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1. Asymmetric Trade Dependence: How India Gains from Pakistan Through Re-Export Channels

Author:
Saifullah
Publication Date:
01-2026
Content Type:
Journal Article
Journal:
Journal of Political Studies
Institution:
Department of Political Science, University of the Punjab
Abstract:
The asymmetric trade interdependence between India and Pakistan is examined using the Theory of Complex Interdependence. Despite the political hostility and official trade prohibition, India has continued to beeconomically blessed by Pakistan via third-party re-exporter methods, which are the UAE, Qatar, and Singapore. Despite top-down bilateral trade falling to US$1.2 billion by 2024, compared to US$3 billion in 2018, trade experts believe the value of Indian-origin goods entering Pakistan through a backdoor channel is over US$10 billion annually. Since 2015, the trade balance has consistently been in India's favor, with Pakistan relying heavily on imports from India and having minimal potential for exports. Although this trade agreement brings some benefits to Pakistani consumers, i.e., the chance to have more inexpensive or a variety of goods, it also reveals a significant vulnerability in the Pakistani government's trade policy, which is sluggish and unnecessarily restrictive. The policy implications of the findings concern trade reform, regional interaction, and fostering economic sovereignty in Pakistan.
Topic:
Political Economy, Bilateral Relations, Exports, Trade, Trade Deficit, and Interdependence
Political Geography:
Pakistan, South Asia, India, and United Arab Emirates

2. Economic implications for Europe of a potential reintegration of Iran into the world economy

Author:
Gabriel Felbermayr, Mahdi Ghodsi, Heider Kariem, Robert Stehrer, and Yoto V. Yotov
Publication Date:
02-2026
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
How would fundamental political change in Iran, leading to a democratic system with a free and rules-based economic order, affect Germany and the EU economically? In the event of change, sanctions could be scaled back, allowing Iran to rejoin the global economy. This study quantifies the economic effects of such a transformation. It neither advocates for nor legitimises the lifting or easing of sanctions under the current regime or without far-reaching and credible reforms that fully address the concerns underlying the sanctions currently in place. Using the newest available data and quantitative methods, the results indicate that lifting EU sanctions alone could raise Iran’s real GDP by more than 80% in the long run while generating moderate but economically meaningful gains for Germany and the EU of around 0.3-0.4% of GDP. These gains are driven by expanded trade, lower energy and input prices, and improved allocative efficiency. When sanctions removal is combined with plausible scenarios of productivity catch-up with Turkey or South Korea, Iran’s GDP would increase by 240-388% and the gains for Europe would increase further, underscoring the strong complementarity between trade integration and productivity growth. Moreover, Iran’s reintegration would reduce energy price volatility, improve the security of maritime trade routes, and lower migration pressures. Overall, the findings suggest that a negotiated transition and rules-based reintegration of Iran would generate substantial mutual economic benefits while contributing to regional and global stability.
Topic:
Markets, Political Economy, Foreign Direct Investment, Sanctions, European Union, Economy, Inflation, Energy, and Trade Integration
Political Geography:
Europe, Iran, and Germany

3. From Ideas to Policy: Q&A with Ibrahim Awad

Author:
Omar Auf
Publication Date:
03-2025
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
Is it possible to imagine, let alone move toward a different global political-economic order? Ibrahim Awad believes conferences and the exchange of ideas have a role to play in moving such a reality forward
Topic:
Economics, Political Economy, Politics, Neoliberalism, Interview, and International Order
Political Geography:
Global Focus

4. Peripheral Growth Models and the Global Economy: A Second Image IPE Perspective

Author:
Michael Schedelik and Andreas Nölke
Publication Date:
07-2025
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The paper departs from the perspective of “second image IPE,” i.e., the need to closely combine Comparative Political Economy (CPE) and International Political Economy (IPE). More specifically, it focuses on the observation that the growth models in the (former) periphery of the global economy (a typical focus of CPE) are strongly shaped by their interdependencies with the structural transformations of the global economy (as studied by IPE). At the same time, the changes within the growth models of large economies in this periphery (CPE) can have a major impact on global interdependencies (IPE). For example, the rise of China as a major player in world trade and investment (“China shock”) has had a substantial impact on growth models elsewhere in the periphery, via import penetration, direct investment, and export demand. This paper shows how these growth models shape (and are shaped through) international interdependencies by analyzing (1) the effects of global commodity cycles on the growth experience of several major exporters of primary resources, such as Brazil or Indonesia, during and after the recent commodity boom. (2) We further elaborate on the effects of global financial cycles on peripheral countries, particularly those pursuing debt-led growth models, such as South Africa or Turkey. (3) We finally point to the role of global production chains and foreign direct investment for FDI-led growth models of manufacturing exporters such as Thailand or Vietnam in South East Asia.
Topic:
Political Economy, Foreign Direct Investment, Economy, Economic Growth, Commodities, Emerging Economies, and Growth Models
Political Geography:
Global Focus

5. Shifting Paths? The Evolution of Southern European Growth Trajectories Between the Global Financial Crisis and the Covid Pandemic

Author:
Fabio Bulfone, Mischa Stratenwerth, and Arianna Tassinari
Publication Date:
06-2025
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper traces the growth trajectories of the Southern European economies (Greece, Italy, Portugal, and Spain) from the financial to the covid crisis. From a review of the comparative political economy literature focusing on Southern Europe, we derive three propositions regarding the growth profile, the development of high value-added services and manufacturing exports, and employment outcomes. To assess the accuracy of these propositions, we conduct growth decompositions based on import-adjusted demand components as well as on sectoral output and employment indicators. The data show that Southern European economies are similar in that export-led growth has not been sufficient to boost aggregate growth, stimulate high value-added services or manufacturing, reverse pro-cyclical employment declines, or create high-wage employment opportunities. But the Southern European economies also differ, both in terms of their sectoral growth profiles and their aggregate performance. In the second half of the decade, Portugal and Spain managed to combine domestic demand and exports to achieve stronger growth than Italy and Greece. Sectoral developments in Portugal and Spain (and to a lesser extent in Italy) tentatively suggest a potential “Iberian growth path” that is compatible with euro area constraints but ultimately peripheral. The paper concludes by considering the empirical and theoretical implications of these findings for the study of the Southern European model of capitalism.
Topic:
Political Economy, Economic Growth, Exports, and Austerity
Political Geography:
Europe, Greece, Spain, Italy, Portugal, and Southern Europe

6. The Political Economy of Starmer's Labour

Author:
Colm Murphy, Sam Freedman, Morgan Jones, Theo Bertram, and Kate Alexander Shaw
Publication Date:
03-2025
Content Type:
Video
Institution:
Mile End Institute, Queen Mary University of London
Abstract:
The first eight months of the new Labour government have been tumultuous, and nowhere more than in the politics of economics. Rachel Reeves has hiked taxes and increased borrowing, but her Treasury are also in tense negotiations with other departments over spending constraints. The Bank of England is trying to cut interest rates, but in a volatile market environment highly sensitive to developments across the Atlantic. The Government has already made itself vocal enemies ranging from tractor-driving farmers to child poverty campaigners, and businesses, trade unions, and lobbyists are currently battling to shape its policies on workers rights, planning reform, oilfields and airport expansions. What have we learned about Labour's economic policies? Do they have a coherent strategy? How united is the Labour Party and what are the emerging tensions? What would a successful economic strategy look like, given the UK's longstanding weaknesses of underinvestment and regional inequality and newer dangers like trade wars and recessionary risk? In this Mile End Institute webinar, Dr Colm Murphy, Sam Freedman (author of Britain's biggest politics Substack), the political writer Morgan Jones, former Number 10 advisor Dr Theo Bertram, and the economist Dr Kate Alexander Shaw explore the political economy of Keir Starmer's Labour Party.
Topic:
Political Economy, Political Parties, Labour Party, and Keir Starmer
Political Geography:
United Kingdom and Europe

7. Flawed by Design: What al-Sisi’s Egypt Reveals About the Myth of Authoritarian Efficiency

Author:
Johannes Späth
Publication Date:
07-2025
Content Type:
Policy Brief
Institution:
Austrian Institute for International Affairs (OIIP)
Abstract:
This policy analysis challenges the rising narrative that authoritarian regimes, despite their repressive nature, offer superior governance efficiency and contribute to regional stability. Using Egypt under President Abdel Fattah al-Sisi as a case study, it argues that the perception of authoritarian efficiency is not only analytically flawed but dangerously misleading for international policymakers. European and Western engagement with Egypt continues to rely on flawed assumptions about authoritarian capacity and stability. Financial support, arms sales, and diplomatic legitimacy are extended largely unconditionally, under the illusion that al-Sisi’s regime can deliver long-term order. This approach ignores the structural fragility baked into Egypt’s political economy, and risks enabling a trajectory toward fiscal implosion and social unrest. The paper argues for a strategic recalibration. European policymakers should shift from regime-centered engagement to resilience-centered investment, focusing on areas like education, climate adaptation, and local economic empowerment that outlast regime cycles. Europe’s current approach risks buying short-term quiet at the cost of long-term instability. A policy recalibration grounded in realism, not regime accommodation, is both necessary and overdue.
Topic:
Political Economy, Bilateral Relations, Authoritarianism, European Union, Regime Security, Regional Stability, and Regime Legitimation
Political Geography:
Europe, North America, and Egypt

8. Identifying Mutual Interests: How Donor Countries Benefit from Foreign Aid

Author:
Tobias Heidland, Maximilian Michael, Moritz Schularick, and Rainer Thiele
Publication Date:
06-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Official development assistance (ODA) is widely studied for its impact on recipient countries, but its effects on donor countries remain underexplored. To address this gap systematically, we develop a conceptual framework for understanding when foreign aid generates measurable returns for donor countries as well as those cases when donor and recipient interests align—what we term mutual interest ODA. We categorize potential donor benefits into three domains: economic, geopolitical, and security-related, and distinguish these benefits by their timing and degree of directness. We then systematically survey the empirical evidence on donor benefits, assessing the empirical credibility and magnitude of estimated effects and pointing out research gaps. We find consistent evidence of substantial donor benefits across all three domains. A key insight is that aggregate aid flows often mask significant variation: The returns to donors depend critically on the type of aid, delivery modality, and recipient context. These findings have important implications for both academic and policy debates on the effectiveness, political sustainability, and future direction of development aid.
Topic:
Climate Change, Globalization, Health, International Trade and Finance, Migration, Political Economy, Foreign Aid, and Sustainable Development
Political Geography:
Africa, Europe, Asia, and Americas

9. Hegemony and International Alignment

Author:
Fernando Broner, Alberto Martin, Josefin Meyer, Christoph Trebesch, and Jiaxian Zhou Wu
Publication Date:
05-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This article explores the interplay between economic hegemony and political alignment. Using theoretical and empirical insights from Broner et al. (2024), we posit that hegemonic states, such as the U.S., foster political alignment, which enhances globalization. We use UN voting data to proxy for international alignment and show that hegemons induce alignment. This data has shortcomings, however. UN voting only covers the post-WWII period, refers to a narrow set of issues, and displays little time variation. As for military alliances, they were not widely used before the mid-20th century. We propose an alternative measure of alignment based on international treaties.
Topic:
Globalization, International Trade and Finance, Political Economy, Treaties and Agreements, Hegemony, Multipolarity, and Geoeconomics
Political Geography:
Global Focus and United States of America

10. The Impact of the Far Right on Mainstream Politics: Evidence from the Front National

Author:
Anthony Edo, Thomas Renault, and Jerome Valette
Publication Date:
12-2025
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
How does the electoral success of a far-right political force shape the strategies and policy platforms of mainstream candidates? We answer this question by exploiting the political shock of the creation of the Front National, an antiimmigration party, in 1972 and its sudden electoral breakthrough in the 1980s. Through a comprehensive textual analysis of candidate manifestos in French parliamentary elections from 1968 to 1997, we find that right-wing candidates respond to local far-right success, measured as voting shares, by amplifying the salience of immigration in their manifestos. They also adopt more negative positions on immigration and increasingly associate it with issues such as crime and the welfare state. In contrast, the ideological positions of left-wing candidates do not shift in response to far-right electoral gains. We finally show that the strategic adjustments of right-wing candidates help mitigate electoral losses to far-right competitors.
Topic:
Political Economy, Immigrants, Xenophobia, Political Parties, and Electoral Systems
Political Geography:
Europe and France

11. The New Political Economy of Supply: resources, rare earths and finance

Author:
Philip Andrews-Speed
Publication Date:
08-2025
Content Type:
Policy Brief
Institution:
LSE IDEAS
Abstract:
China is the dominant player in the global low-carbon energy transition in two respects: it has deployed the largest fleet of low-carbon electricity generation capacity in the world, and it dominates several international supply chains for clean energy minerals, metals and equipment. China has installed a massive amount of infrastructure for both solar and wind energy since 2010. The total capacity reached 1,300 GW by the end of 2024, which is more than 45% of the global total. Investment in hydro power and nuclear power also continues. These non-fossil fuels accounted for about 40% of the nation’s power generation in 2024. At the same time, the country has built up the world’s largest electric vehicle industry and is likely to take the lead in the manufacture and use of green hydrogen. This success has been built upon several foundations. Most important are the various policies of central and local government that supported investment and innovation along the clean energy supply chains over two decades or more. In the early days, this relied on technology transfer from abroad. More recently, the development of technology and manufacturing clusters have assisted scaling up and innovation, all supported by abundant and skilled human capital (Hove, 2024). All this adds credibility to Xi Jinping’s pledge to peak carbon emissions by 2030 and ‘strive for’ carbon neutrality by 2060. However, energy and fossil fuel consumption are still rising, as are carbon emissions. Coal is the main culprit as the country has large reserves, and the government sees coal as providing the foundation for energy security. Coal accounted for about 55% of power generation in 2024 and remains an important fuel in some industries. The continued increase in the use of coal will result in the peak of carbon emissions being significantly higher than might have been projected ten years ago. The good news is that the declining rate of GDP growth combined with the increasing electrification of the economy may result in emissions peaking in the next two-to-three years.
Topic:
Political Economy, Natural Resources, Finance, Carbon Emissions, Rare earth elements (REEs), and Energy Transition
Political Geography:
China and Asia

12. U.S. Withdrawal from Afghanistan: Implications for Pakistan's Strategy

Author:
Abdul Ghafoor, Mirwais Kasi, and Umbreen Javaid
Publication Date:
07-2025
Content Type:
Journal Article
Journal:
South Asian Studies
Institution:
Department of Political Science, University of the Punjab
Abstract:
This paper discusses US withdrawal from Afghanistan and its political-economic consequences on Pakistan in a changing regional environment. It underscores the U.S.-Pakistan-Afghanistan relations after 9/11 which started in the U.S. invasion of Afghanistan, in operation enduring freedom on allegations that Taliban harbored Osama bin Laden. His subsequent demise in the year 2011 in Abbottabad, Pakistan, aggravated regional intricacies. Presidents of the United States Barack Obama and Donald Trump progressively sought troop withdrawal, which eventually saw the last withdrawal, August 21, 2021. The study examines the strategic and political-economic reactions of Pakistan especially its strategic depth seeking in Afghanistan. It also evaluates the potential of Pakistan to stabilize and contribute towards the political economy of Afghanistan. The methodology of the study is qualitative content analysis, with the help of NVivo-14 software. Under the Rational Choice Theory, the study examines the decision-making processes of states such as Pakistan to make strategic choices through cost-benefit analysis to navigate the region and enjoy the best avenue to foreign policy choices.
Topic:
Foreign Policy, Political Economy, Military, and Rational Choice Theory
Political Geography:
Pakistan, Afghanistan, South Asia, North America, and United States of America

13. Geoeconomics and Conflict: A Review and Open Questions

Author:
Eoin McGuirk and Christoph Trebesch
Publication Date:
10-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We examine the intersection of two subfields within political economy: geoeconomics and conflict. Geoeconomics is primarily concerned with the use of "economic weapons" of coercion, while the conflict literature mainly focuses on military weapons and war. We propose bridging these two approaches, focusing on the international dimension of conflict. We start by reviewing the existing literature linking both fields, in particular research on the relationship between trade and war and on the use of geoeconomic tools such as foreign aid and sanctions. We then highlight four main directions for future research. First, we call for a broader view of the geoeconomic toolkit, as rogue leaders do not limit themselves to economic coercion. In addition to economic weapons, future research should also consider more aggressive—and often costlier—forms of intervention short of war, including sabotage, cyberattacks, covert operations, and the sponsorship of terrorism or insurgency. Second, we require a better understanding of how geoeconomic tools affect the likelihood of conflict. Do sanctions, strategic tariffs, or military aid provoke or deter war? Third, more research is needed on the domestic political economy of geoeconomic actions and their link with conflict. When and why do governments and citizens support the use of economic versus noneconomic weapons? Finally, we stress the importance of research on explicitly peacemaking tools of diplomacy, including mediation, security guarantees, and transparency initiatives.
Topic:
Globalization, Political Economy, Conflict, and Geoeconomics
Political Geography:
Global Focus

14. Resolving the puzzle of "reversed favoritism" in African agriculture

Author:
Lennart C. Kaplan
Publication Date:
09-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
The political economy literature highlights the redistribution of resources to political support groups - often along regional or ethnic lines - as an axiom of political systems. In contrast to this dominant pattern, Kasara (2007) documents a puzzling result of discriminatory rent extraction by political leaders from farmers in their ethnic home region. Linking a new database on the ethnic and regional affiliation of political leaders to fine-grained survey data, I disentangle ethnic and regional affiliations and show that their intersection explains the phenomenon which I will label in the following “reversed favoritism." More specifically, I provide evidence that agricultural price hikes indeed do not reduce poverty among co-ethnic farmers in the leader's birth region. My results indicate that leaders seem to act politically rational as they only apply this treatment in regions where they enjoy high trust. I show in an exploratory analysis that the counter-intuitive support of discriminatory policies can be explained by transfers in other areas, namely development aid.
Topic:
Agriculture, Political Economy, Ethnicity, Development Aid, and Favoritism
Political Geography:
Africa

15. Rethinking Aid in a Contested World

Author:
Stefan Dercon
Publication Date:
09-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Development aid faces a crisis of budgets, legitimacy, and political alignment. Framed in recent decades as technocratic and benevolent, aid has always been political, shaped by donor and recipient incentives. Its post–Cold War expansion reflected a permissive era of unipolarity and globalization, when Western foreign policy, business, and security establishments provided broad support. That equilibrium has now collapsed. Multipolar rivalry, protectionism, and fragmented domestic coalitions have left aid vulnerable, shallowly supported, and increasingly driven by narrow donor interests. The paper calls for recognition of the need for a globalization 2.0 that enables poorer countries to grow, warning that without such a framework, remaining aid will become more fragmented and ineffective. It also cautions against a euphemistic reliance on “mutual interest,” as evidence of genuine donor–recipient benefits is limited; trade facilitation and post-conflict stabilization are rare exceptions. Finally, the paper advances four propositions: aid must be selective, avoid entrenching dependency, balance short-term results with long-term system building, and support reformers willing to challenge the status quo. Only by acknowledging its political nature and aligning incentives within a reconfigured global order can aid remain relevant to development.
Topic:
Globalization, International Trade and Finance, Markets, Political Economy, Foreign Aid, and Sustainable Development
Political Geography:
Africa, Europe, Asia, South America, and North America

16. Economic Insecurity: Trade Dependencies and Their Weaponization in History

Author:
Martin Bernstein, Josefin Meyer, Kevin H. O'Rourke, and Moritz Schularick
Publication Date:
07-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Do trade dependencies leave countries vulnerable to geopolitical coercion? We study the economic costs of trade and financial sanctions, from 1920 to the present. We first develop a continuous measure of sanction intensity, using bilateral commodity-level data to calculate the importance of specific flows that fall under sanctions. We find that sanctions inflict relatively small costs on average: sanctioning 1% of GDP worth of imports or exports leads to approximately 0.3 percentage points of lost GDP over a 5-year period and a 0.1 percentage point increase in unemployment. However, we show that sanctions are far more costly for countries whose trade is highly concentrated, and for countries that rely heavily on exporting primary commodities. Low income and developing countries appear most vulnerable to trade sanctions, while high income financial centers and some EU countries are among the most exposed to financial sanctions.
Topic:
Economics, International Trade and Finance, Political Economy, Sanctions, Trade, Vulnerability, Coercion, and Geoeconomics
Political Geography:
Global Focus

17. Is Davos More Than a Boondoggle?

Author:
Andreas Fuchs, Sebastian Leue, and Andrew K. Rose
Publication Date:
05-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Since 1971, the World Economic Forum (WEF) Annual Meeting in Davos has attracted the leadership of global corporations. Attendance may offer economic benefits through networking and political support or provide only private gains without measurable impact. Through creating a novel database of WEF attendees (2009-2018) matched with firm-level data, we analyze stock market performance, corporate ratings, and environmental, social, and corporate governance (ESG) scores. Regression results, including annual and daily event studies, suggest that WEF attendance does not systematically improve stock performance or credit ratings. However, WEF attendance positively impacts ESG scores, especially the social sub-score, indicating beneficial takeholder effects.
Topic:
Globalization, International Organization, International Trade and Finance, Political Economy, Financial Markets, Business, Stock Markets, and World Economic Forum
Political Geography:
Global Focus

18. Geoeconomics

Author:
Cathrin Mohr and Christoph Trebesch
Publication Date:
01-2025
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We review the literature on geoeconomics, defined as the field of study that links economics and geopolitics (power rivalry). We describe what geoeconomics is and which questions it addresses, focusing on five main subfields. First, the use of geoeconomic policy tools such as sanctions and embargoes. Second, the geopolitics of international trade, especially work on coercion and fragmentation. Third, research on the geopolitics of international finance, which focuses on currency dominance and state-directed capital flows. Fourth, the literature on geopolitical risk and its spillovers to the domestic economy, e.g. on investments, credit, and inflation. Fifth, the economics of war, in particular research on trade and war and on military production. As geopolitical tensions grow, we expect the field to grow substantially in the coming years.
Topic:
International Trade and Finance, Political Economy, Sanctions, Geopolitics, Coercion, and Geoeconomics
Political Geography:
Global Focus

19. Cutting through the green hype: the political economy of renewable energy in the United Arab Emirates and Oman

Author:
Máté Szalai and Matteo Colombo
Publication Date:
04-2025
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Despite grand projects, ambitious strategies and optimistic rhetoric, the Gulf Cooperation Council (GCC) member states are still far from reaching their proclaimed renewable energy transition goals. This policy brief cuts through the green hype by providing a substantive evaluation of the growth of the renewable energy industry in two GCC states: the United Arab Emirates and Oman. Applying a political economy perspective, the authors demonstrate that the development of the renewable sector by the Emirati and Omani governments aims to increase fossil fuel exports, attract foreign investment into the non-oil economy, and create a greener image all at the same time. As a result, the renewable energy transition in the Gulf is conducted in a way that reinforces existing political-economic hierarchies, reframes the GCC’s role as a global energy supplier and stays away from radical transformation. From the perspective of global efforts to slow down and mitigate negative effects resulting from climate change, the renewables strategy of both Gulf states signifies progress compared with their previous position of non-interest or even denial as it reduces their carbon pollution footprint, but it does not reflect a genuine commitment.
Topic:
Political Economy, European Union, Renewable Energy, Green Transition, and Green Economy
Political Geography:
Middle East, Oman, and United Arab Emirates

20. Viksit Bharat’s Engine: An Institutional Roadmap to a $ 30 Trillion Economy – The Macroeconomic Institutional Imperative

Author:
Ejaz Ghani
Publication Date:
11-2025
Content Type:
Working Paper
Institution:
Centre for Policy Research, India
Abstract:
This paper looks at the “Institutional Efficacy Puzzle” that lies at the heart of India’s development challenge and provides a deep, systemic diagnostic of these key institutions—the Ministry of Finance (MoF), the Reserve Bank of India (RBI), financial regulators (SEBI, IRDAI), tax authorities (CBDT, CBIC), and crucial oversight bodies like the Finance Commission and the National Statistical Commission (NSC). It moves beyond analysing symptoms to uncover root causes embedded in flawed designs, capacity deficits, or political economy constraints. It then proposes a comprehensive, actionable roadmap for profound reform aimed at building the Resilient, Agile, Accountable, and Inclusive (RAAI) institutional foundations essential for transforming the Viksit Bharat vision into a tangible reality.
Topic:
Development, Political Economy, Economy, Institutions, and Macroeconomics
Political Geography:
South Asia and India

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

32. 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

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

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

34. Does Trade Exposure Explain Antiglobalization Votes?

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

35. Class and Space in Indian Cities

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

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

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

37. A theory of discriminatory institutions, with applications to apartheid and to the political economy of migration

Author:
James P. Choy
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)
Abstract:
Institutions in some societies force employers to discriminate. I develop a theory of institutionalized discrimination. Optimal discrimination sorts workers from different social groups into complementary tasks. Workers in the politically dominant social group benefit from complementary labor supplied by oppressed group workers, but are harmed by competition from oppressed group workers for access to non-labor factors of production. The tradeoff between these two forces determines whether ethnic cleansing, institutionalized discrimination, or free labor markets are optimal for workers in the dominant group. I apply the model to apartheid South Africa and to the regulation of migrant labor in contemporary economies.
Topic:
Apartheid, Migration, Political Economy, Discrimination, and Institutions
Political Geography:
Africa and South Africa

38. The Political Economy of Conditionality and the New Industrial Policy

Author:
Fabio Bulfone, Timur Ergen, and Erez Maggor
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Conditionality was a central concern in the development literature of the 1990s. With the massive expansion of targeted public support to private firms since the Great Financial Crisis, the question of conditionality is once again at the center of industrial policy debates. Despite the growing interest in the concept, the existing literature does not provide a systematic conceptualization of conditionality in the context of industrial policy, nor does it outline the political factors that facilitate the introduction of conditionality by state actors. This paper addresses this gap by offering a systematic political economy of conditionality. We provide an overview of the literature on conditionality, focusing on different industries, historical periods, and national contexts. In doing so, we make three contributions to the debate on industrial policy. First, we distinguish between two broad instruments of conditionality: performance standards and corporate control devices. Next, we map the coalitional, institutional, ideational, and global contextual factors that facilitate conditionality. Finally, we offer two vignettes of recent industrial policy initiatives in the EU and the US as illustrative cases. We make two arguments. First, the presence of conditionality is not primarily a technical matter of political design, but is shaped by combinations of political economy factors. Second, industrial policy conditionality provides an important theoretical lens for assessing how and where the recent revival of state activism represents a substantive break from the neoliberal order.
Topic:
Development, Industrial Policy, Political Economy, European Union, Geopolitics, and Conditionality
Political Geography:
Europe and United States of America

39. Between Export-Led Growth and Administrative Keynesianism: Italy’s Two-Tiered Growth Regime

Author:
Donato Di Carlo, Andrea Ciarini, and Anna Villa
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Comparative political economy scholarship struggles to categorize Italy’s model of capitalism between a mixed-market economy and a hybrid, stagnant economic system. To enhance our understanding of the Italian political economy, this paper employs the analytical framework of growth regimes to study Italy’s regional economic systems. Our analysis indicates that Italy can hardly be defined as a “national growth regime” due to the presence of two diametrically opposed regional growth regimes: northern regions conform to a manufacturing-based, export-led growth regime supported by competitiveness-enhancing territorial institutions; southern regions conform to a particular variety of the consumption-led growth regime, that is, an administrative Keynesianism regime, which we theorize to typify a regime where growth and employment are systematically dependent on the state’s role as employer of last resort, the state’s consumption-enhancing social policies, and economic forbearance of labor and corporate tax regulations. The paper suggests that studying regional growth regimes is desirable when marked internal diversity in economic outcomes or productive structures exists across regions within (generally larger) countries, and when subnational governments have powers to develop their own major institutions/policies in support of regional growth regimes.
Topic:
Political Economy, Regional Economy, Growth Models, and Comparative Economic Systems
Political Geography:
Europe and Italy

40. On U.S.-China Relations & Political Economy

Author:
Lizzi C. Lee and Neil Thomas
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
Communist leaders may not like electoral democracy but there are few events they will pay more attention to this year than the U.S. presidential election on November 5. General Secretary Xi Jinping says U.S.-China ties are “the most important bilateral relationship in the world,” and Chinese officials, scholars, and netizens are anxious to glean insights about Republican Party candidate and former President Donald Trump and Democratic Party candidate and current Vice President Kamala Harris. For Beijing, the stakes are high. The presidencies of first Trump and now Joe Biden saw the United States adopt a posture of “strategic competition” toward China that has significantly impacted the ruling Chinese Communist Party’s external environment and domestic priorities. Trump imposed tariffs on most Chinese imports to the United States, which Biden ramped up in key industries including electric vehicles. Biden introduced extensive export controls aimed at curbing China’s chip industry, which could be expanded to other sectors. Trump and Biden have both elevated U.S. support for Taiwan; strengthened restrictions on inbound and outbound investment with China; and sanctioned hundreds of Chinese government agencies, state-owned enterprises, private firms, and individuals. Biden has further prioritized working with U.S. allies and partners on economic, political, and security policies to blunt China’s influence. Both countries seek “guardrails” against crisis and conflict, but bilateral diplomacy is increasingly fraught and multilateral cooperation on global challenges is increasingly difficult. This essay analyzes the China policies of both candidates, focusing on the diplomatic and economic dimensions of U.S.-China relations, highlighting how a second Trump administration could deliver acute shocks but potential openings while Harris would likely bring continuity with Biden’s approach. It argues that Beijing has no clear preference between the two candidates. Therefore, neither election outcome would fundamentally change China’s international strategy, although the result would produce different tactical responses. It concludes with recommendations for how both Washington and Beijing can safeguard global stability while preserving national sovereignty regardless of who succeeds Biden.
Topic:
Foreign Policy, Political Economy, Sovereignty, Bilateral Relations, Elections, and Donald Trump
Political Geography:
China, Asia, North America, and United States of America

41. Inflation Surprises and Election Outcomes

Author:
Jonathan Federle, Cathrin Mohr, and Moritz Schularick
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We study the political consequences of inflation surprises, focusing on votes for extremist and populist parties in 365 elections in 18 advanced economies since 1948. Inflation surprises are regularly followed by a substantial increase in vote shares of extremist, anti-system, and populist parties. An inflation surprise of 10 percentage points leads to a 15% increase in their vote share, comparable to the increase typically seen after financial crises. We show that the change in voting behavior is particularly pronounced when real wages decline, and less evident when real wages are not affected. Our paper points to considerable political after-effects of unexpected inflation.
Topic:
Political Economy, Monetary Policy, Elections, Radicalization, Business, Inflation, Voting, and Political Extremism
Political Geography:
Global Focus

42. 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

43. 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

44. 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

45. 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

46. 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

47. 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

48. 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

49. 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

50. 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