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2251. Growth without Economic Transformation: Economic Impacts of Ghana's Political Settlement

Author:
Lindsay Whitfield
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
Since the Fourth Republic was inaugurated in 1993, politics in Ghana has been increasingly characterized by competitive clientelism. Ruling coalitions are characterized by a high degree of vulnerability in power due to a strong opposition party, by strong lower-level factions within the ruling coalition due to their importance in winning elections, and by a high degree of fragmentation among the ruling elite. These characteristics, combined with a weak domestic capitalist class and high inflows of foreign aid, have led the ruling elites across political parties to pursue and implement policies that have a short time horizon, that do not significantly shift the allocation of resources towards building productive sectors, and which are often plagued by problems of enforcement. The results have led to growth without economic transformation. In particular, the country has witnessed recurrent macroeconomic instability, a haphazard process of privatization of state-owned enterprises, and no serious attempt to build up productive sectors outside of cocoa and gold.
Topic:
Democratization, Development, Economics, Politics, Social Stratification, Foreign Aid, and Governance
Political Geography:
Africa and Ghana

2252. Political Challenges to Developing Non-Traditional Exports in Ghana: The Case of Horticulture Exports

Author:
Lindsay Whitfield
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
The nascent Ghanaian horticulture export sector, which emerged in the mid-1980s, has been ignored by ruling elites, especially after the return to multiparty democracy in 1993. Ruling elites across the two party governments between 1993 and 2008 did not actively pursue initiatives to support the industry. Without sustained political support, the types of public-private coordination of actions and investments needed to help the sector expand and upgrade were not forthcoming in an effective and timely manner. This private sector-driven non-traditional export sector constitutes a neglected opportunity for export diversification and building a new agro-industry, and also highlights some of the factors explaining why the country's economy was still dependent on the traditional exports of cocoa and gold by the close of the 2000s. The political challenges to changing the productive structure in Ghana can be found in the characteristics of ruling coalitions–vulnerability of the ruling elite in power, the high fragmentation within ruling coalitions, and their existing sources of and strategies for financing the state and the ruling coalition, combined with the country's existing economic structure as well as the size and capabilities of domestic capitalists. The characteristics of ruling coalitions in Ghana shaped the incentives facing ruling elites such that the ruling elites were not sufficiently compelled to support new productive sectors, such as horticulture export, which did not (yet) provide substantial revenues.
Topic:
Agriculture, Economics, International Trade and Finance, Social Stratification, and Governance
Political Geography:
Africa and Ghana

2253. Knowledge, FDI and catching-up strategies

Author:
Francisco . Sercovich
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A recent Perspective by Terutomo Ozawa singles out protectionism and foreign direct investment (FDI) as alternative drivers for the take-off phase of catching-up industrialization. This dichotomy neglects the rich and nuanced variety of strategic options revealed by recent successful industrialization experiences.
Topic:
Development, Economics, International Trade and Finance, Science and Technology, and Foreign Direct Investment

2254. FDI in retailing and inflation: The case of India

Author:
Nandita Dasgupta
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
India's food price inflation is a major driving factor behind the country's overall accelerating inflation over the past few years. Agricultural food prices in particular have risen recently: over the past year vegetables have become costlier by 18%, pulses by 14%, milk by 10%, and eggs, meat and fish by 12%. The rise in fruit prices was, however, relatively smaller (5%), and the same happened for cereals (3%). This price escalation is largely due to an inefficient supply chain in agriculture. Some of the supply side constraints have been identified: poor agricultural productivity, lack of corporate involvement in agriculture, ceilings on landholding size, existence of middlemen, hoarding, and, more importantly, insufficient cold storage facilities and transportation infrastructure. Around 50% of fresh produce in India rots and goes to waste between the farm gate and the market because of inadequate cold storage facilities and a poor distribution network. These factors unfavorably affect agricultural supply, create a supplydemand gap and help raise food prices.
Topic:
Security, Agriculture, Development, Economics, Food, and Foreign Direct Investment
Political Geography:
South Asia and India

2255. Outward FDI from Greece and its policy context

Author:
Aristidis P. Bitzenis and Vasileios A. Vlachos
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
With the fall of centrally planned economies in the Balkans, their liberalization and the opening of their borders to free trade and capital movements, Greece became more active in the generation of outward foreign direct investment (OFDI). Greece's OFDI stock increased from US$ 3 billion in 1990 to US$ 6 billion in 2000 and to US$ 38 billion in 2010. The Europeanization process of Turkey and the transition of the economies in the Balkans was accompanied by a gradual rise of FDI from Greece into those economies. More than half of Greece's OFDI stock – over US$ 20 billion in 2009 (67% of total) – is located in South-East Europe: in the Balkans, Cyprus and Turkey. While Greece's early OFDI flows were directed to the secondary sector to reduce costs, the bulk of later flows was directed to the services sector, as new markets were opened. This shift signifies the rise of major corporate players. The Greek Balkan policy, which commenced through the European Union, and the upgrading of the Athens Stock Exchange have positively affected Greece's position as a key regional investor. The expectations for sustaining this leading role, however, have been weakened recently since, due to the Greek sovereign debt crisis, Greek multinational enterprises (MNEs) disinvested US$ 1.6 billion from their FDI abroad in 2010.
Topic:
Debt, Economics, Foreign Direct Investment, and Financial Crisis
Political Geography:
Europe, Turkey, Greece, Balkans, and Cyprus

2256. Inward FDI in Italy and its policy context

Author:
Marco Mutinelli and Lucia Piscitello
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
The attractiveness of the Italian economy for inward foreign direct investment (IFDI) has been traditionally limited, despite the country's locational advantages such as a large domestic market and a skilled labor force. The recent global crisis worsened the country's IFDI position, with flows falling from US$ 40 billion in 2007 to -US$ 11 billion in 2008 before recovering to US$ 20 billion in 2009 but down again to US$ 9 billion in 2010. Although the country's IFDI stock had grown since 2000 at a rate similar to that of the European Union as a whole, in 2010 IFDI stock contracted vis-à-vis 2009, reflecting how Italy, compared to other key European countries and to its own potential, continues to underperform. The main obstacles to exploiting the country's potential for IFDI lie both in the largely insufficient actions undertaken to attract and promote IFDI, and especially in the lack of coordination with other relevant policy measures (e.g. infrastructure development) within a broader framework aimed at regional and national development.
Topic:
Development, Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Europe and Italy

2257. Multilateral Political Missions and Preventive Diplomacy

Author:
Richard Gowan
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
Multilateral political missions—teams of primarily civilian experts deployed by international and regional organizations with medium- to long-term mandates—play an overlooked role in preventing conflicts in fragile states. Their roles range from addressing long-term tensions to facilitating agreements to quelling escalating violence. More than six thousand personnel are deployed in political missions worldwide. The United Nations and the Organization for Security and Co-operation in Europe oversee the majority of these missions. Although many political missions deal with active conflicts or post conflict situations, some have contributed to conflict prevention in countries ranging from Estonia to Guinea. In the right circumstances, multilateral missions can provide expertise and impartial assistance that national diplomats—whether ambassadors or special envoys—cannot. The activities of political missions include short-term preventive diplomacy, the promotion of the rule of law, and the provision of advice on socioeconomic issues. Some are also involved in monitoring human rights and the implementation of political agreements. Others have regional mandates allowing them to address multiple potential conflicts. A political mission's role differs depending on how far a potential conflict has evolved. In cases where latent tensions threaten long-term stability, a mission can focus on social and legal mechanisms to reduce the risk of escalation. Where a conflict is already escalating, a mission can become directly involved in mediating a peaceful resolution. Even where a conflict tips into full-scale war, a political mission may assist in mitigating violence or keeping political channels open. To strengthen political missions, the United States and its partners should work with the UN Secretariat to revise the rules governing the planning, funding, and start-up processes for political missions and overhaul U.N. personnel rules to make recruiting civilian experts easier. They should also encourage regional organizations to invest more in this type of conflict management tool.
Topic:
Conflict Resolution, Conflict Prevention, Diplomacy, Economics, International Cooperation, International Law, and United Nations
Political Geography:
United States

2258. European Neighbourhood Policy: How to Reconcile EU's Offer with Neighbour's Expectations?

Author:
Beata Wojna and Monika Arcipowska
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
The Polish Institute of International Affairs
Abstract:
Since its launch in 2004, the ENP has succeeded in bringing about a strengthening of economic relations, especially trade, between the EU and its neighbours. However, the political record of the seven-year implementation of this policy is relatively poor. The violent, unprecedented socio-political changes in North Africa and the Middle East, which started in January 2011, revealed weaknesses and problems in the European policy towards its southern neighbours as developed in the framework of the Barcelona Process and the Union for the Mediterranean. Arab spring has shown that the EU support to introduce political reforms and to build and consolidate democracy in the southern neighbouring countries has yielded very limited results. The Eastern Partnership seems to be one of the few positive manifestations of the European Neighbourhood Policy's evolution in recent years but is not free from problems. The most tell-tale sign of the Eastern Partnership's deficiencies is a palpable relapse in democratisation.
Topic:
Foreign Policy, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Africa, Europe, and Middle East

2259. Not (yet) an Energy Revolution. India between Climate Change Mitigation and Development Imperatives

Author:
Lidia Puka
Publication Date:
10-2011
Content Type:
Policy Brief
Institution:
The Polish Institute of International Affairs
Abstract:
Indian decisions regarding the country's energy mix have global consequences. For this reason it is of paramount importance whether Indian declarations to take on climate change mitigation efforts could, indeed, mean a shift away from a fossil fuels-dominated energy mix and towards the deployment of renewable energy sources.
Topic:
Climate Change, Demographics, Development, Economics, and Energy Policy
Political Geography:
Asia

2260. Between Revolution and Stagnation: Perspectives for Belarus

Author:
Anna Maria Dyner
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
The Polish Institute of International Affairs
Abstract:
Belarus faces a serious economic and financial crisis, which may have a significant impact on the political transformation of that country. Because of increases in living costs, which are part of the aftermath of the devaluation of the Belarusian ruble and rapidly rising inflation, an explosion of mass public protests is forecast for the autumn. However, it is not expected that the protests will bring about a rapid (pro-European) turn in the political situation in Belarus. Moreover, the weakness of the opposition, which after the presidential election of 2010 became even more divided than before and still has no charismatic leader, is not propitious to radical, pro-European changes.
Topic:
Economics, Social Stratification, and Financial Crisis
Political Geography:
Europe and Asia