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21. International Financial Regulation: Why It Still Falls Short

Author:
William White
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
While recent reforms are welcome in many ways, there are still significant reasons to doubt that the post-crisis tightening of international financial regulation guarantees future financial and economic stability. The most important reason is that the reforms have focused too narrowly on ensuring that an unstable financial sector will not aggravate downturns by restricting the supply of credit. More attention needs to be paid to ensuring that an overly exuberant financial system does not weaken other parts of the economy by encouraging a rapid buildup of debt during upturns. Some combination of time-varying monetary and regulatory policies (a macrofinancial stability framework) will be required to do this. In addition, many of the individual regulatory measures taken to date, both macroprudential and microprudential, have shortcomings. Their coherence as a package has also been questioned.
Topic:
Political Economy, Financial Crisis, Reform, Banks, and Subsidies
Political Geography:
Global Focus

22. Distributional Effects of Reducing Energy Subsidies: Evidence from Recent Policy Reform in Argentina

Author:
Fernando Giuliano, Maria Ana Lugo, Ariel Masut, and Jorge Puig
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We analyze the distributional effects of the reduction in energy subsidies in Ar- gentina since 2016. As the policy reform also includes the introduction of a scheme to protect less well-off families (social tariff), we also review how well the targeting mechanism works. We apply traditional benefit-incidence analysis using household surveys and administrative data, focusing on residential subsidies to natural gas and electricity in the Buenos Aires Metropolitan Area. We find that the social tariff is relatively pro-poor, with significantly higher coverage among the poorest households. There are some exclusion errors in the low-income deciles and large inclusion errors in the medium- and high-income deciles. The distributive incidence of subsidies does not appear to have changed substantially. Energy subsidies in Argentina (lower in aggregate terms) continue to be, although progressive, pro-rich. The distributional effect is explained by the fact that generalized subsidies to all categories of consumption coexist with a relatively well targeted social tariff. Re- garding energy budget shares, monthly spending on electricity has increased from 1.1 percent of total household income to 3.4 percent. Monthly spending on piped gas rose from 1.3 percent to 3.3 percent. These shares are in line with many other countries in the region. Naturally, there has been a convergence of tariffs toward service provision costs.
Topic:
Energy Policy, Reform, Subsidies, and Public Spending
Political Geography:
Argentina and South America

23. Agricultural input subsidy and farmers outcomes in Tanzania

Author:
Bethuel Kinyanjui Kinuthia
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of the government input subsidy—the National Agriculture Input Voucher—on farmers’ production and welfare in Tanzania as well as the factors that influence agricultural production in the country. The analysis is based on the Living Standards Measurement Study-Integrated Surveys on Agriculture for 2008–13. The study uses panel fixed effects and difference-in-difference and propensity score matching methods to examine the two objectives. The results show that the input subsidy programme resulted in an initial increase in maize and rice production but not in the long run and only in a few regions. In addition, there was a decrease in total production in the southern region and the programme had little effect on farmers’ welfare. The results show that this programme only partly met the expected outcomes in Tanzania due to mistargeting, inaccurate identification of households, and poor implementation.
Topic:
Agriculture, Development, Welfare, Farming, and Subsidies
Political Geography:
Africa and Tanzania