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51. Democratization, Poverty Reduction and Risk Mitigation in Fragile and Post-Conflict States

Author:
Jamal Saghir and Ede Jorge Ijjasz-Vasquez
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Institute for the Study of International Development, McGill University (ISID)
Abstract:
The COVID-19 pandemic has caused the most severe recession in recent decades, with a cumulative loss to global GDP of around $9 trillion. Climate disasters continue to affect the most vulnerable populations and countries, affecting more than 50 million people in 2020. Investments in climate adaptation and resilience have been insufficient in recent years. Global investments only reached $30 billion in 2017-2018, against estimated needs in developing countries between $140 and $300 billion per year by 2030. As governments worldwide design and begin implementing post-pandemic economic recovery programs, investments in adaptation and resilience provide a unique opportunity to generate jobs, restart economic growth, and tackle the inequities made more acute by the pandemic. We discuss practical policy and program options to achieve these multiple objectives.
Topic:
Climate Change, Science and Technology, Infrastructure, Investment, Resilience, COVID-19, and Economic Recovery
Political Geography:
Global Focus

52. Grey Zones in Global Finance: the Distorted Geography of Cross-Border Investments

Author:
Vincent Vicard, Amélie Guillin, and Anne-Laure Delatte
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Tax avoidance schemes generate artificially complex cross-border financial structures inflating measured international investment stocks in tax havens. Using a standard gravity framework, we estimate that about 40% of global assets (FDI, portfolio equity and debt) are `abnormal' – unexplained – stocks. Abnormal stocks are increasing over time and concentrated in a limited number of jurisdictions. Six jurisdictions including three European countries are the largest contributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands. Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away.
Topic:
Economics, International Political Economy, International Trade and Finance, Finance, Borders, Investment, and Stock Markets
Political Geography:
Global Focus

53. Cross-border Investments and Uncertainty Firm-level Evidence

Author:
Rafael Cezar, Timothée Gigout, and Fabien Tripier
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper studies the impact of uncertainty on cross-border investments. We build a data-set of firm-level outward Foreign Direct Investments between 2000 and 2015. We create a time and country varying measure of uncertainty based on the dispersion of idiosyncratic investment returns. An increase in uncertainty delays cross-border flows to the affected country. Yet, this average effect hides strong heterogeneity. Firms with low ex-ante performance durably reduce their foreign investments. Meanwhile high-performing firms increase their investments after the initial shock. We interpret these results as the evidence of a cleansing effect of uncertainty shocks among multinational firms in the presence of financial frictions.
Topic:
Economics, International Political Economy, Foreign Direct Investment, Borders, and Investment
Political Geography:
Global Focus

54. Financial Innovation for Energy Innovation

Author:
Ashby Monk and Soh Young In
Publication Date:
03-2020
Content Type:
Journal Article
Journal:
Brown Journal of World Affairs
Institution:
Brown Journal of World Affairs
Abstract:
The move toward a global energy transition is underpinned by the collec- tive need to limit the most severe impacts of climate change as well as to foster more sustainable economic growth. Floating photovoltaic power stations on Chinese lakes, integrated carbon capture technology on large-scale power plants in Canada, and decentralized urban wind turbines on Singaporean rooftops are just a few examples of how radical innovations in clean energy technology are fueling the global energy transition.1 Bringing cutting-edge technology from the lab to the global energy market requires a supportive ecosystem. Innovation must be matched by market readiness to adopt disruptive technologies, local capacities to scale up new energy projects, energy policies with climate objectives, technological development, and sufficient and “aligned” investment capital. This article focuses specifically on the last requirement: the characteristics of investment capital needed to support clean energy innovation. Investors are key players in the future of energy, as they must drive innovation in the financial system to meet the scale of capital needed to transform the energy industry. Both a lack and misalignment of investment capital have hindered important technological leaps in sustainable energy.2 One such example is the severe financing shortage in commercializing novel clean energy technology. The most prominent financing issue associated with commercializing novel clean technology (cleantech) has been termed the “valley of death,” which refers to the pattern in which most early-stage cleantech is severely underfunded, resulting in innovation being abandoned before reaching full-sized deployment. There are many causes of this “valley of death,” but the common threads among them are the sheer number of financial risks in the energy industry and the inability to fully understand and manage these risks within the energy ecosystem.3
Topic:
Finance, Investment, Innovation, Energy, and Energy Transition
Political Geography:
Global Focus

55. Refugee Sponsorship Programs: A Global State of Play and Opportunities for Investment

Author:
Susan Fratzke, Lena Kainz, Hanne Beirens, Emma Dorst, and Jessica Bolter
Publication Date:
12-2019
Content Type:
Policy Brief
Institution:
Migration Policy Institute (MPI)
Abstract:
A pair of contradictory trends is challenging humanitarian protection systems around the world: the number of refugees in need of protection has climbed to an all-time high, while at the same time, many countries have reduced their commitments to refugee resettlement. With protection needs high and generosity low, it has become more important to find new ways for refugees to reach safety and to rebuild public consensus around the value of offering protection to those in need. To meet these challenges, governments and civil-society groups in a growing number of countries have begun to explore refugee sponsorship (also called community or private sponsorship), either as a complement or alternative to traditional protection pathways. This MPI Europe policy brief takes stock of sponsorship programs worldwide—from the well-established Canadian private sponsorship program, to much newer and smaller-scale initiatives in countries such as Argentina, Germany, New Zealand, and the United Kingdom. Although government investment and support for such programs are essential, this study also lays out a variety of ways private philanthropic actors can support these programs. Among them: funding the development of informational materials and hotlines for sponsors; investing in program infrastrucrture, such as staff positions within civil-society organizations; and monitoring and evaluation by civil society and/or government. Crucially, the authors note that while much effort in recent years has gone into developing and launching new initiatives, existing programs also face important capacity and funding gaps. “To ensure the capacity of refugee protection systems at a global level,” they write, “strengthening these programs should be viewed as a priority equal in importance to setting up new schemes.”
Topic:
Immigration, Law, Refugees, Investment, and Asylum
Political Geography:
Global Focus

56. Investment Facilitation Revisited

Author:
Daniel F. Runde, Jake Cusack, and Matt Tilleard
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
This report reflects research CSIS conducted on CrossBoundary and others, focusing on what has been learned through practical application of the Investment Facilitation model in the years since the 2013 report. It updates the critical barriers to investment and illustrates how Investment Facilitation continues to remain relevant. It also reflects on the implications of lessons learned in the field and makes suggestions for improvements to further optimize the impact of Investment Facilitation going forward.
Topic:
Infrastructure, Economic Growth, and Investment
Political Geography:
Global Focus

57. Business & Peace 2019

Publication Date:
09-2019
Content Type:
Special Report
Institution:
Institute for Economics & Peace (IEP)
Abstract:
This report analyses the relationship between the economic performance of a country and its levels of peace. The major finding of this report is that peace acts as a good predictor of a country’s future performance in a number of macroeconomic indicators. These insights can be used to better assess the expected investment potential of countries. Rather than asking what businesses can do for peace, the study differentiates itself from other work by focusing on what peace can offer businesses. Institute for Economics & Peace (IEP) sees this as an important but missing step in business analysis. In order for businesses to be an actor in building peace, investors first need to see the benefits of peace to their investment decisions. The results of this work show that economic performance can be predicted by understanding the movement in the same socio-economic factors that affect peacefulness. These conditions are known as Positive Peace. The countries that improved the most in Positive Peace between 2010 and 2016 also had substantially above average economic performance.
Topic:
Economics, Peace Studies, Business, Economic Growth, Investment, Peace, and Profit
Political Geography:
Global Focus

58. Human Rights Law and the Investment Treaty Regime

Author:
Jesse Coleman, Kaitlin Y. Cordes, and Lise Johnson
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
In its current form, the international investment treaty regime may stymie the business and human rights agenda in various ways. The regime may incentivize governments to favour the protection of investors over the protection of human rights. Investment treaty standards enforced through investor-state arbitration risk adversely affecting access to justice for project-affected rights holders. More broadly, the regime contributes to a system of global economic governance that elevates and rewards investors’ actions and expectations, irrespective of whether they have adhered to their responsibilities to respect human rights. Without comprehensive reform, investment treaties and investor-state arbitration will continue to interfere with realization of human rights and broader public interest objectives. This Chapter provides an overview of the interaction between human rights law and the investment treaty regime. It highlights the challenges that arise from tension between international human rights and investment norms, including the impact of the investment regime on the ability of host states to regulate and on access to justice for investment-affected rights holders. The chapter also explores whether and how human rights issues have been addressed by the investment regime to date, highlighting recent developments in treaty drafting practice and responses to human rights argumentation by investment tribunals. It notes the shortcomings of current approaches, and concludes by briefly setting out options for reform.
Topic:
Government, Human Rights, Treaties and Agreements, Reform, and Investment
Political Geography:
Global Focus

59. Innovative Financing Solutions for Community Support in the Context of Land Investments

Author:
Sam Szoke-Burke and Kaitlin Y. Cordes
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Communities affected by agricultural, forestry, and other resource investments urgently need increased funding for legal and technical support. Without support, communities risk losing access to critical land and resources, suffering human rights violations, or missing opportunities to benefit from investments. A lack of community support can also lead to conflict and challenges that are damaging for companies and host governments. Donors and support providers have found ways to finance support for communities, but such efforts can only extend so far. Promising new opportunities exist for filling the financing gap, yet they will require sustained efforts by a range of actors. This report presents a call to action to help communities secure the support they so crucially need. The report explores options for tapping new funding sources for community support. These include: Government marshaling of funding from companies and others, through taxes, fees, and penalties Basket funds, operated by independent, trusted entities and funded by contributions from multiple actors Market-based impact investments and social impact bonds Direct company funding Third party funding Other solutions for increasing funding or reducing costs, including crowdfunding, generating profits from social enterprises, affordable user fees or in-kind services, contingency and uplift fees, and court-ordered fee shifting. The report also presents overarching considerations for developing a new financing initiative. These include: the initiative’s likely cost, efficiency and financial sustainability, political complexity and obstacles, political economy implications, the importance of strong governance mechanisms, and the logistics required to link funding, communities and support providers.
Topic:
Agriculture, Human Rights, Natural Resources, Investment, and Land
Political Geography:
Global Focus

60. Advancing SDGs in International Investment Agreements: Building Peace and Justice through General Exceptions Clauses

Author:
Guy Marcel Nono
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
For more than a decade, there has been a lot of focus on how sustainable development relates to international investment law. The growing trend of including general and security exceptions clauses in international investment agreements (IIAs) has also been highlighted. However, the nexus between general IIAs and security exceptions and the achievement of the SDGs has not been explored.
Topic:
Security, International Law, Sustainable Development Goals, and Investment
Political Geography:
Global Focus