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1611. Financialization, Trade, and Investment Agreements: Through the Looking Glass or Through the Realities of Income Distribution and Government Policy?

Author:
Alex Izurieta, Pierre Kohler, and Juan Pizarro
Publication Date:
09-2018
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
This paper assesses the effects of trade and investment agreements on income distribution and government policy. The critical process underpinning these effects is the rise of ‘financialization’. Global patterns of greater financialization and of worsening functional income distribution as well as tighter fiscal stances are identified in the data. Tests are conducted by combining financial statistics with databases of bilateral investment agreements and free trade agreements, as well as data generated by the UN Global Policy Model that encompasses several fiscal policy instruments. The empirical validation of these relationships brings to the fore the policy-oriented debate about the purported benefits of modern-era ‘comprehensive’ trade and investment agreements such as TTIP, TTP and CETA. The authors corroborate the findings of their respective earlier studies of these agreements and reiterate their call for caution. To preserve policy space and to avert increases of inequality, policy-makers should resist pressures to get their economies locked in such agreements and should look instead for sustainable forms of international policy coordination.
Topic:
International Cooperation, United Nations, Investment, and Trade
Political Geography:
Global Focus

1612. Do Trade and Investment (Agreements) Foster Development or Inequality?

Author:
Pierre Kohler and Francis Cripps
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
This paper proposes to revisit the debate on trade and investment agreements (TIAs), development and inequality, looking at the role of Global Value Chains (GVCs) and trans- national corporations (TNCs). It first presents stylized facts about trade and investment (agreements), declining global economic growth and rising inequality under the latest round of globalization. It then provides a long-run perspective on the mixed blessings of external opening, summarizing some key contributions of the mainstream literature, which are converging with long-standing research findings of more heterodox economists, and the eroding consensus today. Based on this stock-taking, it takes a fresh critical look at the TIAs-GVCs-TNCs nexus and their impact. Using data on value-added in trade and new firm-level data from the consolidated financial statements of the top 2000 TNCs going back to 1995, it examines whether the fragmentation of production along GVCs led to positive structural change or rather stimulated unsustainable trends in extractive and FIRE sectors. It then turns to the role of TNC-driven GVCs as a vehicle for economic concentration. Finally, it presents evidence linking TIAs and their correlates to rising inequality. Key findings include the fact that the ratio of top 2000 TNCs profits over revenues increased by 58 percent between 1995 and 2015. Moreover, the rise in top 2000 TNCs profits accounts for 69 percent of the 2.5 percentage points decline in the global labour income share between 1995 and 2015, with the correlation coefficient between annual changes in both variables as high as 0.82. The paper concludes by calling for a less ideological policy debate on TIAs, which acknowledges the mixed blessings of external financial and trade opening, especially their negative distributional impact and destabilizing macro-financial feedback effects, which both call for policy intervention. As an alternative to short-sighted protectionism, it further discusses possible options for anticipating undesirable effects arising from TIAs (e.g. rising carbon emissions, economic instability, inequality, etc.) and addressing those in TIAs themselves.
Topic:
Inequality, Investment, Trade, and transnationalism
Political Geography:
Global Focus

1613. Industrial Policy 4.0 Promoting Transformation in the Digital Economy

Author:
Padmashree Gehl Sampath
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
The rise of the fourth industrial revolution (IR) is deeply embedded in a wider context of privatization of knowledge, rising costs of innovation and uneven distribution of capacity between countries. But debates on a ‘balanced’ policy framework to tackle these issues have until now floundered to address some of the fundamental dilemmas of our times. Will the fourth IR render the manufacturing-led model of economic development a thing of the past? Are there new boundaries for innovation and industry in the fourth IR? What should policy do in such an uncertain technological era? This paper addresses these crucial questions and makes a case for comprehensive digital industrial policies that are differentiated and rooted in the broader reality of development and globalization in the fourth IR. The paper maps the new boundaries for innovation and industrialization, after which, it elaborates in detail the market and institution failures in the platform economy that arise from the highly complex nature of technological change and a lack of effective policy oversight. It offers evidence to the effect that although manufacturing as we knew it – with its effects on low and unskilled labour and employment creation - might not continue to exist, it will continue to thrive using high technology skills and R&D, within a new model of industrialization where the knowledge-component of all sectors – agriculture, manufacturing and services – will be on the rise. Countries therefore, need a more nuanced and differentiated industrial policy 4.0 framework that can: (a) sustain overall industrial performance, (b) in a way that helps close the gap to the frontier in a constantly evolving technological landscape, (c) while mitigating the adverse consequences for society, in terms of employment, privacy and latent social fabric. The paper proposes the components of such an industrial policy 4.0 in detail in its concluding section.
Topic:
Industrial Policy, Science and Technology, Employment, and Digital Economy
Political Geography:
Global Focus

1614. Green growth and its global-local meanings – Insights from Morocco

Author:
Cengiz Günay, Sherin Gharib, and Christian Haddad
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Austrian Institute for International Affairs (OIIP)
Abstract:
Energy transition towards renewable energy sources (RES) has been a high priority for many industrial as well as developing countries. Besides its positive effects on the ambitions to mitigate climate change, energy transition has been also seen as a mean to increase energy independence and energy security. While some countries have been particularly successful in developing and deploying energy transition solutions (including technologies and governance models) others are at the beginnings. Particularly in developing countries there is growing interest in the transfer of RES solutions as they are often considered to be drivers for modernization and socio-economic development (Romer 1990; Gruber et al. 2017). The transfer of RES technologies, which includes not only turnkey power stations but also the transfer of the governance models, needed for successful implementation of technology in the hosting society and its long-term usage with as little impacts as possible on local communities and benefits for hosting countries at the same time, is considered a key in facilitating climate change mitigation efforts around the globe (Karakosta et al. 2010; Metz et al. 2000). In 2009, Morocco initiated an ambitious energy transition program. The goal is to cover 42 percent of its power generating capacity with RES by 2020 and to increase this to 52 percent by 2030 (RES Med). Moroc-co’s ambitious plans are often highlighted by various organizations in the international context as a model for deployment of RES in developing countries (Gruber et al. 2017). The country’s energy transition strategy mainly focuses on the construction of large and middle-size centralized solar energy plants. The largest project are the so called “Noor” (light) plants, a number of large and medium scale solar plants to be constructed across the country until 2020. The Noor plants are hoped to increase Morocco’s energy production, decrease the country’s dependence on fossil imports and even enable the export of energy to European and African neighbors. In turn, effects on electricity prices in Morocco are expected to remain low. Despite a clear preference for rather centralized energy solutions, mainly the result of state planning in the capital Rabat, the Moroccan state’s ambition of inducing “Green Growth” has also had effects on the regional, provincial and local levels. Many associations and initiatives defending, promoting and lobbying for climate change mitigation and renewable energy solutions have emerged at the local level. Green Growth and Morocco’s aims at de-centralizing the state’s administrative structure have opened new spaces for participation. Similar to Morocco, Austria has also developed ambitious plans for transition to climate friendly energy productions. The long-term vision is to reach 100 percent independence from fossil energy. In 2009, the so called Climate and Energy Model Regions (CEM) were established. The governance concept of Climate and Energy Model Regions (CEM) aims at promoting energy transition at the regional and local levels. Each CEM pursues the goal of becoming independent from fossil fuels by 2050 and thereby contributes to the overall national climate goals. The decentralization of climate goals, linking energy transition with regional development has reflected the country’s federal administrative and political structure. In that regard, this governance model represents a best practice for a decentralized policy approach to climate mitigation goals. As much as this often entails strong involvement and ownership on societal level, as much its success is dependent on a complex set of diverse political entrepreneurs on different political and administrative levels (national-federal-district and local). Most of the energy relevant issues are regulated by federal law, but the federal states are highly involved in the specification and implementation of these laws. The country’s energy strategy and measures for the reduction of emissions (including investments in renewables) are elaborated in collaboration between the federal government and the federal states. The measures taken are brought in line with the climate and energy package issued by the EU in 2008 which sets besides the promotion of renewables and the increase in energy efficiency the goal to reduce emissions until 2020 by 20 % (compared to 1990). This working paper builds on the insights gained from the LINKS project. LINKS (Linking climate change mitigation, energy security and regional development in climate and energy model regions in Austria) identified structural differences among the Austrian Climate Model Regions (urban, semi-urban and rural), human factors such as the willingness to use RES and to pay for them, as well as differing public acceptance and participatory governance measures. As a result, the two Austrian CEM regions of Güssing and Freistadt were determined as potential models to be transferred to Tata. These two CEMs illustrate the two opposite poles of different governance rationales. While the establishment of a CEM in Güssing was mainly initiated by the former mayor in a top-down process and enjoyed strong political support on the national and regional levels, Freistadt represents a bottom-up approach which has been located at the grassroots level and is informed by more participatory and flat governance structures. The overall objective of our work package was to assessing the transferability of these insights to different socio-political environments, such as Morocco’s Tata region. To do so, the working paper explores the visions and different notions of “green growth”. Moreover, it is concerned with the forms of participation of different stakeholders (including official authorities) in the making of renewable energy in a remote area of Morocco. Situated in the coun- try’s southeast, Tata has been designated as the location of one of the Noor solar plants. It analyzes the meanings produced in general discourses on energy policy in Tata and puts them into context with the political, territorial and economic orders that shape opportunity structures. Based on interviews, talks, a stakeholder forum and a focus group discussion, the paper identifies three threads of discourses and three perspectives on the Moroccan orders. This working paper was produced in the framework of LINKS Project, funded by the Austrian Climate and Energy Fund.
Topic:
Climate Change, Economic growth, Renewable Energy, and Transition
Political Geography:
North Africa and Morocco

1615. When Civil Resistance Succeeds: Building Democracy After Popular Nonviolent Uprisings

Author:
Jonathan Pinckney
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
International Center on Nonviolent Conflict (ICNC)
Abstract:
Why do some nonviolent revolutions lead to successful democratization while others fail to consolidate democratic change? And what can activists do to push toward a victory over dictatorship that results in long-term political freedom? Several studies show that nonviolent revolutions are generally a more positive force for democratization than violent revolutions and top-down political transitions. However, some nonviolent revolutions, such as the Arab Spring revolution in Egypt, do not seem to fi t this pattern. This study takes on this puzzle and reveals that the answer lies in large part in the actions of civil society prior to and during transition. Democracy is most likely when activists can keep their social bases mobilized for positive political change while directing that mobilization toward building new political institutions.
Topic:
Civil Society, Democracy, Resistance, and Nonviolence
Political Geography:
Global Focus

1616. Comparative Political Economy and Varieties of Macroeconomics

Author:
Lucio Baccaro and Jonas Pontusson
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper provides a historical overview of comparative political economy as an interdisci- plinary field of study anchored in political science and focused on advanced capitalist states. We argue that this field of inquiry has reached an impasse and that a more sustained engage- ment with macroeconomics provides a way forward. Against this backdrop, we review two distinct traditions of macroeconomics – New Keynesian and Post-Keynesian macroeco- nomics – and discuss their relative merits as vehicles for renewing the research agenda of comparative political economy.
Topic:
Capitalism, Macroeconomics, and Keynes
Political Geography:
Global Focus

1617. European Social Policy: Progressive Regression

Author:
Wolfgang Streeck
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
European social policy changed with the evolution of European and global capitalism, the scope and shape of European-level international institutions, the size and heterogeneity of “Europe” as a polity, and the politics of the European national welfare state. The paper outlines the long-term trajectory of European social policy, from the intended absorption of national welfare states into one united, federal welfare state to a selective updating of national social policies by European social policies; to multi-level coordination of national systems by special European institutions; to European soft law helping national “modern- ization” on the “Third Way”; to exposure of national systems to international economic competition as an incentive for “structural reform”; and to subordination of social policy, national and European, to the defense of a common hard currency through fiscal consoli- dation – from, in other words, federal social democracy to competitive “adjustment” of national social protection and social life to global markets.
Topic:
Reform, Capitalism, Political structure, Social Policy, Welfare, and Integration
Political Geography:
Europe

1618. Responsibility Sharing for Large Movements of Refugees and Migrants in Need of Protection

Author:
CMS
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Center for Migration Studies of New York
Abstract:
The 2017 International Migration Policy Report is the first in an expected series of annual reports on international migration policy and refugee protection by the global network of think tanks or study centers founded by the Congregation of the Missionaries of St. Charles – Scalabrinians. These institutions are members of the Scalabrini International Migration Network (SIMN). The Scalabrini migration study centers consist of the Center for Migration Studies of New York (CMS) in the United States, the Scalabrini Migration Center (SMC) in the Philippines, the Scalabrini Institute for Human Mobility in Africa (SIHMA) in South Africa, the Centro de Estudios Migratorios Latinoamericanos (CEMLA) in Argentina, the Centro de Estudios Migratorios (CEM) in Brazil, the Centre d’Information et d’Études sur les Migrations Internationales (CIEMI) in France, and the Centro Studi Emigrazione Roma (CSER) in Italy. The purpose of these reports will be to focus on pressing global migration and refugee protection challenges in all parts of the world and to offer policy suggestions to address them.
Topic:
International Affairs
Political Geography:
Global Focus

1619. Global Debt Dynamics: What Has Gone Wrong

Author:
Andreas Antoniades and Stephany Griffith-Jones
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
This paper analyses the nature and characteristics of global debt dynamics in the post global financial crisis (GFC) period. First, we attempt to map the ways in which debt has been moving from sector to sector, and from one group of countries to another within the global economy. By capturing this inter-sectorial, inter-national, inter-regional movements of global debt we aspire to contribute to a more comprehensive understanding of global debt and its mode of operation. Second, we attempt to analyse what is wrong with global debt dynamics, i.e. we examine the broken link between what global debt was supposed to do and what it does. Here, we point to three interrelated dynamics: the accumulation of unproductive debt, growing inequalities of income and wealth, and the increase in privately-created, interest-bearing money.
Topic:
Debt, Economics, Global Recession, Financial Crisis, and Global Political Economy
Political Geography:
United States, Global Focus, and Global Markets

1620. The ebbing of the Pink Tide or permanent underdevelopment? Dependency theory meets uneven and combined development

Author:
Felipe Antunes de Oliveira
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Centre for Global Political Economy, University of Sussex
Abstract:
Latin America is once again passing through a crisis. After initially showing promising results, the neodevelopmentalist strategy adopted in Brazil and Argentina has reached its limits. The attempt at 21st century socialism in Venezuela derailed, tearing the country apart. Finally, the neoliberal path dutifully followed by Mexico, Chile, Colombia and smaller countries perpetuated social inequalities, and is now menaced by President Trump's protectionist turn. The current Latin American crisis goes much beyond the reversion of the so-called "Pink Tide". It affects all ideological colours, raising again an old theoretical-political question that stood in the core of dependency theory: is development even possible in Latin America? The key to answer this question – a concept of development that captures non-converging transformation – was not available to Frank, Marini, Bambirra and Dos Santos, among other dependency theorists. Too easily conflating development with catching-up, they reached a dead end. Indeed, as they could see, Latin America was constantly changing, but not in the expected ways. In this paper, I suggest that the concept of uneven and combined development allows for a renewed engagement with dependency theory's core problem, by representing mixed forms of development as the norm, not the exception.
Topic:
Debt, Development, Economics, International Development, and Economic growth
Political Geography:
Brazil, Colombia, Latin America, Venezuela, Mexico, and Chile