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461. Economic Dynamics and Forest Clearing: A Spatial Econometric Analysis for Indonesia

Author:
David Wheeler, Robin Kraft, Susmita Dasgupta, Dan Hammer, and Brian Blankespoor
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper uses a large panel database to investigate the determinants of forest clearing in Indonesian kabupatens since 2005. Our study incorporates short-run changes in prices and demand for palm oil and wood products, as well as the exchange rate, the real interest rate, land-use zoning, forest protection, the estimated opportunity cost of forested land, the quality of local governance, the poverty rate, population density, the availability of communications infrastructure, transport cost, and local rainfall and terrain slope. Our econometric results highlight the role of dynamic economic factors in forest clearing. We find significant roles for lagged changes in all the short-run economic variables—product prices, demands, the exchange rate and the real interest rate—as well as communications infrastructure, some types of commercial zoning, rainfall, and terrain slope. We find no significance for the other variables, and the absence of impact for protected-area status is particularly notable. Our results strongly support the model of forest clearing as an investment that is highly sensitive to expectations about future forest product prices and demands, as well as changes in the cost of capital (indexed by the real interest rate), the relative cost of local inputs (indexed by the exchange rate), and the cost of land clearing (indexed by local precipitation). By implication, the opportunity cost of forested land fluctuates widely with changes in international markets and decisions by Indonesia's financial authorities about the exchange and interest rates. Our results suggest that forest conservation programs are unlikely to succeed if they ignore such powerful forces.
Topic:
Agriculture, Economics, Globalization, Markets, and Natural Resources
Political Geography:
Indonesia

462. Organizing Regulatory Convergence Outside the EU Setting Policy-Specific Conditionality and Building Domestic Capacities.

Author:
Julia Langbein
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
Why is regulatory convergence towards EU rules more successful in some policy fields than in others within one EU neighboring country? By comparing Ukraine\'s convergence towards EU rules in the field of shareholders\' rights and technical standards, I challenge prominent explanations for policy change outside the EU that empha¬size misfit and adaptational costs, the institutionalization of EU rules or policy-specific conditionality. In order to deal with the shortcomings of these explanations, it is necessary to disaggregate incentives and capacities of various domestic actors within the particular policy fields. I argue that regulatory convergence in EU neighboring countries is more likely if external actors combine the application of policy-specific conditionality, such as access to the European market, with multiplex capacity-building measures that diversify demand among domestic state regulators and firms and empower them to make their claims.
Topic:
Economics, International Trade and Finance, Markets, and Regional Cooperation
Political Geography:
Europe and Ukraine

463. Constrained Autonomy and the Developmental State: From Successful Developmentalism to Catastrophic Failure

Author:
Jamee K. Moudud
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
The New School Graduate Program in International Affairs
Abstract:
As many authors have argued, the state has played a central role in capitalist development, both in developing and developed countries. The question is why have some states been more successful than others in promoting economic development? In this paper I propose a theoretical agenda to investigate the factors that have made some states more successful than others. I suggest that a complex set of historical, sociological, and political factors shape state formation and a country\'s international competitiveness; further international competitiveness itself shapes the ability to foster economic development. I argue that these factors determine the ways in which states and economies co - evolve. Additionally, since countries are embedded in a global system, an investigation of this co - evolution requires a very different theory of industrial organization and thus of international competition. Thus the state confronts a constrained autonomy in being able to obtain taxation revenue and foreign exchange so as to finance important developmental needs. Finally I conclude that the rationale for “bringing the state back in” has to not only critically examine the notion of “state failure” but also has to reject the notion of “market failure”.
Topic:
Development, Economics, Markets, and Foreign Direct Investment

464. Responsible business conduct: Re-shaping global business

Author:
John Evans
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD) is the Organisation's flagship instrument for responsible business conduct. The Guidelines provide non-binding recommendations to multinational enterprises (MNEs), drawn up and implemented by governments. Updated in 2011, they consist of principles and standards in such areas as sustainable development, governance, disclosure, human rights, employment and industrial relations, the environment, anti-corruption, consumer interests, and taxation. The 42 adhering governments are required to promote the Guidelines and to contribute to the resolution of issues arising under the Guidelines, including by setting up a complaints mechanism -- “National Contact Points” (NCPs) -- to which trade unions and non-governmental organizations (NGOs) are able to submit specific instances concerning alleged breaches of the Guidelines.
Topic:
Globalization, International Organization, International Political Economy, Markets, Foreign Direct Investment, and Governance

465. A China Round of Multilateral Trade Negotiations

Author:
Arvind Subramanian and Aaditya Mattoo
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Until recently, the World Trade Organization (WTO) has been an effective framework for cooperation because it has continually adapted to changing economic realities. The current Doha Agenda is an aberration because it does not reflect one of the biggest shifts in the international economic and trading system: the rise of China. Even though China will have a stake in maintaining trade openness, an initiative that builds on but redefines the Doha Agenda would anchor China more fully in the multilateral trading system. Such an initiative would have two pillars. First, a new negotiating agenda that would include the major issues of interest to China and its trading partners, and thus unleash the powerful reciprocal liberalization mechanism that has driven the WTO process to previous successes. Second, new restraints on bilateralism and regionalism that would help preserve incentives for maintaining the current broad non-discriminatory trading order.
Topic:
Economics, Globalization, International Trade and Finance, and Markets
Political Geography:
China and Israel

466. Applying Hubbert Curves and Linearization to Rock Phosphate

Author:
Cullen S. Hendrix
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Rock phosphate is a critical, nonrenewable resource for which there is no known substitute in agriculture. Cordell, Drangert, and White (2009) use Hubbert methodology (1956) to estimate the peak—the year after which production will monotonically decline—of world rock phosphate production at 2033–34. This note assesses the applicability of Hubbert's (1949) peak methodology to world rock phosphate production, based on (a) the ability of the model to produce accurate in-sample and out-of-sample forecasts and stable estimates of ultimately recoverable reserves, and (b) the degree to which the rock phosphate market approximates the theoretical conditions underpinning the Hubbert model. In both respects, the application of Hubbert methodology to rock phosphate is found to be problematic.
Topic:
Agriculture, Economics, International Trade and Finance, Markets, and Natural Resources

467. Oil Exporters to the Euro's Rescue?

Author:
Philip K. Verleger
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
When a boat springs a leak far from shore, it is customary for all hands to man the pumps—be they friends or enemies, passengers or crew. Every individual's survival depends on the actions of his or her compatriots. So it is with the global economy today.
Topic:
Debt, Markets, Oil, International Monetary Fund, and Financial Crisis
Political Geography:
Europe

468. Time for a Common European Effort on Raw Materials

Author:
Roderick Kefferpütz
Publication Date:
12-2011
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
At long last commodity prices have declined from their pre-summer highs. Many raw materials are now trading at significantly lower prices, giving temporary respite to industry. Red-hot copper, the bellwether of the metals sector, for example, has pulled back from its peak of $10,000 a tonne. Even the astronomical rise of the previously little-known rare earth elements has reversed.
Topic:
Economics, Markets, and Natural Resources
Political Geography:
Europe

469. Needing to Be Noticed: Understanding the Market in an Attention Economy

Author:
Anthony Olcott
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
Institute for the Study of Diplomacy, Edmund A. Walsh School of Foreign Service, Georgetown University
Abstract:
For this paper, I have decided to step through the proscenium and appeal directly across the “fourth wall” to whatever readers this piece may attract, in the hopes that someone among you will be able to help me figure out the answers to a set of questions with which I have been wrestling for several years. For fun, let's call this paper an exercise in crowd-sourcing.
Topic:
Foreign Policy, Diplomacy, Economics, International Trade and Finance, and Markets
Political Geography:
United States

470. Adjusting to China: A Challenge to the U.S. Manufacturing Sector

Author:
Martin Neil Baily
Publication Date:
01-2011
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
During an "exit interview" with the Wall Street Journal, departing National Economic Council Director Lawrence Summers argued that history would judge the United States based on how well we adjust to China's emergence as a great power, economically and politically. In the face of China's progress, America's manufacturing sector faces major challenges in becoming and remaining competitive and our choice of national economic policies will affect how well we meet those challenges. It is essential that the U.S. trade deficit not balloon as the economy recovers. There is scope to expand our exports in services and agriculture, but improving the competitiveness of U.S. manufacturing is vital.
Topic:
International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
United States, China, and America