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1. Financing Capital Assets: The Missing Link in Defence Procurement

Author:
Vern Kakoschke
Publication Date:
03-2020
Content Type:
Policy Brief
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
Defence procurement in Canada has had some well-known challenges in recent years. Many commentators have suggested possible strategies for fixing the defence procurement system. The identified problems include overspending on defence programs, unnecessary and undue delays in re-equipping Canada’s fleet of aircraft, ships and ground transport, and defence budgets that remain unspent. The problems also include procuring authorities experiencing a shortfall in manpower and expertise, the inability to execute on defence procurements, unjustified sole-sourcing without a proper competition, political interference in selection issues, and the list goes on. The proposed solutions often address process-related matters: establish a single agency responsible for defence procurement or perhaps a cabinet secretariat to manage the involvement of three of four government departments who are often not on the same page. To date, not much has been written or discussed in public policy forums on a critical question: How should the necessary capital assets be financed? At one extreme, Canada could simply write a cheque and pay for them up front, thereby placing the assets on Canada’s balance sheet. At the other extreme, Canada could drop the financing obligation into the laps of private-sector bidders and let them worry about the most efficient way of raising the necessary capital. A middle-ground solution could involve a public-private partnership (P3) structure, a model which seeks to balance the interests of the public and private sectors in a manner that leads to a better solution for all parties. Any public policy discussion often begins with first principles. What is the government’s policy objective? It is to procure the best available equipment, with the most benefit to the Canadian economy or local interest groups and at the lowest possible cost. All three goals must be balanced in a manner that is politically acceptable, meets budget constraints and withstands public scrutiny. In major procurements, capital can be the largest single cost of a defence procurement.
Topic:
Defense Policy, Government, Armed Forces, Finance, and Public Policy
Political Geography:
Canada and North America

2. Responding to Kissinger: The Risks of Remodeling Neoliberalism and Manipulating the Enlightenment values

Author:
Mohammed Cherkaoui
Publication Date:
04-2020
Content Type:
Special Report
Institution:
Al Jazeera Center for Studies
Abstract:
Kissinger aims to skip any debate of the financial elitist performance of Neoliberalism. He seeks to dissipate concerns over a post-Coronavirus reality with some romanticized Enlightenment values. He expects the world’s democracies “to defend and sustain their Enlightenment values.”
Topic:
Finance and Neoliberalism
Political Geography:
North America and United States of America

3. Exposing the Financial Footprints of North Korea’s Hackers

Author:
Jason Bartlett
Publication Date:
11-2020
Content Type:
Special Report
Institution:
Center for a New American Security
Abstract:
North Korea conducts intricate and sweeping cyberattacks against the United States and its allies to acquire funds to support its illicit nuclear proliferation efforts. Unlike more economically advanced nuclear states possessing domestic research, development, and deployment capacities to establish weapon of mass destruction (WMD) programs, the Democratic People’s Republic of Korea (DPRK) must seek financial resources, assistance, and institutional knowledge, at least initially, from overseas. It has developed its cyber capabilities in order to circumvent financial sanctions and global safeguards, conducting elaborate online bank heists and hacking attacks; stealing funds through fraudulent bank transfers, Society for Worldwide Interbank Financial Telecommunications (SWIFT) transactions, and ATM cash-outs; launching ransomware attacks demanding payment in cryptocurrency; and hacking cryptocurrency exchanges. The scale and sophistication of these innovative sanctions evasion tactics create a challenge that calls for stronger measures to confront them. In addition to providing policy recommendations for U.S. leadership and financial institutions, this report will outline the ways North Korea supports, expands, and utilizes cyber operations to acquire funds for its nuclear weapons program.
Topic:
Science and Technology, Cybersecurity, and Finance
Political Geography:
Asia, North Korea, North America, and United States of America

4. Strategic Insights: Five Myths Associated With Employing Private Military Companies

Author:
Edward Mienie and C. Anthony Pfaff
Publication Date:
04-2019
Content Type:
Special Report
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
In August of 2017, Blackwater founder Erik Prince offered a plan for privatizing the war in Afghanistan, where he would replace the approximately 23,000 multinational forces (of which 15,000 are U.S. troops) and 27,000 contractors with 2,000 special forces and 6,000 security contractors who would embed with the Afghan National Army. Though the administration apparently rejected the plan at the time, multiple media outlets report there may be renewed interest, especially given the United States remains unable to resolve the conflict despite adopting a new, more aggressive strategy. Predictably, and justifiably, this interest has sparked a great deal of concern. Both former Secretary of Defense James Mattis and Chief of Staff John Kelly, in addition to a host of others, are reportedly opposed to the plan. With their departure, another opportunity to reconsider Prince’s proposal may arise.
Topic:
Military Affairs, Finance, Business, Military Spending, and Private Sector
Political Geography:
Afghanistan, Middle East, North America, and United States of America

5. Global E-Commerce Talks Stumble on Data Issues, Privacy, and More

Author:
Gary Clyde Hufbauer and Zhiyaou (Lucy) Lu
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In early 2019, several important members of the World Trade Organization (WTO) submitted noteworthy proposals in a realm of international commerce that has evolved faster than rules to govern it: e-commerce or digital trade. While countries agree on less controversial subjects like banning unsolicited commercial electronic messages, the three leading WTO members—China, the European Union, and the United States—have big differences in their approaches to more challenging issues: data flows, data localization, privacy invasions by data collectors, transfer of source code, imposition of customs duties and internet taxes, and internet censorship. Their differing viewpoints lead Hufbauer and Lu to conclude that the prospect of reaching a high-level WTO e-commerce agreement is not promising. To reach an agreement, either most of the contentious issues must be dropped or the number of participating countries must be sharply reduced. A WTO accord, even of low ambition, would have value if only to establish basic digital norms on matters such as banning unsolicited commercial messages and protecting online consumers from fraudulent practices. A more ambitious accord covering the controversial issues should be negotiated in bilateral and/or plurilateral/regional pacts rather than in the WTO.
Topic:
Economics, World Trade Organization, Finance, Privacy, and Data
Political Geography:
China, Europe, Asia, North America, United States of America, and European Union

6. US-China Trade War: Both Countries Lose, World Markets Adjust, Others Gain

Author:
Sherman Robinson and Karen Thierfelder
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The terms of the US-China trade war change often, but the tariff escalations have inflicted documented economic damage on both countries. Expanding the conflict will only increase the damage and reverberate across the world economy. This Policy Brief uses a computable general equilibrium model of the global economy to analyze three scenarios that could unfold in coming months. The first scenario is the current situation (as of June 2019). Two additional scenarios assume implementation of proposed US tariffs and Chinese responses. The models project the situation after the two countries and the rest of the world adjust across a time horizon of three to five years. For the United States, higher tariffs raise prices and reduce demand for consumers and producers. For China, the tariffs raise the prices of consumer goods but have less direct impact on producers, because the Chinese have exempted some intermediate inputs. US exports and imports decline under all three scenarios. But China can successfully divert its exports away from the United States and escape maximum economic damage.
Topic:
Economics, Global Markets, Finance, Trade Wars, and Trade
Political Geography:
China, Asia, North America, and United States of America

7. New risks to global financial stability

Author:
Hung Tran
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The post-2008 financial regulatory reform has strengthened the banking system, bringing the bank-generated liquidity expansion under control. However, central-bank liquidity has been growing significantly for more than a decade, and financial mediation has moved from banks to non-bank financial institutions, and from lending to capital-market transactions. This new system has created new financial imbalances and distortions and pose new areas of vulnerability that require appropriate policy responses. In “New Risks to Global Financial Stability” author Hung Tran, a nonresident senior fellow at the Atlantic Council’s Global Business & Economics program, assesses the global financial system weaknesses and outlines steps to promote financial stability. Tran updates a framework, first developed by the Committee on the Global Financial System, to recommend policy responses along three lines of defense: prevention of excess liquidity; strengthening domestic policy measures; and cooperative provision of central-bank liquidity.
Topic:
Regulation, Finance, Economy, Business, and Macroeconomics
Political Geography:
Canada, North America, and United States of America

8. Employment Structure and the Rise of the Modern Tax System

Author:
Anders Jensen
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper shows how the increase in information trails through the long-run transition from self-employment to employee-jobs explains the rise of the modern income tax system. I construct a new database which covers 100 household surveys across countries at different income levels and 140 years of historical data within the US (1870-2010). Using these data, I first establish four new stylized facts: 1) within country, the share of employees increases over the income distribution, and increases at all levels of income as a country develops; 2) the income tax exemption threshold moves down the income distribution as a country develops, tracking employee growth; 3) the employee share above the exemption threshold is maximized and remains constantly high; 4) decreases in the exemption threshold are strongly associated with increases in tax collection. These findings are consistent with a model where a high employee share is a necessary condition for effective taxation and where the rise in income covered by information trails through increases in employee share drives expansion of the income tax base. To provide a causal estimate of employee share on income tax systems, I study a state-led US development program implemented in the 1950s-60s which increased the level of employee share. The identification strategy exploits within-state changes in court-litigation status which generate quasi-experimental variation in the effective implementation date of the program. I find that the exogenous increase in employee share is associated with an expansion of the state income tax base and an increase in state income tax revenue.
Topic:
Political Economy, Finance, Economy, International Development, and Tax Systems
Political Geography:
North America and United States of America

9. The Great Convergence: Toward a Global Strategy for Financial Inclusion

Author:
Timothy Ogden
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
Tim Ogden, Managing Director of NYU-Wagner’s Financial Access Initiative and Aspen FSP Senior Fellow, contextualizes financial inclusion – once thought of as a solution only for the developing world – as one highly relevant in the US context. In July, Ogden shared an abbreviated version of his remarks at the Consultative Group to Assist the Poor’s (CGAP) private meeting on updating financial inclusion’s collective narrative to include evolving thinking and impact. You can learn more about CGAP’s work here. This piece dives deeper into Ogden’s observations about the shared challenges and areas of growth within the landscape of global inclusion. It also proposes the need for a global financial inclusion strategy. Read Ogden’s piece, The Great Convergence to learn how financial inclusion efforts around the world are growing more relevant to the structural policies developed in the US, and vice versa.
Topic:
Globalization, Finance, Socioeconomics, and Inclusion
Political Geography:
North America and United States of America

10. The Time is Now: Next Steps Toward a More Secure Retirement for All Americans

Author:
Aspen Institute
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
Even after a decade of economic growth, the retirement outlook for many Americans remains precarious at best. By one estimate, half of working-age Americans are at risk of not being able to maintain their standard of living when—or if—they stop working. Spurred by this reality, the Aspen Institute Financial Security Program convened its third annual Leadership Forum on Retirement Savings in April. More than 70 experts and industry leaders gathered in Warrenton, Va., to share, evaluate, and refine solutions to the nation’s retirement crisis.
Topic:
Labor Issues, Employment, Finance, Family, and Retirement
Political Geography:
North America and United States of America