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71. The productivity paradox: policy lessons from MICROPROD

Author:
Gregory Claeys and Maria Demertzis
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Productivity growth in Europe has been on a downward trend for several decades. Given that productivity growth is a crucial source of output growth, particularly in an aging society like the European Union, it is crucial to understand what is driving this slowdown and what the potential consequences are for our economic model and for citizens’ welfare. Some explanations for this trend are global in nature, but there are also significant differences in country structures in Europe that have led to different outcomes and that need to be accounted for before policy prescriptions can be made. The objective of MICROPROD, an EU-wide research project that runs until the end of 2021, is to contribute to this research strand by using data from various European countries to study the microeconomic mechanisms behind this macroeconomic phenomenon. In particular, the aim is to understand the challenges posed to Europe by the fourth industrial revolution and its impact on productivity in the context of globalisation and digitalisation, and to recommend policies to address these challenges. MICROPROD researchers have so far delivered 20 papers on four broad issues relevant for today’s policy debates: the measurement and effects of intangible capital on productivity; the impact of globalisation, international trade and the integration of global value chains (GVCs) on productivity; factor allocation and allocative efficiency; and finally the social consequences of the two structural shocks Europe has faced in the last two decades: globalisation and technological progress. This Policy Contribution reviews the main conclusions of these 20 MICROPROD papers and how they inform policy debates. However, the mid-point of the three-year MICROPROD project also coincided with the start of the COVID-19 crisis, which might have accelerated some trends or possibly reversed others. We therefore discuss how some of the messages of MICROPROD research may contribute to our understanding of the current crisis and its aftermath.
Topic:
Globalization, Governance, European Union, Macroeconomics, Productivity, and Digitalization
Political Geography:
Europe

72. Jihadi Radicalization: Between the Local and the Global

Author:
Olivier Roy
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
NATO Defense College
Abstract:
Any counter-terrorist policy should be shaped according to the nature of the threat. For an alliance like NATO, it is particularly import- ant to distinguish the fundamental characteristics of global movements from local terrorist entities. Whilst global jihadi propaganda and Islamist ideology still represent a significant danger, in many instances, it is the local dynamics that prevail. Complex NATO operations – designed to prevent, stabilize or rebuild – must be framed and designed accordingly.
Topic:
Defense Policy, NATO, Globalization, Regional Cooperation, Terrorism, Military Strategy, Radicalization, Local, and Jihad
Political Geography:
Europe, North Atlantic, and North America

73. The Good, the Bad and the Ugly: Taking Stock of Europe’s New Trade Policy Strategy

Author:
Fredrik Erixon
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief takes stock of the EU Trade Policy Review – the Commission’s proposed strategy for trade. Despite appearances, the Review doesn’t come close to its billing as a strategy for the new geopolitics of trade. In fact, the Review is weak on key geopolitical developments and rather gives the impression that the EU doesn’t have an ambition to shape outcomes. Obviously, the Review is anchored in Europe’s general economic climate: defensiveness on globalization, competition and digitalization. It follows that Europe is getting increasingly detached from world developments. There are several good parts in the Review. The Commission wants to revive and reform the World Trade Organisation, and it’s clear about what factors that have made the Geneva-based trade body dysfunctional. The Review also acknowledges that the EU will seek a closer alliance with the United States and use that for constructive purposes. Finally, it is welcome that the Commission proposes some new instruments for dealing with market distortions caused by foreign subsidies and protectionism in government procurement. All these initiatives can achieve good outcomes. However, they all require that Europe makes changes in its own policies and positions. The bad parts in the Review are Europe’s weak agenda for getting better market access in the growth regions in the world and its continued passivity on matters related to China. Europe’s main trade-policy challenge in the next decade is to ensure that businesses and consumers in Europe get better integrated with a world-market dynamism that predominantly will come from the Asian region. Absent a realistic and medium-term strategy for dealing with challenges connected to the rise of China, Europe will have difficulties getting the EU-China Comprehensive Agreement on Investment approved. Europe needs an actionable agenda for addressing bilateral frictions with China and problems that occur outside bilateral trade. Finally, the ugly part of the trade strategy are all the commercial policies in the EU – with strong effects on trade – that aren’t recognized or only casually mentioned in the Review. The latter category includes the ambition to introduce an autonomous carbon border tax on imports. Such a policy comes at a high political and economic cost, and the measure’s effect on reducing global carbon emissions is at best very negligible.
Topic:
Globalization, International Political Economy, International Trade and Finance, Treaties and Agreements, European Union, Geopolitics, Digital Economy, and Trade
Political Geography:
Europe

74. Capitalism Recoupled

Author:
Dennis J. Snower and Colm Kelly
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper examines major forces that have decoupled economic and business prosperity from social prosperity and explores how recoupling can be promoted. Economists have specified well-known conditions under which free market enterprise with shareholder value maximization is efficient. These conditions are systematically violated by three forces – globalization, technological advance and financialization (GTF) – that have weakened the connections between economies and societies over the past four decades. Consequently, the recoupling process requires abandoning the default premise of economic decision making that social progress follows financial performance. For business, it calls for a move from shareholder to stakeholder value. For government, it calls for setting legal obligations, targets and incentives to ensure that stakeholder value is compatible with a rigorously defined concept of “societal and planetary value.”
Topic:
Economics, Globalization, Science and Technology, Capitalism, and Economic Theory
Political Geography:
Global Focus

75. Artificial Intelligence, Globalization, and Strategies for Economic Development

Author:
Anton Korinek and Joseph E. Stiglitz
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Progress in artificial intelligence and related forms of automation technologies threatens to reverse the gains that developing countries and emerging markets have experienced from integrating into the world economy over the past half century, aggravating poverty and inequality. The new technologies have the tendency to be labor-saving, resource-saving, and to give rise to winner-takes-all dynamics that advantage developed countries. We analyze the economic forces behind these developments and describe economic policies that would mitigate the adverse effects on developing and emerging economies while leveraging the potential gains from technological advances. We also describe reforms to our global system of economic governance that would share the benefits of AI more widely with developing countries.
Topic:
Development, Globalization, Science and Technology, Inequality, Artificial Intelligence, and Redistribution
Political Geography:
Global Focus

76. Engaging Brazil in the era of climate action: Can Europe and the United States devise a new globalisation?

Author:
Lauri Tahtinen
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs (FIIA)
Abstract:
Increased deforestation in the Amazon is the outcome of Brazil’s long political crisis. What started in 2013 with a bus fare hike has traversed through contestable impeachment and populist uprising into a constitutional stalemate. European institutional investors have been in the vanguard of checking Brasília’s lax approach to deforestation and other environmental challenges. While investors continue to carry a big stick, European and US political leadership should consider what carrots they can offer Brasília. Brussels and Washington have changed course rapidly from an approach that emphasised closer ties with Brasília to one of dissatisfaction and distancing. This is both a cause and an effect of Brazil’s international standing diminishing both in terms of economy and country brand. In recent years, Brazil has simultaneously tried to raze more rainforest and build North Atlantic trading relations; the two cannot be done at the same time. A politics of rapprochement with Brazil requires much closer coordination between Europe and the United States than the parties are accustomed to; a commitment to a climate-sensitive globalisation is necessary from Brasília.
Topic:
Climate Change, Environment, Globalization, and International Cooperation
Political Geography:
Europe, Brazil, South America, and North America

77. Nigerian Confraternities To Conquer The World

Author:
Corentin Cohen
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales (CERI)
Abstract:
While the Nigerian brotherhoods have become increasingly prominent in the media given the criminal threat they are said to represent, they have not been the subject of any field research in Nigeria or Europe. This media coverage is fueling a growing confusion between the legal and police categorizations that are used to define these brotherhoods and the pan-African practices and discourses of solidarity and emancipation that they promote. The socio-historical approach developed in this study makes it possible to put into perspective the global expansion of confraternities since the 2000s. It offers another perspective on the role of these secret societies and their inclusion in political economies and different territories. In Europe, the Nigerian confraternities are first and foremost social institutions for the youth and the diasporas. They ensure the reproduction of the power of traditional and political elites abroad by capturing incomes linked to migration (remittances), and therefore play a key role in the production of a form of globalization of Nigerian society from below. They participate in the establishment of moral and social institutions from the south of Nigeria in Europe. Behind a discourse of empowerment and solidarity, the confraternities are thus a transnational network which perpetuates a conservative order, a social hierarchy and the inequalities which they help to naturalize.
Topic:
Globalization, Diaspora, Inequality, transnationalism, and Pan-Africanism
Political Geography:
Africa and Nigeria

78. Policy and Technology for the Greater Good: Imagining Futures

Author:
Maricela Munoz
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
The Geneva Centre for Security Policy
Abstract:
When reflecting on emerging technologies, policy, and participatory perspectives, one may conclude that security must be collective and human-centred. The concept of human security represents a departure from traditional orthodox positions, which focus on the security of the state.40 The subjects of the human security approach are individuals, and the end goal of this approach is the protection of people from all sorts of threats, e.g. disease, poverty, environmental degradation, military action, terrorism, misinformation, etc. Moving the security agenda beyond state security does not mean replacing it, but rather complementing and building on it. Central to this approach is the understanding that a lack of human security can undermine peace and stability within and between states, while an overemphasis on state security can be detrimental to human welfare.41 Science cannot solve all of humankind’s problems, and new groundbreaking discoveries may even endanger human beings. Modern policymaking, based on multidisciplinary and comprehensive participatory methodologies, must be the vehicle to achieve common understandings, reconciling technology for the greater good with political and business priorities. Good implies that it will solve social and environmental challenges. In recent decades public policy has centred on the promotion of macroeconomic growth, but has done little to guarantee individual and societal well-being.42 But it is possible to incorporate public values into policymaking, improving its effectiveness and increasing trust in institutions while informing and educating the general public. Public meetings, multisectoral engagements, external advisory committees, and mediation processes have shown their ability to increase the quality of decision-making and produce a positive impact. The COVID-19 pandemic allowed us to create a new model for the integration of science, technology and policy responses. We must draw important lessons from this crisis, refine the model and create incentives to mainstream good practices. The erosion of multilateralism, nationalist posturing, and the emergence of new actors and powers are changing the global order. International cooperation is failing.43 This could be a pivotal opportunity for a wider societal response, where polymath approaches, strengthened communication, inclusive dialogue and renewed trust shape a new social contract. Today more than ever leaders in communities, countries, and globally must take a proactive approach and call for open and horizontal conversations on the intersection between science and policy. As part of these conversations, all of us are called on to become humanist leaders wherever we are, and to act without delay on the knowledge and understandings that are being built. The meaningful and effective participation of women, youth, indigenous peoples, persons with disabilities, the LGTBIQ+ community, and others is essential to building partnerships at all levels. The current crises we are facing and the expansive modernisation of technologies for a huge range of purposes have underlined the urgency of the need to embrace our human and collective security, protect our fate as a species, and imagine futures that are safe, resilient, and good for all
Topic:
Globalization, International Cooperation, Science and Technology, Humanitarian Intervention, and Emerging Technology
Political Geography:
Global Focus

79. Volume 71 Issue 2

Author:
Gökhan Karabulut
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
Istanbul Journal of Economics-İstanbul İktisat Dergisi is an open access, peer-reviewed, scholarly journal published two times a year in June and December. It has been an official publication of Istanbul University Faculty of Economics since 1939. The manuscripts submitted for publication in the journal must be scientific and original work in Turkish or English. Being one of the earliest peer-reviewed academic journals in Turkey in the area of economics, Istanbul Journal of Economics-İstanbul İktisat Dergisi aims to provide a forum for exploring issues in basicly economics and publish both disciplinary and multidisciplinary articles. Economics is the main scope of the journal. However, multidisciplinary and comparative approaches are encouraged as well and articles from various social science areas such as sociology of economics, history, social policy, international relations, financial studies are welcomed in this regard. The target group of the journal consists of academicians, researchers, professionals, students, related professional and academic bodies and institutions.
Topic:
Economics, Globalization, International Trade and Finance, Oil, Political Economy, Natural Resources, Exchange Rate Policy, and Industry
Political Geography:
Europe, Turkey, and Asia

80. Rethinking Stability in Africa

Author:
Michelle D. Gavin
Publication Date:
11-2021
Content Type:
Journal Article
Journal:
The Ambassadors Review
Institution:
Council of American Ambassadors
Abstract:
In practice, shaking off unhelpful ideas about stability does not necessarily mean abrupt policy reversals; nor does it solve thorny dilemmas in which immediate security interests dictate one course, while commitment to sustainable and accountable governing regimes dictates another. But rethinking stability should inform diplomatic strategies that pay more careful attention to the tensions between the governed and the governing and the degree to which governing institutions are responding to or resisting popular demands. The United States should take care to conceive of, implement and publicly frame our partnerships on the continent as relationships with societies, not with specific leaders. Finally, if every challenge to a given leader or party is understood as a harbinger of chaos, alarms should be going off in Washington. Evidence of growing state fragility is not a reason to double down on supporting an individual or system of governance that engendered that weakness. When a head of state or government is deemed indispensable, policy has lost its way. Policymakers need to reckon with the truths that change is not synonymous with instability, and that the apparent safety of working with known quantities is often a costly illusion.
Topic:
Globalization, International Cooperation, Hegemony, and Strategic Stability
Political Geography:
Africa, North America, and United States of America