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71. Addressing Excessive Risk Taking in the Financial Sector: A Corporate Governance Approach

Author:
Steven L. Schwarcz and Maziar Peihani
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Excessive corporate risk taking by systemically important financial institutions (SIFIs) is widely seen as one of the primary causes of the global financial crisis. In response, an array of international reforms, under the auspices of the Group of Twenty’s (G20’s) standard-setting bodies, has been adopted to try to curb that risk taking. However, these reforms only impose substantive requirements, such as capital adequacy, and cannot by themselves prevent future systemic collapses. To complete the G20 financial reform agenda, SIFI managers should have a duty to society (a public governance duty) not to engage their firms in excessive risk taking that leads to systemic externalities. Regulating governance in this way can help supplement the ongoing regulatory reforms and reduce the likelihood of systemic harm to the public.
Topic:
Financial Crisis, Reform, Regulation, Risk, and Financial Institutions
Political Geography:
Global Focus

72. Climate Change Disclosure of the Financial Sector

Author:
Zachary Folger-Laronde and Olaf Weber
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As the impacts of climate change continue to grow in severity, focus has turned toward the climate change implications associated with the products and services of the financial sector. It is estimated that the indirect carbon emissions, which are caused in the financial sector by borrowers, investees and financed projects, are 50 to 200 times larger than the direct impacts of the financial sector. It is evident that a decarbonization strategy is needed for more than the fossil fuel industry and will require significant changes to most economic sectors. This added focus toward the financial sector has led to demands for enhanced disclosure of climate change information with regard to financed clients and projects. However, there remains limited guidance in how the financial sector should disclose its carbon performance to its shareholders and stakeholders. This paper reviews the highlights from an empirical study that investigated the types of carbon performance voluntarily disclosed by banks and the type of carbon impact emissions disclosed. Policy recommendations are made that aim to facilitate and standardize disclosures.
Topic:
Climate Change, Finance, Fossil Fuels, and Carbon Emissions
Political Geography:
Global Focus

73. Reconciliation beyond the Box: The UN Declaration and Plurinational Federalism in Canada

Author:
Sarah Morales and Joshua Nicholas
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Prime Minister Justin Trudeau has publicly shared a vision of a plurinational state brought about through truth and reconciliation. He has expressed hope that Canadians are ready to rectify past wrongs and undo the legacy of colonialism by using the United Nations Declaration on the Rights of Indigenous Peoples (UN Declaration) as “a way forward” to achieve self-determination, dignity and respect for Indigenous peoples. Many have questioned the government’s commitment to reconciliation built upon nation-to-nation and government-to-government relationships. Governmental support of major development projects such as the Trans Mountain Pipeline Expansion, against strong opposition from some Indigenous voices, has created skepticism. Many Indigenous leaders have expressed concerns about how changes to a number of laws currently making their way through Parliament will impact Indigenous people, and whether their concerns are being fully heard by government. With respect to the government’s rights recognition and implementation framework, some Indigenous communities argue that the focus should be on the affirmation rather than the mere recognition of rights that are already enshrined in the UN Declaration. This paper looks at the history of Indigenous treaty making in Canada, the history of the courts’ statements regarding Crown sovereignty, underlying title and legislative power, and how the UN Declaration might lead Canada and Indigenous peoples toward genuine nation-to-nation relationships.
Topic:
Energy Policy, United Nations, Colonialism, and Indigenous
Political Geography:
Canada and North America

74. Rethinking Industrial Policy for the Data-driven Economy

Author:
Dan Ciuriak
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
This paper reviews industrial policy in theory and historical practice. It makes the case for a fundamental reframing based on the centrality of data to the data-driven digital economy, the various roles that data plays in this economy (as a medium of digital transactions, as intangible capital and as infrastructure of a digitized economy), and the heightened scope for market failure in the data-driven economy. A number of points to guide the formation of industrial and innovation policy in the knowledge-based and data-driven digital economy are suggested. As part of their data strategies, countries should assess the market value of data generated in the exercise of public sector governance and data generated in Canadian public space; put in place procedures to capture data and regulate its capture; and use procurement to develop new capabilities in the private sector.
Topic:
Industrial Policy, Infrastructure, Governance, and Digital Economy
Political Geography:
Canada and North America

75. The Rise of Mega-Regionalism: Revealing Canada’s Blind Spots

Author:
Jeremy de Beer
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The era of global multilateralism in international trade is coming to an end. The World Trade Organization’s (WTO’s) Doha Round, which sought to reduce multilateral trade barriers, has been declared “dead and buried” according to certain scholars. New WTO reform efforts may be rekindled; however, the world has shifted toward international economic regionalism. The WTO defines regional trade agreements as reciprocal preferential trade agreements between two or more partners (whether or not from the same region), of which almost 300 are in force. While these agreements can be called bilateral, free, regional or preferential trade agreements, there is a more important issue than naming.
Topic:
International Trade and Finance, Regional Cooperation, World Trade Organization, and Multilateralism
Political Geography:
United States, Canada, and North America

76. Flood Risk Mapping in Canada: Moving Forward on a National Priority

Author:
Daniel Henstra and Jason Thistlethwaite
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
To improve public awareness of flood risk and meet its commitment to the United Nations Sendai Framework on Disaster Risk Reduction, Canada must develop up-to-date flood risk maps and make them publicly available. Effective flood maps improve risk perception, ensure information is accessible and stimulate risk reduction. Good flood maps provide: information to personalize the experience of flooding; local and historical context; a legend; legible flood extents; definitions of scientific and technical terminology; transparency on uncertainty and limitations; data on all forms of flooding; and risk reduction advice. Until a more coordinated map development process can occur, the Government of Canada should create a national online repository where existing maps are collected and made publicly accessible.
Topic:
Science and Technology, United Nations, Natural Disasters, Maritime, Flood, and Maping
Political Geography:
Canada and North America

77. Crisis in the WTO: Restoring the Dispute Settlement Function

Author:
Robert McDougall
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The impasse in the World Trade Organization (WTO) over the appointment of new members of the Appellate Body is just one symptom of crisis in cooperation on trade. Driven by skepticism about multilateralism and binding dispute settlement, and by a growing strategic and economic rivalry with China, the current US administration has elevated longstanding US concerns about WTO dispute settlement to new heights. The inability of WTO members to exercise their collective authority to interpret the meaning of their WTO commitments has meant that the Appellate Body is effectively not subject to any checks and balances. As other WTO members blocked US efforts to negotiate more member control, the United States increasingly turned to unpopular unilateral mechanisms, culminating in the current block on new appointments as part of its more disruptive trade policy. Assuming the United States will eventually return to rules-based trade, restoring the WTO dispute settlement system to full capacity and enhancing its legitimacy will likely require some changes. This might include improving mechanisms for political oversight, diverting sensitive issues from adjudication, narrowing the scope of adjudication, improving institutional support and providing members more say over certain procedures. Preserving compulsory, impartial and enforceable dispute settlement in the WTO will require an accommodation of different perspectives on how the system should function. Achieving this, in whatever form, will contribute to maintaining and even strengthening multilateral cooperation on trade.
Topic:
International Trade and Finance, World Trade Organization, Global Political Economy, and Multilateralism
Political Geography:
United States, China, Asia, and North America

78. No Strangers at the Gate: Collective Responsibility and a Region’s Response to the Venezuelan Refugee and Migration Crisis

Author:
Michael J. Camilleri and Fen Olser Hampson
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Venezuela suffers from a profound and multifaceted crisis. Years of mismanagement have led to a crippling economic contraction and an inflation rate projected to reach 1,000,000 percent in 2018. Citizens are chronically short of food and medicine and face some of the world’s highest levels of violence. The governing regime has systematically dismantled democratic checks and balances, consolidating power through fraudulent elections, violent re­pression and the cynical use of scarcity as a tool of control. Unsurprisingly, Venezuelans are fleeing, generating the largest refugee and migration flow in the history of the Western Hemisphere — more than 1.6 million people since 2015. Most have sought refuge within Latin America, but Venezuelans are now also the leading requesters of asylum in the United States and Spain. With no end in sight for the economic, humanitarian and governance crisis in Venezuela, the forced migration challenge will only grow. The regional response to Venezuelan refugees and migrants has been marked by a spirit of solidarity. Latin American countries — particularly neighbouring Colombia, where authorities report receiving 5,000 Venezuelans per day — have taken important steps to ensure freedom of movement and to provide avenues for legal stay and access to basic rights for those fleeing Venezuela. Nonetheless, many significant challeng­es to effective response remain. Meeting them requires reinforcing the existing re­gional solidarity toward Venezuelan refugees and migrants and combining it with greater creativity, collective responsibility and political will from the international community. This report aims to galvanize such an effort and offers concrete proposals for action.
Topic:
Migration, Regional Cooperation, Refugee Crisis, and Humanitarian Crisis
Political Geography:
South America and Venezuela

79. Data Is Different: Why the World Needs a New Approach to Governing Cross-border Data Flows

Author:
Susan Ariel Aaronson
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Companies, governments and individuals are using data to create new services such as apps, artificial intelligence and the Internet of Things. These data-driven services rely on large pools of data and a relatively unhindered flow of data across borders (few market access or governance barriers). The current approach to governing cross-border data flows through trade agreements has not led to binding, universal or interoperable rules governing the use of data. Most countries with significant data-driven firms are in the process of debating how to regulate these services and the data that underpins them. But many developing countries are not able to participate in that debate. Policy makers must devise a more effective approach to regulating trade in data for four reasons: the unique nature of data as an item exchanged across borders; the sheer volume of data exchanged; the fact that much of the data exchanged across borders is personal data; and the fact that although data could be a significant source of growth, many developing countries are unprepared to participate in this new data-driven economy and to build new data-driven services. This paper begins with an overview and then describes how trade in data is different from trade in goods or services. It then examines analogies used to describe data as an input, which can help us understand how data could be regulated. Next, the paper discusses how trade policy makers are regulating trade in data and how these efforts have created a patchwork. Finally, it suggests an alternative approach.
Topic:
Digital Economy, Internet, and International Community
Political Geography:
Global Focus

80. Euro-area Governance Reform: The Unfinished Agenda

Author:
Miranda Xafa
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Since the debt crisis of 2010-2012, sustained efforts toward deeper integration, supported by accommodative monetary policy, helped promote the recovery of the euro-area economy and dispelled fears of a breakup of the single currency. Fiscal rules were tightened and macro surveillance tools were set up for crisis prevention. Yet significant challenges remain to be tackled. Gaps remain in the euro-area architecture; limited progress has been made in establishing the Capital Markets Union and the banking union remains incomplete. Today’s environment of solid growth remains an ideal time to advance the reform agenda. There is wide agreement that building a well-functioning and resilient monetary union in Europe requires further steps to break the bank-sovereign doom loop and to increase risk sharing among members of the union. Many competing proposals have been tabled to make the governance of the euro area more robust. Views differ on the shape and sequencing of reforms, and on the degree of integration that is ultimately desirable, with some observers arguing for a full fiscal union with shared risk, and others going all the way to full political union through the creation of a federal state. This paper assesses and prioritizes key proposals that are economically sound and politically feasible.
Topic:
Debt, Regional Cooperation, Financial Crisis, and European Union
Political Geography:
Europe