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411. Does Trade Reform Promote Economic Growth? A Review of Recent Evidence

Author:
Douglas A. Irwin
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Do trade reforms that significantly reduce import barriers lead to faster economic growth? In the two decades since the critical survey of empirical work on this question by Francesco Rodriguez and Dani Rodrik in 2000, new research has tried to overcome the various methodological problems that have plagued previous attempts to provide a convincing answer. This paper examines three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms that significantly reduce import barriers have a positive impact on economic growth, on average, although the effect differs across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.
Topic:
Economics, Reform, Economic growth, and Trade
Political Geography:
Global Focus

412. Survival of the International Monetary Fund and Global Economic Cooperation

Author:
Edwin M. Truman
Publication Date:
04-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The International Monetary Fund (IMF)—a quota-based institution—faces a test of its survival as the linchpin of the global financial safety net. Its roughly $1.4 trillion in total financial resources is scheduled to begin to shrink in 2020. In 2015, IMF members committed to strengthening IMF financial resources in the 15th General Review of Quotas, which will end in December 2019. Over the past 25 years, the United States has led the way for a gradual redistribution of IMF quota shares toward faster-growing emerging-market and developing countries. Any significant redistribution of quota shares requires an increase in total quotas. Because of its share of votes in the IMF, the United States must agree to any change in quotas. The Trump administration, however, has signaled that it favors no such change. If the United States does not reverse its stance, IMF members will lose an opportunity to strengthen the institution at a time of global financial uncertainty. Truman says the United States could still change its position and recommends how other member countries should press it to do so.
Topic:
International Trade and Finance, Politics, International Monetary Fund, Global Political Economy, Donald Trump, and Economic Cooperation
Political Geography:
North America, Global Focus, and United States of America

413. Opening Internet Monopolies to Competition with Data Sharing Mandates

Author:
Claudia Biancotti and Paolo Ciocca
Publication Date:
04-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Over the past few years, it has become apparent that a small number of technology companies have assembled detailed datasets on the characteristics, preferences, and behavior of billions of individuals. This concentration of data is at the root of a worrying power imbalance between dominant internet firms and the rest of society, reflecting negatively on collective security, consumer rights, and competition. Introducing data sharing mandates, or requirements for market leaders to share user data with other firms and academia, would have a positive effect on competition. As data are a key input for artificial intelligence (AI), more widely available information would help spread the benefits of AI through the economy. On the other hand, data sharing could worsen existing risks to consumer privacy and collective security. Policymakers intending to implement a data sharing mandate should carefully evaluate this tradeoff.
Topic:
Security, Government, Science and Technology, Privacy, Internet, Monopoly, and Artificial Intelligence
Political Geography:
Global Focus

414. What Drives Religious Politicking?

Author:
Amy Erica Smith and Emma Rosenberg
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
In the last decade, scholars have begun to elaborate the diverse ways religion manifests in democracies. We draw on theories related to modernization, secularism, and religious competition, as well as survey data from the Comparative National Elections Project, to explain individual-level and country-level variation in religious politicking—religious leaders’ and organizations’ engagement in electoral campaigns. At the country level, though human development depresses the rate at which citizens receive political messages from religious organizations and clergy, both secularism and religious pluralism boost it. At the individual level, “civilizational” differences across religious groups are muted and inconsistent. However, across the globe, citizens with higher levels of education are consistently more likely to receive political messages—an effect that is stronger where religious politicking is more common. A case study of Mozambique further confirms the insights obtained when we unpack modernization and secularization theories.
Topic:
Civil Society, Democratization, Politics, Religion, Developing World, Democracy, Citizenship, and Human Development
Political Geography:
Africa, Mozambique, Global Focus, and Global South

415. Tyrannies of Majorities: A Conceptual Reassessment

Author:
Andreas Schedler
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
Since the invention of modern democracy, political theorists as well as practitioners have alerted us against the dangers of “majoritarian tyrannies,” whose substantive meaning, however, remains unclear and controversial. Many have also alerted us against the dangers of such alerts serving as rhetorical cover for antidemocratic elites. In this twin exercise of conceptual explication and reappraisal, I intend to both clarify the meaning and reevaluate the political role of the idea of majoritarian tyrannies. In the main part of the paper, I elucidate their internal structure and variance by discussing three logical presuppositions: (1) the performance of tyrannical acts, (2) the exclusive targeting of minorities, and (3) collective action by the majority. In the final part, I propose to revalue the concept as an instrument of horizontal accountability among citizens. Antipopulist rather than antidemocratic in nature, it allows the losers of majoritarian decisions to call their fellow citizens to account for the injustices they engender.
Topic:
Human Rights, Culture, Democracy, Citizenship, and Rule of Law
Political Geography:
Global Focus

416. International Coordination of Economic Policies in the Global Financial Crisis: Successes, Failures, and Consequences

Author:
Edwin M. Truman
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper evaluates international efforts to diagnose the global financial crisis and decide on appropriate responses, the treatments that were agreed and adopted, and the successes and failures as the crisis unfolded. International coordination of economic policies eventually contributed importantly to containing the crisis, but the authorities failed to agree on a diagnosis and the consequent need for joint action until the case was obvious. The policy actions that were adopted were powerful and effective, but they may have undermined prospects for coordinated responses to future crises.
Topic:
International Affairs, Financial Crisis, Economic Policy, and Fiscal Policy
Political Geography:
Global Focus

417. Aggregate Effects of Budget Stimulus: Evidence from the Large Fiscal Expansions Database

Author:
Jeremie Cohen-Setton, Egor Gornostay, and Colombe Ladreit de Lacharrière
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper estimates the effects of fiscal stimulus on economic activity using a novel database on large fiscal expansions for 17 OECD countries for the period 1960–2006. The database is constructed by combining the statistical approach to identifying large shifts in fiscal policy with narrative evidence from contemporaneous policy documents. When correctly identified, large fiscal stimulus packages are found to have strong and persistent expansionary effects on economic activity, with a multiplier of 1 or above. The effects of stimulus are largest in slumps and smallest in booms.
Topic:
Budget, Fiscal Policy, and Stimulus
Political Geography:
Global Focus

418. Keeping Up with the Future: Upgrading Forecasts of Political Instability and Geopolitical Risk

Author:
Cullen S. Hendrix and Sooyeon Kang
Publication Date:
07-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The nature and magnitude of geopolitical risk is changing more rapidly than the ability to anticipate it, with increasingly severe economic consequences. This Policy Brief discusses the economic costs and risks associated with episodes of political instability, arguing that firms, government agencies, and international institutions must update their forecasting and risk assessment efforts to take global factors into account. Since the global financial crisis, political instability has shifted from emerging-market countries in the developing world to larger, more globally impactful econo¬mies. Acknowledging this changing risk profile—and developing better tools to predict major episodes of instability—will allow both policymakers and firms to plan with greater confidence.
Topic:
Economics, Financial Crisis, Geopolitics, Political stability, and Risk
Political Geography:
Global Focus

419. Does Trade Reform Promote Economic Growth? A Review of Recent Evidence

Author:
Douglas A. Irwin
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Do trade reforms that significantly reduce import barriers lead to faster economic growth? In the two decades since the critical survey of empirical work on this question by Francesco Rodriguez and Dani Rodrik in 2000, new research has tried to overcome the various methodological problems that have plagued previous attempts to provide a convincing answer. This paper examines three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms that significantly reduce import barriers have a positive impact on economic growth, on average, although the effect differs across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.
Topic:
Reform, Economic growth, and Trade
Political Geography:
Global Focus

420. Public and Private Pension Systems and Macroeconomic Volatility in OECD Countries

Author:
Mario Holzner, Stefan Jestl, and David Pichler
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper analyses the impact of public pension expenditures and pension funds’ assets as well as their benefits on economic volatility. To do so, we use panel data for 35 OECD countries for the period 1980-2018 and apply a set of state-of-the-art econometric estimators. Our results show weak evidence of a negative impact of public pension expenditures as well as weak evidence of a positive impact of pension funds’ benefits on volatility. Results were, however, found not to be very robust. In contrast, pension funds’ assets do not show any evidence of being associated with economic volatility. Unsystematic fiscal policy, banking crises and political (in)stability, however, are revealed to be somewhat more robust determinants of economic volatility.
Topic:
Economics, Public Sector, Econometrics, and Organisation for Economic Co-operation and Development
Political Geography:
Global Focus