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331. Financial Market Integration and Income Inequality

Author:
Jae Wook Jung and Kyunghun Kim
Publication Date:
07-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Benefits of financial market integration include cheaper and alternative op-tions of saving and borrowing for households and entrepreneurs. In the global financial market, asset choices for households widen so that individu-als can manage their idiosyncratic income risk more effectively. On the other hand, financial market integration makes investors who hold foreign assets more vulnerable to global financial shocks. In the recent financial crisis, finan-cial market distress which initially arose in the U.S. had an enormous impact on the peripheral countries. This example shows that the strong shock prop-agation occurs via integrated financial markets. The existing literature shows that financial market integration has a sizable impact not only on business cycles in the short run, but also on economic growth in the long run. However, there has been little attention to income distribution, specifically in related to the financial market integration. In this paper, we fill the void in the literature by focusing on the following two styl-ized facts: income inequality has been exacerbated in most countries over the past two decades, and the financial market has been integrated across coun-tries during the same period. In particular, we answer three research questions to investigate the relationship between the two facts. First, how does financial market integration affect income inequality? Second, how do financial market integration and financial market development interact to change income ine-quality? Third, what components do theoretical model need to explain the interaction effect of financial market development and integration on income inequality? We test hypotheses that the effect of financial market openness on inequality is conditional on the level of domestic financial market development when the financial market opens. An empirical study with panel data comprised of 174 countries for the period 1995-2017 finds that the overall effect of finan-cial integration on income inequality is nonlinear. Financial market integration creates the intensive and extensive margins of credit supply which may de-pend on the development level of financial market disproportionally. This paper uncovers a novel empirical evidence that financial market integration and financial market development interact to change income inequality. When other things are controlled, the effect of financial market integration on in-come inequality depends on financial market development. In a country with underdeveloped financial market, income inequality gets worse as financial market opens. On the other hand, when financial market is highly developed, the effect of financial market openness on income inequality is mostly insig-nificant in a statistical sense. The results are still valid with different measures of financial market development, integration, and income inequality. We check that the results are robust as an endogeneity issue among financial market development and integration is controlled. We also suggest some important structures for the conventional economic model to account for our empirical finding as theoretical implications. Based on these implications, extensions of the conventional small open economy model with financial constraints having suggested components such as het-erogeneous holdings of foreign assets across income and asset levels and entrepreneurial shocks will be necessary to understand an interaction of fi-nancial market openness and domestic market development on the distribu-tion of income in a country. Our finding also echoes that studying an eco-nomic mechanism in which economic growth, financial market outcomes, and inequality are endogenously determined.
Topic:
Development, Income Inequality, Financial Markets, Economic Growth, and Integration
Political Geography:
Global Focus

332. Managing Fragility and Promoting Resilience to Advance Peace, Security, and Sustainable Development

Author:
James Michel
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
“Fragility”—the combination of poor governance, limited institutional capability, low social cohesion, and weak legitimacy—leads to erosion of the social contract and diminished resilience, with significant implications for peace, security, and sustainable development. This study reviews how the international community has responded to this challenge and offers new ideas on how that response can be improved. Based on that examination, the author seeks to convey the importance of addressing this phenomenon as a high priority for the international community. Chapters explore the nature of these obstacles to sustainable development, peace, and security; how the international community has defined, measured, and responded to the phenomenon of fragility; how the international response might be made more effective; and implications for the United States.
Topic:
Development, Governance, Fragile States, and Social Cohesion
Political Geography:
United States and Global Focus

333. Tracking the Development Dividend of SSR

Author:
Elisabetta Baldassini, Robin Dyk, Mark Krupanski, Gustav Meibauer, Albrecht Schnabel, Usha Trepp, and Raphael Zumsteg
Publication Date:
02-2018
Content Type:
Special Report
Institution:
Geneva Centre for Security Sector Governance (DCAF)
Abstract:
This report aims at investigating and substantiating the assumed relationship between security sector reform (SSR) activities and their impact on development prospects in order to reconcile the apparent impasse between development and SSR practitioners. Understanding the linkages between SSR and development allows researchers to generalise and produce comparable data necessary to assess and improve the suitability of SSR in helping societies achieve their development and peacebuilding objectives.
Topic:
Security, Development, Peacekeeping, and Reform
Political Geography:
Geneva, United Nations, and Global Focus

334. Global value chains and technology transfer: new evidence from developing countries

Author:
Davide Rigo
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
This paper uses the World Bank's Enterprise Surveys as a sample of 18 developing and emerging economies to investigate the causal relationship between global value chains and the transfer of technology to manufacturing firms in developing nations. It focuses on one specific channel for technology transfer, namely the licensing of foreign technology. By using a propensity score matching difference-in-differences technique, I show that there is a positive and causal impact of being involved in complex international activities (i.e. being a two-way trader) on the licensing of technology. Importantly, domestic firms becoming two-way traders are more likely to acquire foreign-licensed technology than domestic firms starting to either export or import. These findings suggest that the complexity associated with the trading activity determines whether or not foreign technology is licensed.
Topic:
Development, Economics, International Trade and Finance, Science and Technology, World Bank, and Global Political Economy
Political Geography:
Global Focus

335. The perils of development aid in resource-rich countries

Author:
Chiara Ravetti
Publication Date:
03-2018
Content Type:
Research Paper
Institution:
Centre for International Environmental Studies, The Graduate Institute (IHEID)
Abstract:
The emergence of China and other new donors offering foreign assistance to mineraland land-rich African countries has spurred a renewed interest in the relationship between international aid and natural resources (Dreher and Fuchs, 2015; Dreher et al., 2018). Many low-income countries with valuable natural resources have historically received large amounts of aid from OECD donors (Fig. 1). Poor countries endowed with abundant fossil fuels or mineral reserves can have difficulties in converting their resource wealth into other forms of physical or human capital, because these subsoil assets take time to be managed, extracted and traded. Foreign aid can thus provide a complementary source of immediate liquidity for development. On the other hand, the provision of external finances has the potential to hinder political accountability, and ultimately economic development especially in countries with weak institutions.h countries
Topic:
Development, Humanitarian Aid, Foreign Aid, and Development Aid
Political Geography:
Global Focus

336. The 5th Africa Think Tank Summit

Publication Date:
04-2018
Content Type:
Special Report
Institution:
The African Capacity Building Foundation (ACBF)
Abstract:
The 5th Africa Think Tank Summit opened in Accra, Ghana, on 5 April with a call on African leaders to provide “a visionary and transformative leadership” if African countries want to successfully tackle the youth unemployment issues on the continent.
Topic:
Development, Economics, Labor Issues, Youth, Capacity, and Unemployment
Political Geography:
Africa and Global Focus

337. Lessons Notes on Capacity Development in Africa

Publication Date:
01-2018
Content Type:
Special Report
Institution:
The African Capacity Building Foundation (ACBF)
Abstract:
ACBF with close to three decades of capacity building on the continent, it is high time to reflect on and share in a single document the lessons learnt in these efforts. This volume, therefore, tackles important questions including: what works, what doesn’t work in capacity development interventions and why? What are the implementation bottlenecks facing countries? What critical factors need to be reconsidered and what initiatives should be undertaken to effectively and sustainably support the capacity development efforts on the continent? What results have these capacity building efforts produced for African citizens? Are there adaptable generic capacity building tools that have emerged from over a quarter century of ACBF engagement with African institutions and societies?
Topic:
Development, Global Political Economy, Capacity, and Economic Development
Political Geography:
Africa and Global Focus

338. CONFLICT RESEARCHERS SHOULD CARE ABOUT THE POLITICAL ECONOMY OF DATA PRODUCTION

Author:
Andrew Kerner and Charles Crabtree
Publication Date:
03-2018
Content Type:
Commentary and Analysis
Institution:
Political Violence @ A Glance
Abstract:
Conflict scholars, policy professionals, and non-profit organizations routinely link the outbreak of violence to economics and, particularly, to economic growth. Some scholars have linked growth conditions to the outbreak of violence while others have linked violence to subsequent growth trajectories. The relationship between violence and economics—and the related debate about whether violence is better considered a consequence of “politics” or “economics”—is central to the study of violence, and therefore central to the type of recommendations researchers provide to policymakers and the INGO community. The important questions in this area of inquiry are often empirical, and resolving them requires accurate and unbiased data. We are used to scrutinizing our measures of violence, but typically take for granted that economic data are apolitically generated. We know that these data must be measured with some degree of error but we typically assume that those errors are random, or, at least, unrelated to the conflict-related processes we use them to understand. That’s a lot to take on faith. If these data are not apolitically generated, any observed relationship between the economy and violence might in fact capture a relationship between the politics of violence and the politics of economic measurement.
Topic:
Development, Economics, Political Economy, World Bank, Conflict, and Data Production
Political Geography:
Global Focus

339. On the Historiography of the Rise and Demise of the Third Worldism

Author:
Özgür Balkılıç
Publication Date:
10-2018
Content Type:
Journal Article
Journal:
Journal of Academic Inquiries
Institution:
Sakarya University (SAU)
Abstract:
After 1945, Western countries witnessed the awakening of the Third World. People of underdeveloped countries, who had been subjected to domination by developed Western countries, showed an interest towards a project of the Third World; the underlying motto of which was shaped by disarmament, peace, and social and economic justice. This project aimed to embody a radical break from the economic, political, social, and cultural paths which were devised in the West and then imposed on the rest of the world. This paper will analyze the historiography of this project. In this context, this paper will approach such literature from the lenses of social movements that emerged in the Third World, of nation states and of international relations. Through social movements, it will firstly focus on the people’s struggles in the different regions of the so-called Third World. Secondly, the paper will analyze academic works whose main subject is the anti-imperialist struggles of different nationalist governments. And lastly, it will criticize scholarly works on the Non-Alignment Movement, which pursued an anti-imperialist and anti-colonialist political agenda at the international level.
Topic:
Development, Politics, Third World, and Historiography
Political Geography:
Global Focus

340. Unmanned Aerial Vehicles in the protection of the elements of a country’s critical infrastructure – selected directions of development

Author:
Radosław Bielawski, Witold Rządkowski, and Rafał Perz
Publication Date:
12-2018
Content Type:
Journal Article
Journal:
Security and Defence Quarterly
Institution:
War Studies University
Abstract:
This paper explores the directions for the application of unmanned aerial vehicles in the provision of security to vital elements of a country’s critical infrastructure. The analysis focuses on two paths of development: the first one refers to the transportation system, the latter is related to the gas supply network – the basic components of a country’s critical infrastructure. The first section of this paper will examine the current state of knowledge in the field, and is designed as a reference of terminology pertaining to unmanned aerial vehicles (definitions and classification). The section shall furthermore provide a basis for and a contribution to the developed conceptual-semantic framework for UAV research. The first direction of development is described in terms of the characteristics and assumptions of the system; this includes an overview of the specific requirements of the unmanned platform itself, as well as the elements of the system, such as a local monitoring centre and other components. Furthermore, this section provides the overview of the designated mobile application, whose development is expected to improve the efficiency of system operation, which is a conceptual novelty considering similar developments. The second direction concerns the development of an unmanned system of production, storage, and use of chemical and radioactive substances, including pipelines for hazardous substances. The programme that fits perfectly in the framework of the second considered branch of development is “Cricket” [Polish: “Świerszcz”] – a programme implemented in the periodic inspection of gas supply infrastructure. The description of the programme in question included specifying the technical and operational requirements for the fight devices as well as for the equipment.
Topic:
Security, Development, Infrastructure, Military, and Unmanned Aerial Vehicle (UAV)
Political Geography:
Global Focus