use prescription rates as a measure of this variable. Demand based explanations emphasize the demand for opioids caused by economic hardship. This paper demonstrates that prescription rates are not entirely exogenous. We show that the decline of average household income from 1979 to 1989 at the county level is a significant predictor of opioid prescription rates in 2010. This is consistent with research that shows that childhood trauma predicts adult drug abuse. The policy implications of this finding are that an adequate response to the opioid epidemic must address economic dislocation and insecurity.
Topic:: Political Economy, Health Crisis, Pharmaceuticals, Opioid Crisis, and Income
Political Geography:: North America and United States of America

64. Inconsistent Definitions of GDP: Implications for Estimates of Decoupling

Author:: Gregor Semieniuk
Publication Date:: 09-2022
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: Efforts to assess the possibilities for decoupling economic growth from negative environmental impacts have examined their historical relationship, with varying and inconclusive results. Part of the problem is ambiguity about definitions of environmental impacts, e.g. whether to use territorial or consumption-based measures of environmental impact. This paper shows that ambiguities arising from definitional changes to GDP are sufficiently large to affect the outcomes. I review the history of structural revisions to GDP using the example of the United States, and on international comparisons of purchasing power parity, compare decoupling results using various historical definitions of GDP on the same environmental indicator, and demonstrate that changing the GDP data vintage does impact decoupling results in qualitatively important ways, with and without purchasing power parity. Inconsistencies in economic measurement introduce an additional layer of ambiguity into historical decoupling evidence and model projection into the future. To advance debate and be clear about scenario assumptions, rigorous reporting of GDP definitions used and the sharing of data vintage for subsequent comparison and replication are urgently needed.
Topic:: Environment, Political Economy, GDP, and Economic Growth
Political Geography:: Global Focus

65. Time Use Data in Feminist Political Economy Analyses: Gender and Class in the Indian Time Use Survey

Author:: Sirisha Naidu and Smriti Rao
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:: The literature on agrarian change in India has largely employed class categories based upon data on land, assets and occupational status. Land and asset data tend to exist at the level of households, while occupation categories have neither fully counted reproductive labour nor accounted for diversified livelihood strategies. As a result, categorizations of class in the literature on agrarian change tend to collapse women’s class relations into those of male household heads. The recent completion of India’s first ever national time use survey provides an opportunity to address these longstanding gaps. This paper examines whether and how the 2019 Indian Time Use data lends itself to an understanding of class relations that i) can better accommodate an expanded conception of work as including reproductive labor ii) better accommodate the highly diversified livelihoods of rural Indians iii) better grasp the articulation of caste and gender differentiated labor processes with capital. In this paper, we are able to show i) and ii). The third goal is somewhat stymied by the absence of qualitative data that contextualize time use data. We compare the class relational mapping obtained from time use data with that obtained from land and occupational data and examine the possibilities and limits of employing time use data to deepen feminist political economy analyses of agrarian change.
Topic:: Agriculture, Political Economy, Labor Issues, Feminism, Caste, and Gender
Political Geography:: South Asia and India

66. Diversifying Supply Chains: The Role of Development Assistance and Other Official Finance

Author:: Conor M. Savoy and Sundar R. Ramanujam
Publication Date:: 06-2022
Content Type:: Policy Brief
Institution:: Institute for Security and International Studies (ISIS)
Abstract:: The Issue: The international political economy has undergone significant transformation since March 2020, profoundly impacting global supply chains and bringing to light the risks supply chains pose to economic development around the world. This brief explores some of these risks in detail and lays out the role foreign assistance can play in de-risking and diversifying supply chains by building capacity in new partner countries.
Topic:: International Cooperation, Political Economy, Foreign Aid, and Supply Chains
Political Geography:: Global Focus

67. Trust as state capacity: The political economy of compliance

Author:: Timothy Besley and Sacha Dray
Publication Date:: 11-2022
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper explores the link between trust in government, policy-making, and compliance. It focuses on a specific channel whereby citizens who are convinced that a policy is worthwhile are more motivated to comply with it. This in turn reduces the government’s cost of implementing a policy and may also increase the set of feasible policies. Thus, state capacity is greater when citizens trust their government. The paper discusses alternative approaches to modelling the origins of trust, especially the link to the design of political institutions. We then provide empirical evidence consistent with the model’s findings that compliance is increasing in trust using the Integrated Values Survey and voluntary compliance during COVID-19 in the UK. We also show that countries with high levels of citizen trust in government were more likely to implement policies requiring voluntary compliance during the COVID-19 pandemic. The paper suggests that trust in government can play a role in building and expanding state capacities.
Topic:: Government, Political Economy, Capacity, Compliance, and Trust
Political Geography:: Global Focus

68. US Power and the Multinational Tech Companies of the Digital Era: An Analysis of the Obama and Trump Governments Oligopolization

Author:: Cristina Soreanu Pecequilo and Francisco Luiz Marzinotto Junior
Publication Date:: 08-2022
Content Type:: Journal Article
Journal:: AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:: Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:: Science and technology are relevant issues in the studies of international political economy. Innovation, at the same time, favors economic growth and impacts the States and non-States players nexus. In the competitive arena of global markets, highly developed innovative organizations tend to provide cheaper and more effective products in a larger scale. In the “anarchic environment” of the international system, technological and scientific supremacy has always been determinant to achieve and maintain power. As power resources do not remain static, their fluidity leads to technological (Kondratieff 1935; Perez 2003) and hegemonic (Arrighi 1996) “long waves” that oscillate during history. After 1945, the United States (US) rose as the hegemonic power and technology, amongst its power resources, was, and remains one of its significant assets of power projection.
Topic:: International Cooperation, Political Economy, Science and Technology, and Hegemony
Political Geography:: Global Focus

69. The Political Economy of the Landscape of Trade Unions in Bangladesh: The Case of the RMG Sector

Author:: Mirza M. Hassan, Syeda Salina Aziz, Raeesa Rahemin, Insiya Khan, and Rafsanul Hoque
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: BRAC Institute of Governance and Development (BIGD), Brac University
Abstract:: The paper explores the political economy landscape of trade unionism in Bangladesh. The focus is on the Ready-Made Garments (RMG) sector, where trade unions (TU) are highly salient and relatively more operational because of the sector’s economic importance, numerical strength of the labour, high degree of concentration of the industries, and TU’s global network, among other factors. Relying predominantly on primary data, we look at both the formal and informal dimensions of industrial relations and their implications for the state-capital-labour interactions as well as governance of TUs. Literature on RMG-related TUs in Bangladesh generally examines it from a social movement perspective. We take a slightly different approach in this paper by making a modest attempt to fulfil the knowledge gaps in TU research. We do this by exploring the formal and informal aspects of relations between the regulatory institutions and the TUs and, more importantly, the internal governance of the TUs themselves as noted above. Additionally, we explore the two-way relational dynamics of TU leaders and the garment workers. These areas have not received much attention in the extant literature. By adopting a politico-sociological perspective, the paper reflects on the collective action dynamics of industrial labour in the context of the global south.
Topic:: Political Economy, Labor Issues, Economy, Trade Unions, and Textile Industry
Political Geography:: Bangladesh and South Asia

70. Capital markets: where we are and what can be done

Author:: Emani Torres
Publication Date:: 11-2022
Content Type:: Case Study
Institution:: Brazilian Center for International Relations (CEBRI)
Abstract:: This text analyzes some of the recent dynamic changes in the Brazilian capital market, with an emphasis on the changes on long-term corporate credit offer, and makes suggestions on public policies. Issuance of debentures by financial institutions, that is, long-term corporate bonds, took a leading role in 2021, which was possible due to a highly favorable institutional framework, such as the existence of a broad and organized public debt market, the sustained fall in domestic interest rates observed in the same year, as well as the shrinkage of BNDES' relevance, historically the main supplier of term credit in Brazil. The text also explores some particularities of the Brazilian capital market in the light of international experiences. Finally, it presents suggestions for public policies to encourage the launch of corporate bonds to a wider audience, as well as to expand BNDES' participation in this segment.
Topic:: Economics, Markets, Political Economy, and Capital
Political Geography:: Brazil and South America

71. Operationalizing Growth Models

Author:: Lucio Baccaro and Sinisa Hadziabdic
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:: We present a new methodology for operationalizing growth models based on importadjusted demand components. Applying the methodology to the latest release of OECD Input-Output Tables, we calculate the growth contributions of consumption, investment, government expenditures, and exports for sixty-six countries in the periods 1995 to 2007 and 2009 to 2018 and identify the respective growth models. We find that most countries are export-led or domestic demand-led and that other forms of growth are rare. Our results corroborate previous classifications in comparative political economy but also differ from them in significant respects. Importantly, our classification improves on previous ones by covering not just the advanced capitalist economies but also Central and Eastern European and South-East Asian and Latin American countries. In a further step, we illustrate how the new indicators can be used to analyze the “drivers” of different types of growth. This examination reveals that there is a clear trade-off between consumption- and export-led growth in advanced Western economies in the period 1995 to 2007 and a dependence of export-led growth in these countries on real exchange rate devaluation in the same period, while export complexity is not a significant predictor of export-led growth.
Topic:: Political Economy, Economy, Economic Growth, Exports, and Emerging Economies
Political Geography:: Europe, Latin America, and Southeast Asia

72. No Strings Attached: Corporate Welfare, State Intervention, and the Issue of Conditionality

Author:: Fabio Bulfone, Timur Ergen, and Manolis Kalaitzake
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:: This paper contributes to Comparative Political Economy (CPE), developing an analytical concept of corporate welfare. Corporate welfare — the transfer of public funds and benefits to corporate actors with weak or no conditionality — is a prominent form of state-business relations that CPE scholarship regularly overlooks and misinterprets. Such transfers should be understood as a structural privilege of business in a globalized post-Fordist capitalism, and an increasingly common strategy through which states attempt to steward national economic dynamism within a highly constrained range of policy options. However, without a well-developed concept of corporate welfare – premised upon the key criterion of conditionality – studies that identify a “return” of the state in industrial planning misrepresent these transfers to business as a reassertion of state influence and control, rather than a reflection of state weakness and subordination. The paper provides the analytical building blocks to properly conceptualize transfers to business, works out the core challenges for empirical research, and provides empirical illustrations of this burgeoning phenomenon from the fields of unconventional monetary policy, privatization, and urban political economy.
Topic:: Industrial Policy, Political Economy, Privatization, Monetary Policy, and Subsidies
Political Geography:: Global Focus

73. Operationalizing Growth Models

Author:: Lucio Baccaro and Sinisa Hadziabdic
Publication Date:: 06-2022
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: We present a new methodology for operationalizing growth models based on import-adjusted demand components. Applying the methodology to the latest release of OECD Input-Output Tables, we calculate the growth contributions of consumption, investment, government expenditures, and exports for sixty-six countries in the periods 1995 to 2007 and 2009 to 2018 and identify the respective growth models. We find that most countries are export-led or domestic demand-led and that other forms of growth are rare. Our results corroborate previous classifications in comparative political economy but also differ from them in significant respects. Importantly, our classification improves on previous ones by covering not just the advanced capitalist economies but also Central and Eastern European and South-East Asian and Latin American countries. In a further step, we illustrate how the new indicators can be used to analyze the “drivers” of different types of growth. This examination reveals that there is a clear trade-off between consumption- and export-led growth in advanced Western economies in the period 1995 to 2007 and a dependence of export-led growth in these countries on real exchange rate devaluation in the same period, while export complexity is not a significant predictor of export-led growth.
Topic:: Political Economy, Economies, Economic Growth, and Exports
Political Geography:: Global Focus

74. Domestic Workers: Postcolonial Inheritance and International Relations

Author:: Karen Johanna Pozo
Publication Date:: 05-2022
Content Type:: Journal Article
Journal:: Contexto Internacional
Institution:: Institute of International Relations, Pontifical Catholic University of Rio de Janeiro
Abstract:: The discipline of International Relations (IR) in Latin American is still dominated by positivist and Westernized research. This creates challenges for international studies such as how to visualise the subjects or ‘sujetas’ who participate in national and international politics but are ignored in this field, and how to value the current postcolonial research, which offers critical perspectives that equilibrate the epistemic balance and help build adequate tools to understand different regional phenomena. By analysing a case study of the Association of Women Domestic Employees of Paraguay, this article clarifies how a postcolonial approach enriches the field of IR. This study argues that postcolonialism contributes to this field by making visible cognitive subjects and ‘sujetas’, who offer an alternative knowledge construction to rethink international relations with a meta-theoretical extension, visible. Postcolonialism is the theoretical basis of this qualitative research. Data was collected through semi-structured interviews and participant observations. This article suggests and concludes that women domestic workers as ‘political subjects’ enrich international relations by offering critical views to the research carried out in the subfields of foreign policy analysis, international political economy, and regionalism.
Topic:: International Relations, Political Economy, Post Colonialism, Domestic Work, and Postcolonial Theory
Political Geography:: Latin America and Paraguay

75. The Economic Impact of Political Instability and Mass Civil Protest

Author:: Samer Matta, Michael Bleaney, and Simon Appleton
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:: An extensive literature has examined the economic effects of non-violent political instability events. Nonetheless, the issue of whether economies react differently over time to such events remains largely unexplored. Using synthetic control methodology, which constructs a counterfactual in the absence of political instability, we estimate the output effect of 38 regime crises in the period 1970-2011. A crucial factor is whether crises are accompanied by mass civil protest. In the crises accompanied by mass civil protest, there is typically an immediate fall in output which is never recovered in the subsequent five years. In crises unaccompanied by protest, there are usually no significant effects. Furthermore, this paper provides new evidence that regime crises (with and without mass civil protest) have heterogeneous (country-specific) effects on output per capita.
Topic:: Economics, Political Economy, Regime Change, Political stability, Economic Growth, Protests, Economic Policy, and Civil Unrest
Political Geography:: Global Focus

76. 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

77. 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

78. The political economy of Kazakhstan. A case of good economics, bad politics?

Author:: Simon Commander
Publication Date:: 10-2021
Content Type:: Working Paper
Institution:: Center for Social and Economic Research - CASE
Abstract:: Can autocracies and their associated institutions successfully implement economic policies that promote growth and investment? Can ‘good economics’ somehow offset the effects of ‘bad’ politics? Kazakhstan is a case where an autocratic regime has actively projected market-friendly policies and attracted significant amounts of incoming investment. These policies are to some extent reflected in the country’s governance ratings, although there has been a significant amount of investment disputes that question the attachment to the rule of law. Moreover, the political regime remains strongly personalised around the founder President, his family and associates. This is reflected in the economics of the autocracy whereby a large public sector and a set of privately held businesses coexist to mutual benefit. The latter have been formed around a very small number of highly connected individuals whose initial accumulation of assets allows them also to act as necessary gatekeepers for entrants. Competition as a result remains limited in both economic and political domains. Yet, uncertainties over the future leadership, along with latent rivalry over access to resources and markets, make the political equilibrium quite fragile. In short, ‘bad’ politics both squeezes the space for, and distorts the benefits from, ‘good’ economics.
Topic:: Political Economy, Politics, Economic Growth, Investment, and Autocracy
Political Geography:: Central Asia and Kazakhstan

79. The Political Economy of India’s Transition to Goods and Services Tax

Author:: Chanchal Kumar Sharma
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: What kept the Goods and Services Tax (GST) from becoming a reality in India for a quarter of a century after the adoption of the structural adjustment programme in 1991? What made it possible in 2016? To what extent the Indian model of GST reflects a compromise between the need to keep fiscal federalism intact and to respond to a more global economic imperative? To what extent India’s transition to a concurrent dual GST has brought about a change in the principles, rules, frameworks, and institutions guiding intergovernmental fiscal interactions? This paper investigates these issues and shows that the shifts in the indirect tax regime in India since independence have taken place within the structural context of constitutional rules, the economic policy paradigm and political dynamics. Party congruence after 2014 helped to facilitate the introduction of the GST, but the shape thereof was strongly marked by path-dependent logics and the role of state governments as institutional veto players. In addition, the paper examines the ways in which India’s transition to a concurrent dual GST has brought about a fundamental change in the principles, rules, frameworks, and institutions guiding intergovernmental fiscal interactions.
Topic:: Development, Political Economy, Governance, Tax Systems, Institutions, and Services
Political Geography:: India and Asia

80. When the wolf guards the sheep: confronting the industrial machine through green extractivism in Germany and Mexico

Author:: Alexander Dunlap and Andrea Brock
Publication Date:: 01-2021
Content Type:: Working Paper
Institution:: Centre for Global Political Economy, University of Sussex
Abstract:: Deploying an anarchist political ecology approach, this paper compares coal mining in Germany with wind energy development in Mexico. The paper outlines some principles from green anarchy to develop important values for anarchist political ecology, illuminating neglected issues that highlight the colonial nature of the industrial system responsible for the present state of ecological and climate crisis. After highlighting the normalizing and self-reinforcing nature of industrial systems, we turn to examine RWE’s mining operations in the German Rhineland. Here, we discuss the example of RWE’s Hambach mine, the world’s largest open-cast lignite coal mine that—while strongly resisted—is slowly destroying large parts of the Hambacher Forest every year. This destruction is justified by RWE’s deployment of green economic recultivation or ‘offsetting’ initiatives and legitimized by their corporate social technologies that attempt to marginalize and pacify militant resistance in the area. After delving into RWE’s attempts at ‘sustainable’ mining, we then turn to explore wind energy development in one of the greatest wind energy generations sites in the world, the Isthmus of Tehuantepec region of Oaxaca, Mexico—known locally as Istmo. Regarded as a climate change mitigation strategy, wind energy in the Istmo is having similar impacts to traditional extractive industries, not only in how developers acquire land, but also how local indigenous groups that contest the construction of these operations are repressed. The following section will compare and discuss the similarities, differences and relationships between coal and wind energy extraction. Here, we coin the “renewable energy-extraction nexus” to describe how conventional and so-called renewable energy systems are dependent on each other, collaborate, and together expand and intensify industrial development and socio-ecological degradation in a rush to grab all the vital energies of the earth. We conclude by arguing that the green economy is renewing destruction, not only by ‘greening’— thus legitimizing — inherently unsustainable industrial activities but by expanding such activities and relationships at the cost of social health and ecological diversity.
Topic:: Energy Policy, Political Economy, Renewable Energy, Wind Power, Coal, Sustainability, and Anarchism
Political Geography:: Germany and Mexico

81. An Analysis of Adjustment Challenges of Academia Returns Migrants: An Evidence from South Asia

Author:: Syed Anwaar UI Hassan, Sadaf Mahmood, Muhammad Shabbir, and Uzma Niaz
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: South Asian Studies
Institution:: Department of Political Science, University of the Punjab
Abstract:: The principal objectives of this research were to analyze their reintegration challenges and to dig out the way to use their social and human capital for getting benefit from the international political economy. Qualitative data were obtained from sixteen highly qualified return migrants in the universities of Faisalabad. Purposive and snowball sampling techniques were adopted to reach the respondents and in-depth interviews with them were conducted with the help of an interview guide. Thematic analysis was applied on the bases of case studies. The return migrants were facing multiple challenges at the institutional, political, and economic levels. They were less paid as they can get better salaries internationally. There is no channel to utilize their human and social capital appropriately that can be beneficial for enhancing the role of the country in the global political economy. The difficulties in the diffusion of new ideas, mismanagement at the professional level, cultural shock, lack of proper infrastructure, and political interference in academic institutions remained challengeable for them. The country should better utilize the capital of the highly qualified return migrants to uplift the political economy of the country.
Topic:: Migration, Political Economy, Immigrants, Academia, and Social Capital
Political Geography:: South Asia and Asia

82. Will corporate debt choke the post-COVID-19 recovery?

Author:: Frederico Mollet
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: European Policy Centre (EPC)
Abstract:: Europe’s economic recovery is threatened by the corporate debt overhang created in the wake of the pandemic. Even as vaccines roll out, Europe faces the prospect of a prolonged retrenchment as indebted firms pull back investments and repair their balance sheets. Insolvency procedures have gradually improved over the past decade in Europe, but decisive and swift public action is needed to take advantage of these reforms. Given the scale of the crisis, Frederico Mollet argues in favour of a comprehensive European restructuring strategy. EU member states and the Commission must step in to provide the resources, guidance, and coordination necessary to push through this monumental restructuring. This strategy would furthermore benefit from common European guidelines and criteria for creditors and debtors. It will not only increase the likelihood of success but also protect the level playing field. Lack of a clear strategy and coordinated approach will result in a drawn-out restructuring process that pushes too many viable firms into liquidation and permanently hampers the economic recovery. Centring on private restructurings would also minimise the use of public funds at a time when governments have to deal with multiple competing fiscal pressures.
Topic:: Debt, Political Economy, and Economic Recovery
Political Geography:: Europe

83. The EU–UK relationship: It is what it is

Author:: Fabian Zuleeg and Jannike Wachowiak
Publication Date:: 02-2021
Content Type:: Working Paper
Institution:: European Policy Centre (EPC)
Abstract:: The EU–UK Trade and Cooperation Agreement might have pulled both sides back from the brink of a no-deal cliff edge, but it remains a shaky foundation for the next stage of EU–UK relations. Both sides must invest in the relationship and rebuild trust to prevent any conflict from escalating into a tit-for-tat. Or else, they risk the collapse of the deal and the return to a no-deal-like state. In the first months of its new phase, the relationship is already off to a rocky start. The rows over the diplomatic status of the EU mission in London and the Commission’s (now reversed) decision to trigger Article 16 of the Northern Ireland Protocol expose the volatility of the relations and the importance of good communication and trust. The hope for a deal came with the expectation that it would provide the foundation upon which a closer relationship could be constructed over time. It now seems more likely that it will be the basis for a diverging – and at times conflicting – relationship, with little prospect for a significantly closer economic relationship anytime soon. There seems little political appetite on both sides to build on the economic settlement meaningfully, which would require a significant shift of red lines. Previous expectations that a deal would pave the way for outstanding issues, such as the EU granting equivalence for financial services, have also diminished. Given both the political climate and many red lines, the agreed thin economic settlement may be the most we can expect.
Topic:: International Relations, Political Economy, Regional Cooperation, Treaties and Agreements, European Union, and Trade
Political Geography:: United Kingdom and Europe

84. Updating the European industrial strategy for the post-pandemic world

Author:: Marta Pilati and Frederico Mollet
Publication Date:: 03-2021
Content Type:: Policy Brief
Institution:: European Policy Centre (EPC)
Abstract:: On 27 April, the European Commission is expected to publish an update to their 2020 Industrial Strategy, a blueprint for an assertive European industrial policy that drives the digital and green transitions. While the current strategy’s broad principles continue to hold, it must now adapt to the post-pandemic world’s challenges. Furthermore, the original strategy only provided a high-level roadmap, with many areas requiring further development. Frederico Mollet and Marta Pilati break down European industry’s weaknesses and potential areas of success, the effects of COVID-19 this past year, key points of the 2020 Industrial Strategy and its relevance for Europe and beyond. They outline 16 recommendations which would strengthen the design and implementation of the programmes outlined in the current strategy, across four themes: finance, industrial ecosystems and alliances, technology transfer, and strategic autonomy.
Topic:: Development, Political Economy, European Union, Digital Economy, Green Technology, Industry, COVID-19, Strategic Autonomy, and European Commission
Political Geography:: Europe

85. The Industrial Strategy refresh: A new opportunity to reboot the EU’s industrial innovation performance

Author:: Alison Hunter
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: European Policy Centre (EPC)
Abstract:: The EU’s forthcoming Industrial Strategy update aims to put Europe’s industry at the core of the Union’s efforts to improve competitiveness. To achieve this, the Union must upgrade its policy and investment framework in a way that supports collaboration on industrial innovation across the EU. Although the EU has made some gains when it comes to boosting industrial innovation, recently, a disjointed framework has begun to emerge with two separate ‘tiers’ of support: one geared towards key industry initiatives, such as Industrial Alliances and Important Projects of Common European Interest (IPCEIs); the other towards place-based industrial innovation, driven primarily by EU regions, such as Cluster Collaborations and Smart Specialisation Partnerships. To maximise the impact of these collaborative efforts and to generate a connected, Europe-wide industrial ecosystem, we need an industrial innovation pipeline for the whole of the EU. Amid growing concerns about an uneven recovery from the pandemic, the EU cannot afford to perpetuate the current innovation divide or widen the distance between industrial winners and losers. The new Industrial Strategy update should, therefore: spearhead efforts to close the gap between the EU’s ‘Tier 1’ and ‘Tier 2’ industrial innovation support landscape; improve the analysis of the barriers that prevent many EU regional industrial innovation systems from flourishing; and promote an ‘Innovation Everywhere’ agenda, focusing on EU territories where industrial innovation continues to fall behind.
Topic:: Political Economy, European Union, Innovation, and Industry
Political Geography:: Europe

86. China’s grand industrial strategy and what it means for Europe

Author:: Frederico Mollet
Publication Date:: 04-2021
Content Type:: Policy Brief
Institution:: European Policy Centre (EPC)
Abstract:: In its 14th Five-Year Plan, China has mapped out a grand economic and industrial strategy that upends many of the assumptions that underpin the EU's approach - how can the Union respond? With this new plan, the EU can expect tougher competition and greater protectionism in its economic relations with China. A further blurring of the public-private sector distinction in the country's economic model will make it harder to combat unfair Chinese competition. And while China is actively courting foreign investment, it is also signalling greater protectionism to products not made in China, which will lead to European investors' and exporters' interests diverging. To balance the scales, the EU should adapt its own strategy by: continuing to develop trade instruments to combat unfair competition at home and abroad; ensuring that these instruments and institutions can respond to unfair competition from private companies benefiting from state capital investment; ensuring that the extensive and often opaque government holdings in private firms are reflected in foreign direct investment and export controls; incorporating China's attempts to reconfigure supply chains into its own assessment of strategic dependencies, identifying areas that could become vulnerable; prioritising the improvement of access to the Chinese market for goods and services produced in Europe; developing alternative sources of growth, and boost demand and reduce barriers within the Single Market to offset greater Chinese protectionism; and ensuring that its industrial policy efforts will enable European industry to match China's developments. The present moment may mark a turning point in EU–China relations: in a little over three months, an agreement on an investment treaty was followed by sanctions and countersanctions. Geopolitical conflict ratchets up between China and the US. Beijing's new economic course will reshape its global relationships. China's protectionist turn and growing one-sided dependencies will threaten Europe's long-term strategic autonomy and undercut any attempts to construct a balanced approach to EU–China relations. If the EU's multi-track strategy is to work, a concerted effort is required to preserve economic parity and balance between the two powers.
Topic:: International Relations, Political Economy, European Union, Grand Strategy, Industry, and Supply Chains
Political Geography:: China, Europe, and Asia

87. Recovery and reform in the EU’s most vulnerable regions

Author:: Alison Hunter and Marta Pilati
Publication Date:: 06-2021
Content Type:: Policy Brief
Institution:: European Policy Centre (EPC)
Abstract:: Europe’s most vulnerable regions, characterised by persistent low growth and poverty, face a systemic lack of specific EU support. These regions display particularly high levels of vulnerability to the social, economic and territorial impacts of COVID-19, which will affect their recovery trajectories. They risk being left further behind in the EU’s complex pathway towards ‘a green and digital recovery’. The Union’s lack of focus and action for investing in these most vulnerable regions must be addressed. First and foremost, EU institutions and member states should recognise that some territories will struggle much more than others in their recovery trajectories. Ignoring their plight would have potentially far-reaching consequences. The EU’s ‘convergence machine’ could be damaged irreparably, with long-term – and potentially political – consequences. Alison Hunter and Marta Pilati continue their extensive research on the Union’s low-growth, poor regions, calling for the founding of a specific EU initiative to support them as well as further targeting by the existing policy architecture. In particular, they recommend: creating an EU policy space for regions experiencing long-term low growth and poverty, to promote the value and visibility of place-based support; aligning Cohesion Policy and the Recovery and Resilience Facility for improved policy coherence and greater investment impact; and tailoring support for growth-enhancing reforms in the EU’s most vulnerable regions. The EU’s green and digital recovery strategy fails to account for the specific needs of its poor and low-growth regions. Existing disparities and fragmentation challenges across the Union could widen or even become entrenched, casting new doubts on the EU’s ability and commitment to strengthen its convergence agenda and execute a just transition. The fallout could lead to a rise in territorial and political tensions while leaving many vulnerable places behind. Hunter and Pilati outline an agenda for a new EU initiative that champions reform support for these vulnerable territories and improves their prospects for a digital and green recovery.
Topic:: Political Economy, Poverty, Reform, European Union, Digital Economy, Economic Growth, Green Technology, Recovery, COVID-19, and Economic Recovery
Political Geography:: Europe

88. How to get European businesses to digitalise

Author:: Frederico Mollet
Publication Date:: 07-2021
Content Type:: Policy Brief
Institution:: European Policy Centre (EPC)
Abstract:: Europe’s underperforming tech sector and reliance on foreign technologies has long alarmed its policymakers. But a significant – and often overlooked – factor in the EU’s economic underperformance over the last two decades is its slow business digitalisation. EU industry, especially SMEs, struggles with the prosaic challenge of integrating digital technologies into its business models and operations. The preoccupation tends to be on how to foster new digital start-ups. But what about the digitalisation of existing firms? The EU budget and recovery fund are armed with a range of new EU funding streams and programmes to tackle this challenge. With its 2030 targets and new policy framework, the EU aims to catch up with the previous generation of digital technologies and ensure that it does not miss out on the next wave of transformational change. Otherwise, Europe will fall behind its economic competitors even further. But there are still some gaps in the EU’s game plan for business digitalisation. Frederico Mollet outlines several areas where the new policy framework can be optimised, and new initiatives would be worthwhile: Additional funding should be mobilised from Cohesion Policy funds. Business digitalisation is a critical factor in regional convergence, and so an increased funding share would be in line with the policy’s main objectives. The Commission should use its coordinating and convening powers to get banks to commit to a best practice code, to assess digitalisation loans and improve their staff’s digital knowledge. Public authorities should leverage private partners. Many firms lack the awareness and information necessary to digitalise, but a number of ‘access points’ and private sector networks (e.g. finance providers, B2B businesses, supply chain networks) can reach them. The EU should consider complementing the design and implementation of European Digital Innovation Hubs and transition pathways – its main programmes for supporting business digitalisation directly – with 5 additional components. Taken together, these recommendations will bolster the funding available for business digitalisation, tackle some of the critical barriers to finance, and optimise the delivery of the Commission’s programmes.
Topic:: Political Economy, Science and Technology, European Union, Business, and Digitalization
Political Geography:: Europe

89. Rethinking EU economic governance: The Stability and Growth Pact

Author:: Francesco De Angelis and Frederico Mollet
Publication Date:: 11-2021
Content Type:: Policy Brief
Institution:: European Policy Centre (EPC)
Abstract:: It is time to reimagine the EU’s economic governance. In early 2021, the EPC set out to do just that in its Rethinking EU Economic Governance Task Force. Drawing on insights from participating experts, academics and policymakers, this first Policy Brief in a series of EPC publications outlines how the debate on the Stability and Growth Pact (SGP), the EU’s framework for fiscal and macroeconomic surveillance, has evolved and the reform options that have surfaced. There is broad dissatisfaction with the SGP and how it has fared in an environment of prolonged low-interest rates, missed inflation targets and low growth. In February 2020, the European Commission launched a review of the SGP in an attempt to address its shortcomings, but it was quickly put on hold by COVID-19, when the fiscal rules were suspended. Half a year later, the Commission is finishing what it started. We are in a drastically different world since the European Commission launched the review. Not only has government debt increased significantly, but regional, economic and social divides have worsened, policymakers face inflationary pressures for the first time in decades, and the Recovery and Resilience Facility and accompanying EU-level bond issuance fundamentally changed the EU’s economic architecture. In parallel, there is a widespread acknowledgement that averting, as well as adapting to, the climate crisis requires a steep increase in public investment. Thanks to the EPC Task Force’s ongoing work, Francesco De Angelis and Frederico Mollet can pinpoint the SGP’s major flaws, post-COVID-19 challenges, and five broad categories of reform options: Interpretative flexibility to smooth fiscal adjustment paths and potentially place less emphasis on problematic indicators. Moderate non-treaty reforms to reduce complexity and procyclicality and increase enforceability. The ‘golden rule’ to exempt some public investments from the fiscal rules. Central fiscal capacity for macroeconomic stabilisation. Off-balance-sheet investments to increase public investment.
Topic:: Political Economy, Governance, European Union, Economic Growth, COVID-19, Economic Stability, and European Commission
Political Geography:: Europe

90. The Political Economy of Syria’s Physical Fragmentation and Dependence

Author:: Samir Aita
Publication Date:: 08-2021
Content Type:: Working Paper
Institution:: The Geneva Centre for Security Policy
Abstract:: It is difficult to imagine how the Syrian conflict could be resolved through a political process alone that does not directly involve the combating forces in Syria – namely the Syrian army and its associated militias linked to the power system in Damascus, the Syrian Democratic Forces (SDF) and their Democratic Union Party (PYD) power system, as well as the “opposition” factions and their respective backers, i.e. Iran and Russia, the USA and Turkey. Similarly, it is difficult to imagine such a solution without addressing the political economy that has emerged and that now underpins these forces’ power, the warlords’ chaos-inducing advantages gained from the country’s physical fragmentation, the hidden or open bargains between these warlords and other powers, and the deterioration of Syrians’ living conditions to unbearable levels. The current situation, where the country’s physical fragmentation has reached relative stability, could persist for a long time at the people’s expense. However, several factors could reignite the conflict: growing competition over resources and rent-seeking activities, even within each area of influence; the ongoing decline in much-needed international aid; and the further deterioration of the situation expected in Lebanon and its consequences for Syria.
Topic:: Economics, Political Economy, Politics, Conflict, Peace, and Strategic Stability
Political Geography:: Middle East and Syria

91. Volume 71 Issue 2

Author:: Gökhan Karabulut
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: Istanbul Journal of Economics
Institution:: Istanbul University Faculty of Economics
Abstract:: Istanbul Journal of Economics-İstanbul İktisat Dergisi is an open access, peer-reviewed, scholarly journal published two times a year in June and December. It has been an official publication of Istanbul University Faculty of Economics since 1939. The manuscripts submitted for publication in the journal must be scientific and original work in Turkish or English. Being one of the earliest peer-reviewed academic journals in Turkey in the area of economics, Istanbul Journal of Economics-İstanbul İktisat Dergisi aims to provide a forum for exploring issues in basicly economics and publish both disciplinary and multidisciplinary articles. Economics is the main scope of the journal. However, multidisciplinary and comparative approaches are encouraged as well and articles from various social science areas such as sociology of economics, history, social policy, international relations, financial studies are welcomed in this regard. The target group of the journal consists of academicians, researchers, professionals, students, related professional and academic bodies and institutions.
Topic:: Economics, Globalization, International Trade and Finance, Oil, Political Economy, Natural Resources, Exchange Rate Policy, and Industry
Political Geography:: Europe, Turkey, and Asia

92. Pork, infrastructure and growth: Evidence from the Italian railway expansion

Author:: Roberto Bonfatti, Giovanni Facchini, Alexander Tarasov, Gian Luca Tedeschi, and Cecilia Testa
Publication Date:: 07-2021
Content Type:: Working Paper
Institution:: Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:: This paper studies the role played by politics in shaping the Italian railway network, and its impact on long-run growth patterns. Examining a large state-planned railway expansion that took place during the second half of the 19th century in a recently unified country, we first study how both national and local political processes shaped the planned railway construction. Exploiting close elections, we show that a state-funded railway line is more likely to be planned for construction where the local representative is aligned with the government. Furthermore, the actual path followed by the railways was shaped by local pork-barreling, with towns supporting winning candidates more likely to see a railway crossing their territory. Finally, we explore the long-run effects of the network expansion on economic development. Employing population and economic censuses for the entire 20th century, we show that politics at a critical juncture played a key role in explaining the long-run evolution of local economies.
Topic:: Development, Political Economy, Infrastructure, and Railways
Political Geography:: Europe and Italy

93. Politicians' neighbourhoods: Where do they live and does it matter?

Author:: Olle Folke, Linna Martén, Johanna Rickne, and Matz Dahlberg
Publication Date:: 04-2021
Content Type:: Working Paper
Institution:: Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:: This paper studies the political economy of local politicians' neighborhoods. We use detailed population-wide data on the location of politicians’ and citizens' homes and their socioeconomic traits. We combine this information with neighborhood-level data on building permits and proposals to close schools. A descriptive analysis uncovers that politicians live in neighborhoods with more socio-economically advantaged people and more of their own party’s voters. Next, we analyze whether having politicians in a neighborhood reduces the likelihood that local public "bads'' are placed there. This analysis compares home neighborhoods for politicians with different degrees of political power (ruling majority or opposition) and where power was won in a close election. We find negative effects on approved building permits for multifamily homes and proposals to close schools. This result is most likely explained by undue favoritism. We conclude that local politicians live in advantaged neighborhoods that they shield from local public bads.
Topic:: Political Economy, Inequality, Geography, and Politicians
Political Geography:: Global Focus

94. The political economy of pandemic preparedness and effectiveness

Author:: Cullen S. Hendrix
Publication Date:: 07-2021
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: The success of countries in the Organization for Economic Cooperation and Development (OECD) in controlling the COVID-19 pandemic has varied greatly. Explanations for the differences fall into four broad categories: political/economic, cultural/social, demographic/geographic, and policy-oriented. This paper uses Bayesian model averaging to assess the explanatory power of 21 potential covariates. It shows that standard political economy variables that predict greater investment in public health, such as GDP per capita and level of democracy; both general and pandemic-specific measures of government effectiveness; and demographic factors that predict increased vulnerability, such as the share of population that is elderly or obese, do not explain the differences in outcomes. The key factors appear to have been interdictability (the ability to tightly control borders and effectively restrict or monitor entrants at a limited number of entry ports), the early adoption of stronger international travel restrictions, and a female head of government.
Topic:: Political Economy, Crisis Management, COVID-19, and OECD
Political Geography:: Global Focus

95. Preventing Violent Islamic Radicalization: Experimental Evidence on Anti-Social Behavior

Author:: Pedro C. Vicente and Inês Vilela
Publication Date:: 10-2021
Content Type:: Working Paper
Institution:: Kellogg Institute for International Studies
Abstract:: Violence perpetrated by radicalized Muslims is a major problem around the world. We collaborated with the main Islamic authority in Mozambique, which sponsored two randomized interventions to prevent violence related to youth radicalization: a religious campaign against extremist views of Islam, targeting change in beliefs; and a training module on entrepreneurship and employment, aiming to increase the opportunity cost of conflict. Our measurement focuses on anti-social behavior in a Joy-of-destruction lab game. We find that only the religious treatment decreased the propensity to destroy the payoffs of others. Consistently, surveys show increased trust in the state and decreased support for extremism.
Topic:: Development, Political Economy, Religion, Economic Growth, Youth, Conflict, Violence, and Peacebuilding
Political Geography:: Africa and Mozambique

96. Toxic Conflict: Understanding Venezuela's Economic Collapse

Author:: Juan Carlos Fernández-Rodríguez
Publication Date:: 11-2021
Content Type:: Working Paper
Institution:: Kellogg Institute for International Studies
Abstract:: This paper discusses the causes of Venezuela’s recent economic collapse, the largest in modern Latin American economic history and one of the largest in modern world history outside of wartime. I argue that Venezuela’s economic implosion is a combination of two crises. The first one reflects the standard unraveling of a populist macroeconomic cycle fed by overspending during a resource boom, while the second one reflects the severing of the country’s trade and financial links with the global economy. This severing is the consequence of the decision by political actors to adopt “scorched earth” strategies with large negative aggregate economic spillovers in their fight for power. I argue that the inability of Venezuela’s high-stakes, winner-take-all political system to deal with the large negative 2014–16 trade shock precipitated the change in political strategies and the descent into economically destructive political conflict.
Topic:: Development, Political Economy, Democracy, Economic Growth, Conflict, Institutions, and Peacebuilding
Political Geography:: South America and Latin America

97. 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

98. Gender, Selection into Employment, and the Wage Impact of Immigration

Author:: George J. Borjas and Anthony Edo
Publication Date:: 04-2021
Content Type:: Working Paper
Institution:: Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:: Immigrant supply shocks are typically expected to reduce the wage of comparable workers. Natives may respond to the lower wage by moving to markets that were not directly targeted by immigrants and where presumably the wage did not drop. This paper argues that the wage change observed in the targeted market depends not only on the size of the native response, but also on which natives choose to respond. A non-random response alters the composition of the sample of native workers, mechanically changing the average native wage in affected markets and biasing the estimated wage impact of immigration. We document the importance of this selection bias in the French labor market, where women accounted for a rapidly increasing share of the foreign-born workforce since 1976. The raw correlations suggest that the immigrant supply shock did not change the wage of French women, but led to a sizable decline in their employment rate. In contrast, immigration had little impact on the employment rate of men, but led to a sizable drop in the male wage. We show that the near-zero correlation between immigration and female wages arises partly because the native women who left the labor force had relatively low wages. Adjusting for the selection bias results in a similar wage elasticity for both French men and women (between -0.8 and -1.0).
Topic:: Economics, Gender Issues, Political Economy, Labor Issues, Immigration, and Workforce
Political Geography:: France

99. 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

100. China's Belt and Road Initiative in Italy: An Analysis of Financial Cooperation

Author:: Nicola Bilotta
Publication Date:: 05-2021
Content Type:: Working Paper
Institution:: Istituto Affari Internazionali
Abstract:: Financial cooperation is essential to boosting bilateral economic ties, providing firms with more effective instruments to operate in foreign markets. It should come as no surprise, then, that financial cooperation was a pillar of the 2019 Memorandum of Understanding (MoU) reached between Italy and China in support of the latter’s Belt and Road Initiative (BRI). However, a preliminary analysis of BRI-related commercial agreements between Italian financial institutions and their Chinese counterparts shows that they have not resulted in any ground-breaking development. These Memoranda have apparently just added a “BRI” badge to pre-existing trends of collaboration. The BRI-related MoUs in the field of financial cooperation do not, for the time being at least, justify concerns that China may gain an economic foothold in Italy large enough to win it much political influence. A more realistic risk is that these MoUs may undermine a common European approach to China, weakening the negotiating stance of the European Union’s. Paper prepared in the framework of the IAI project “When Italy embraces the BRI”.
Topic:: Foreign Policy, Political Economy, Governance, Finance, and Belt and Road Initiative (BRI)
Political Geography:: China, Europe, Asia, and Italy

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