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31. NATO’s Futures: the Atlantic Alliance between Power and Purpose

Author:
Sten Rynning
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
NATO Defense College
Abstract:
This NDC Research Paper argues that in spite of these warning signs, NATO can regain its balance between power and purpose and thus secure its future. NATO’s balancing act is ultimately a question of leadership: it is within the reach of Allied leaders to balance the interests and geopolitics of Europe and Asia, as well as the restrained and affirmative policies that represent Canada and Europe’s inclination for concerted diplomacy on the one hand and the United States inclination for strategic engagement on the other. Regrettably, these leaders may be drawn to some of the easy NATO visions that offer stringency of purpose, as in “come home to Europe”, or inversely, “go global”. Yet the reality of the Alliance’s geopolitical history and experience is that NATO is strong when apparently contrasting interests are molded into a balanced vision. Today, NATO can only encourage European investment in global, US-led policy if it secures stability in Europe, while inversely, NATO can only secure US investment in Europe’s security order if the Allies are open to coordination on global affairs. The report first outlines the basic geopolitical trends with which the Alliance is confronted: an Alliance leader questioning its heritage of overseas engagement, China’s rise as a great power, an emerging alignment between China and Russia in opposition to liberal order, and the track record of southern unconventional threats dividing the Allies on matters such as counter-terrorism, immigration control, stabilization and development. The Allies seem to be hesitating on the West-East axis and paralyzed as a collective on southern issues, which leads the report to sketch three NATO futures.
Topic:
NATO, Diplomacy, Regional Cooperation, Liberal Order, and Investment
Political Geography:
Russia, China, Europe, North Atlantic, Asia, and North America

32. Chinese investment: State-owned enterprises stop globalizing, for the moment

Author:
Derek Scissors
Publication Date:
01-2019
Content Type:
Special Report
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Chinese investment around the world fell sharply in 2018. The decline was most evident later in the year and among state-owned enterprises. These companies also engaged in fewer power construction projects. The number of countries in the Belt and Road Initiative keeps expanding, but activity levels per country are flat. One explanation for weakness in various Chinese efforts to “Go Out” is caution in drawing down foreign exchange reserves. The US has restricted Chinese investment, but it was already small in size in 2018. Serious problems remain—for example, theft and coercive transfer of technology. Firms violating American law should face sanctions, not just investment bans.
Topic:
Globalization, Foreign Direct Investment, Sanctions, Business, and Investment
Political Geography:
China, Asia, North America, and United States of America

33. Climate Scenarios for the Canadian Lending and Investment Industry

Author:
Olaf Weber and Adeboye Oyegunle
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
Recently, a task force has been established by the Financial Stability Board that addresses climate risks for the financial industry. The Task Force on Climate-related Financial Disclosures (TCFD) has published recommendations for standardized disclosure about climate-related risks, and it has proposed developing scenario analyses to address climate-related risks for the financial industry. Using the climate risk indicators developed by the TCFD, an impact analysis that explored how direct impacts of the risk indicators influence one another was conducted. In addition, the influence of indirect impacts of the risk indicators on each other was examined by using a mathematical approach, the cross impact matrix-multiplication applied to classification (MICMAC Analysis). Finally, three scenarios were generated (a business as usual scenario; a reduced climate policies scenario; and a strong climate policies scenario), from which recommendations were made that will enable the Canadian financial sector to address risks and take proactive action, including investing in a low-carbon economy, to mitigate climate change.
Topic:
Climate Change, Environment, Investment, and Financial Institutions
Political Geography:
Canada and North America

34. Reforming Investor-State Arbitration by Recourse to the Domestic Courts of Host States

Author:
Armand de Mestral and Lukas Vanhonnaeker
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
In response to concerns raised about investor-state arbitration (ISA), different proposals for reform of this means of dispute settlement have been proposed. One such proposal is to entrust domestic courts with the resolution of investment disputes. Although opting for the resolution of investment disputes before domestic courts has led to some discussion about the advantages and difficulties of this approach, very few studies have analyzed the specificities of domestic regimes in this regard. Many questions remain unanswered, including whether foreign investors have, in practice, access to domestic courts in the host state and whether the remedies available domestically are comparable to those available in ISA. In an attempt to answer some of these questions, a questionnaire was prepared and answered by respondents in 17 countries, in addition to Canada, from different regions of the world.
Topic:
Reform, Democracy, Legal Theory, and Investment
Political Geography:
United States, Canada, South America, North America, Mexico, and Peru

35. Chinese Investments in the US and EU Are Declining—for Similar Reasons

Author:
Jacob Funk Kirkegaard
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
For years China has been one of the world’s most rapidly growing sources of outward foreign direct investment. Since peaking in 2016, however, Chinese outward investments, primarily to the United States but also the European Union, have declined dramatically, especially in response to changes in China’s domestic rules on capital outflows and in the face of rising nationalism in the United States. Concerns about growing Chinese influence in other economies, the ascendant role of an authoritarian government in Beijing, and the possible security implications of Chinese dominance in the high-technology sector have put Chinese outward investments under intense international scrutiny. This Policy Brief analyzes the most recent trends in Chinese investments in the United States and the European Union and reviews recent political and regulatory changes both have adopted toward Chinese inward investments. It also explores the emerging transatlantic difference in the regulatory response to the Chinese information technology firm Huawei. Concerned about national security and as part of the ongoing broader trade friction with China, the United States has cracked down far harder on the company than the European Union.
Topic:
Economics, International Trade and Finance, National Security, Foreign Direct Investment, and Investment
Political Geography:
China, Europe, Asia, North America, and United States of America

36. Understanding the Dispute over the Treatment of Products Exported to the European Union from the Occupied Territories in the Context of the Transatlantic Trade and Investment Partnership

Author:
Oskar J. Chmiel
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
Polish Political Science Yearbook
Institution:
Polish Political Science Association (PPSA)
Abstract:
While the European Union (EU) does not recognize any legal Israeli sovereignty over the territories occupied by Israel in 1967, it does not grant preferential access to the EU market for goods produced in the Israeli settlements in this area, contrary to the preferential treatment for goods produced in Israel. This situation is different, however, as regards the United States (U.S.) trade policy, which does not make any distinction between goods pro- duced in Israel and in the Occupied Territories, since it grants the preferential access to both. Furthermore, the currently suspended negotiations of the super-regional trade agreement called the Transatlantic Trade and Investment Partnership (TTIP), spurred the enacting of a law that set the principal negotiating objectives of the U.S. regarding commercial partner- ships, which included some provisions to discourage politically motivated economic actions against the State of Israel. As TTIP embraced the free trade agreement between the EU and the U.S., the EU differentiation policy could become problematic for the two partners, which despite the failure of the negotiations, revealed much about economic diplomacy. Conse- quently, this article attempts to show the different approaches adopted by the two trading powers, in order to deal with the dispute over the treatment of products exported to the EU from the Occupied Territories.
Topic:
Territorial Disputes, European Union, Investment, Trade, and Transatlantic Relations
Political Geography:
United States, Europe, Middle East, Israel, Palestine, and North America

37. Donald J. Trump y las Relaciones Cuba-Estados Unidos en la Encrucijada

Author:
Soraya M. Castro-Mariño, Margaret Crahan, Martin Carnoy, William M. LeoGrande, Margaret Crahan, Carlos Ciaño Zanetti, James A. Nathan, Dalia González Delgado, Jorge I. Domínguez, Manuel R. Gómez, Sunamis Fabelo Concepción, Max Paul Friedman, Raul Rodríguez Rodríguez, Víctor López Villafañe, Ruvislei González Saez, Carlos M. Gutiérrez, Robert Muse, José Gabilondo, Michael P. Hatley, William A. Messina Jr., Rafael Betancourt, Ramón Pichs Madruga, Robert L. Bach, Marta Núñez Sarmiento, and Geoff Thale
Publication Date:
01-2018
Content Type:
Special Report
Institution:
Institute for Latin American and Iberian Studies at Columbia University
Abstract:
El propósito central de esta obra radica en evaluar el deterioro que ha tenido lugar en las relaciones Cuba-Estados Unidos durante el primer periodo de mandato del presidente Donald J. Trump. El texto es resultado de la XVI Serie de Conversaciones Cuba-Estados Unidos de América, celebrada en diciembre de 2017 y patrocinada por el Centro de Investigaciones de Política Internacional adscrito al Instituto Superior de Relaciones Internacionales “Raúl Roa García” de La Habana (CIPI-ISRI). Desde diferentes ángulos se analizan el entorno internacional y el regional, así como los acontecimientos que están teniendo lugar en Cuba y en Estados Unidos, lo cual brinda múltiples explicaciones a procesos en pleno desarrollo. Sin embargo, estos contextos reflejan signos contradictorios que expresan una circunstancia histórica concreta, donde nacionalismos y populismos de extrema derecha han capitalizado el momento político internacional. En esa dirección es lógico prestarle atención a Estados Unidos y a la presidencia de Donald J. Trump, la cual más que causa es síntoma de la crisis que vive el país y refleja inmensas transformaciones y grandes desalientos basados, entre disímiles causas, en una insondable inequidad socio-económica y política. La respuesta es la agenda conocida como “America First”, que adolece de una mirada estratégica a mediano y a largo plazo, y pone en duda el papel de ese país en el Orden Mundial en el siglo XXI. El libro está destinado a audiencias interesadas en entender estas profundas problemáticas, sus causas y, particularmente, las negativas consecuencias que han tenido en el incipiente proceso hacia la normalización de relaciones con la República de Cuba, iniciado en diciembre de 2014. Al mismo tiempo, intenta explicar esta coyuntura como un paréntesis pues, más tarde que temprano, se deberá regresar a la lógica de la cooperación y la colaboración entredos países que, más allá de sus diferencias, comparten historia y un mismo entorno geográfico.
Topic:
Security, Economics, Migration, Bilateral Relations, Elections, Investment, and Donald Trump
Political Geography:
China, Cuba, Latin America, Caribbean, North America, and United States of America

38. The Subversion of Shareholder Democracy and the Rise of Hedge-Fund Activism

Author:
Jang-Sup Shin
Publication Date:
07-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper explains how hedge-fund activists are exerting power over corporate resource allocation far in excess of the actual voting power of their shareholdings. The power of these “minority-shareholding corporate raiders” derives from misguided regulatory “reforms” carried out in the 1980s and 1990s in the name of “shareholder democracy”. Sanctioned and overseen by the Department of Labor (DOL) and the Securities and Exchange Commission (SEC), these reforms include the introduction of compulsory voting by institutional investors and proxyvoting rule changes that greatly facilitated hedge-fund activists’ aggregation of the proxy votes of institutional investors. In addition, the introduction of the 1996 National Securities Markets Improvement Act (NSMIA) that allowed hedge funds to draw funds from institutional investors effectively with no limit also played an important role in the rise of hedge-fund activism. The paper concludes with policy proposals to rebalance value creation and value extraction by rebuilding the engagement and proxy voting system including (1) making it mandatory for shareholders to submit justifications in shareholder proposals on value creation or capital formation of corporations concerned; (2) removing voting as a fiduciary duty of institutional investors; (3) introducing differentiated voting rights that favor long-term shareholders; and (4) making it mandatory for both shareholders and management to reveal to the public what they discussed in engagement sessions.
Topic:
Economics, Regulation, Finance, Investment, Shareholder Democracy, Hedge Funds, and Value Extraction
Political Geography:
North America and United States of America

39. The Framework for a U.S.-Japan Free Trade Agreement

Author:
Derek M. Scissors and Dan Blumenthal
Publication Date:
09-2017
Content Type:
Working Paper
Institution:
Project 2049 Institute
Abstract:
The United States and Japan can create a bilateral free trade and investment agreement that both sides will sign and ratify. While the Trans-Pacific Partnership (TPP) initially appeared to qualify as the new approach the U.S., Japan, and East Asia needed. It failed to sufficiently promote free markets and address concerns to generate enough support from traditional protectionist opponents in the United States. Nonetheless, the TPP did clarify the value of a directly relatied initiative: a U.S.-Japan bilateral agreement. This monograph serves to provide a framework for a U.S.-Japan Free Trade Agreement (FTA) and offers an outline for what such an agreement should look like in order to work both economically and in terms of domestic politics.
Topic:
Economics, Treaties and Agreements, Domestic Politics, Investment, and Free Trade
Political Geography:
Japan, Asia, North America, and United States of America

40. The Value-Extracting CEO: How Executive Stock-Based Pay Undermines Investment in Productive Capabilities

Author:
William Lazonick
Publication Date:
12-2016
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The business corporation is the central economic institution in a modern economy. A company’s senior executives, with the advice and support of the board of directors, are responsible for the allocation of corporate resources to investments in productive capabilities. Senior executives also advise the board on the extent to which, given the need to invest in productive capabilities, the company can afford to make cash distributions to shareholders. Motivating corporate resource- allocation decisions are the modes of remuneration that incentivize and reward the top executives of these companies. A sound analysis of the operation and performance of a modern economy requires an understanding of not only how much these executives are paid but also the ways in which the prevailing system of executive pay influences their decisions to allocate corporate resources. In the United States since the last half of the 1980s the overriding goal of U.S. corporations has been to “maximize shareholder value,” with corporate performance measured by a company’s “total shareholder return”: percentage stock-price appreciation plus dividend yield. Also since the 1980s, the most important components of the total compensation of senior executives have been modes of stock-based pay in the forms of stock options and stock awards. This stock-based pay is structured to incentivize executives to make corporate allocation decisions that will boost the stock prices of the companies that employ them and reward them for achieving that objective. There are three drivers of stock prices: innovation, speculation, and manipulation. The first critical question that this paper addresses is which of these drivers, individually or in combination, contribute to a company’s stock-price performance. Then we can ask the second critical question: Does executive compensation reflect the success of the company in value creation, or the power of senior executives to engage in value extraction? The “value- extracting CEO” hypothesis posits that, in the United States, a significant portion of senior executive compensation rewards them for making decisions that foment speculation and manipulate stock prices, and thereby extract value for their own personal gain. In section four of the paper, I invoke the theory of innovative enterprise to support this hypothesis and debunk the dominant ideology that companies should be run to “maximize shareholder value.” Finally, I elaborate the policy implications for controlling the power of the value-extracting CEO, including a) banning stock buybacks, b) requiring executive compensation that rewards innovation rather than speculation and manipulation, and c) placing stakeholders representing households as taxpayers, workers, and consumers on boards of directors of publicly listed companies, along with shareholders who represent households as savers. An intellectual precondition for these reforms is the rejection of the ideology that companies should be run to maximize shareholder value, which means replacing agency theory with innovation theory as a mode of analyzing how the operation of an economy, supported by the strategies and structures of the business enterprises within it, can attain the objectives of stable and equitable economic growth.
Topic:
Leadership, Investment, Corporations, Redistribution, Stock Markets, and Wage Growth
Political Geography:
North America and United States of America