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1771. Global Monetary Policy Divergence and the Reemergence of Global Imbalances

Author:
Daniel Gros
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Developed economies are paying remarkably little attention to coordinating their monetary policies. This is an unavoidable consequence of the independence of central banks, which faithfully follow their purely domestic mandates except in times of crisis. As a result, global monetary policies have reached unprecedented levels of divergence. This divergence is set to widen—primarily due to differences in the relative strength of labor markets—while global current account imbalances return. Meanwhile, exchange rates have not reacted as economists expected; the dollar has weakened even as policy rates have increased. Economic tensions will likely become more disruptive the longer global imbalances go uncorrected. Likewise, the global economy will become more vulnerable to shocks. Yet by focusing on bilateral trade imbalances, the United States has mistakenly singled out China when the global imbalances between the United States and the eurozone is the more critical issue. The growing global imbalances are reflected more in the eurozone current account surplus and U.S. fiscal policy than in China’s shrinking surplus.
Topic:
International Trade and Finance, Monetary Policy, Exchange Rate Policy, and Economic Inequality
Political Geography:
Global Focus

1772. Managing Global Disorder: Prospects for Transatlantic Cooperation

Author:
Council on Foreign Relations
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Despite recent turbulence in the transatlantic relationship, the United States and the European Union share a common interest in managing emerging sources of global disorder. To explore prospects for and challenges to transatlantic cooperation, the Center for Preventive Action at the Council on Foreign Relations convened an international group of twenty-three experts at the Tufts University Center in Talloires, France, on July 12–13, 2018, for the workshop “Managing Global Disorder: Prospects for Transatlantic Cooperation.” The workshop is the third in a series of meetings supported by the Carnegie Corporation of New York. It is premised on the belief that the United States, China, the European Union, and Russia not only share a common interest in preventing the world from becoming more dangerous and disorderly, but also that the nature and scope of this task necessitates cooperation among them. Workshop participants discussed their perceptions of the growing sources of disorder in the world, examined areas of strategic cooperation, and explored where the United States and the European Union might work together to address a variety of regional concerns emanating from Africa, China, the Middle East, and Russia. While highlighting how the two can work together to address increasing political instability and violent conflict, participants also cited the importance of the transatlantic relationship in preventing or mitigating the demise of the liberal international order.
Topic:
Foreign Policy, International Cooperation, European Union, and Transatlantic Relations
Political Geography:
United States, Europe, North America, and Atlantic Ocean

1773. Global Governance to Combat Illicit Financial Flows

Author:
Council on Foreign Relations
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
International efforts to curb illicit financial flows (IFFs) resemble post–Cold War collaboration in other issue areas that have risen on the global agenda: climate change, global health, internet govern- ance, and cybersecurity. Nongovernmental actors, including private corporations and nongovern- mental organizations (NGOs), have often driven agenda-setting in those domains. The focus has shifted over time, as new issues have been added and as older issues have assumed renewed im- portance. That reshaped agenda has in turn affected the institutional ecosystem of global action, which is captured only in part by formal and informal intergovernmental institutions. These new is- sue areas are characterized not by a single dominant institution or core set of institutions but by mul- tiple clusters of institutions that have each claimed a segment of the agenda and the instruments of cooperation. The result is a fragmented landscape with disjointed actors and organizations that often compete, collaborate, and act in parallel in pursuing their collective ends.1 The term of art for such an institutional landscape, one with several institutional or legal founda- tions, is “regime complex.”1 The regime complex for combating IFFs differs in its complexity from other, similar issue areas. Defining IFFs produces disagreement among researchers, activists, and policymakers. “Illicit” captures a normative judgment perhaps broader than “illegal.” For law en- forcement, IFFs are framed by predicate crimes, activities that are illegal in one jurisdiction or anoth- er and often of greater interest to authorities than IFFs. For those interested in broader global out- comes, such as the effects of IFFs on economic development, “illicit” could include cross-border fi- nancial flows associated with activities that they believe should be forbidden, such as tax avoidance by multinational corporations (MNCs). Those activities may not be illegal, however.2 These categories shift over time: bribery of foreign officials by corporations based in Organization for Economic Co- operation and Development (OECD) countries was made illegal in the United States well before it was criminalized in other industrialized countries. Variations in national treatment of both IFFs of certain kinds and the underlying predicate crimes have made harmonization of national policies and their implementation in many IFF domains difficult. IFFs are also one of the most important features of globalization’s dark side. Unlike other illicit or dangerous cross-border flows, however, IFFs bear almost no markers in and of themselves: pecunia non olet. Tainted food, endangered species, and dangerous individuals all present fewer problems of identification. For IFFs, it is suspicious activity rather than a characteristic of the funds themselves that generates the attention of those attempting to curb the flows. These definitional and identification problems make measuring the effectiveness of counter-IFF policies more difficult than assessing the effectiveness of policies in other issue areas. As many skep- tics and critics have pointed out, without a clear grasp of the scale of underlying flows, the scale of effects, though perhaps not the direction, of policies to counter those flows cannot reliably be deter- mined.3 If the costs of enforcement and compliance or unintended negative effects are included in estimates, the balance sheet becomes even more uncertain. International collaboration to curb IFFs and domestic measures to support that collaboration are directed to a wide array of predicate crimes that produce IFFs (drug trafficking, terrorism, or tax eva- sion) or to negative externalities (global “bads,” such as corruption) that both support IFFs and are sustained and promoted by them. This diversity of IFF sources and effects, and the public policy goals that follow, mobilize an unusually large number of actors: law enforcement agencies, financial super- visors and ministries, private financial institutions, and NGOs. These actors are interested more in certain IFFs and predicate crimes than in others. The links between specific crimes or categories of crime and larger global outcomes of interest, whether economic development or international securi- ty, are often second or third order. As a result, political attention to these issues—and willingness to bear the costs of implementation—fluctuates over time and across jurisdictions. As Peter Reuter and Edwin M. Truman observed in their classic 2004 account, the anti–money laundering (AML) regime (a subset of the complex countering IFFs) “reflects shifting priorities, compromises, and trade-offs.”4 This variation over time is particularly important in combating IFFs, because enforcement depends largely on national governments and both their incentives and their capacity to enact anti-IFF poli- cies. Financial markets and naming-and-shaming campaigns can strengthen those national efforts; they can also direct attention and effort against particular IFFs. However, they cannot substitute en- tirely for government action. What follows is a summary and introduction to organized international efforts to combat IFFs. In order to limit the policy universe, the narrower definition of IFFs used by the World Bank—“money illegally earned, transferred, or used that crosses borders”—will be used to define the wider interna- tional regime complex to combat IFFs.5 Mapping the institutions and actors involved in this issue area over time will capture the evolution of the global IFF agenda and the politics surrounding its de- velopment and implementation.
Topic:
International Trade and Finance, Governance, Institutionalism, and Illegal Trade
Political Geography:
Global Focus

1774. Women and the Law

Author:
Council on Foreign Relations
Publication Date:
10-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
The connection between women’s economic participation and global prosperity is undeniable. Over the past two decades, international organizations and world leaders have increasingly recognized how critical women’s economic empowerment and financial inclusion are to economic prosperity and growth. Analyses from the International Monetary Fund (IMF), Organization for Economic Cooperation and Development, the World Bank, and other leading institutions demon- strate the growth potential of women’s increased economic partici- pation. UN frameworks such as the Sustainable Development Goals recognize the relationship between economic opportunity for women and development, and include time-bound targets—such as equal access to financial services, natural resources, and technology, and equality in property ownership and inheritance—to advance women’s economic participation. However, despite growing awareness that women’s economic empowerment is critical to women, their families, and broader eco- nomic prosperity, many countries still legally undermine women’s economic participation and undervalue women’s work. Of the 189 economies surveyed in the World Bank’s Women, Business and the Law 2018 report, 90 percent have at least one regulation that impedes wom- en’s economic opportunities. More than one hundred economies still prevent women from working in certain jobs; fifty-nine economies provide no legal recourse to women who experience sexual harassment in the workplace; and in eighteen countries, men can legally prevent their wives from working outside the home. An array of other legal barriers—from limitations on access to finance to laws restricting women’s agency and mobility—prevent women from fully participat- ing in the economy. Even in 2018, the legal landscape for women in the economy fails to reflect the value women’s participation adds to eco- nomic growth. But change is on the horizon. Over the last decade, several countries have enacted legal reforms that significantly advance women’s rights. Today, all but thirty-two countries legally guarantee gender equality in their constitutions, and a record number of countries now have laws prohibiting discrimina- tion or violence against women. While these gains—rightfully cel- ebrated—show that progress is possible, proposals to eliminate the critical barriers that limit women’s economic potential remain absent from mainstream discussions on international and national economic policy, and barriers to female economic enfranchisement persist in every region of the world. In order to realize the economic potential of 50 percent of the world’s population, nations need to do more to level the legal playing field for women. This volume collects in-depth analysis and commen- tary on legal barriers to women’s economic participation, with a focus on five areas in which the greatest obstacles to women’s economic par- ticipation endure: financial inclusion, identification laws, land rights, workplace discrimination, and family law. In the opening essay, I make the economic case for eliminating legal barriers that inhibit women’s economic participation. Closing gender gaps in the workplace could add an estimated $12 trillion to the global economy. Countries simply cannot afford to waste this economic poten- tial—and governments from Saudi Arabia to Japan are taking notice and enacting policies to promote women’s workforce participation. A web of discriminatory laws impedes women’s access to financial services and undermines their capacity to borrow, save, or obtain insur- ance. In an essay on financial inclusion, Council on Foreign Relations (CFR) Senior Fellow Jamille Bigio highlights how banks stand to ben- efit economically by ensuring women’s access to and use of financial services, by sharing the experience of a Nigerian woman who employed digital tools to save for her daughter’s school fees. CFR Senior Fellow Gayle Tzemach Lemmon, reporting on a successful financial inclusion program in Tanzania, explores how education can help women over- come legal and social barriers to opening bank accounts. The economic case for legal reform to promote women’s financial inclusion is strong: when women can use financial services without spousal consent and have control over where they live, and when unpaid work is recognized in marital property regimes, gender gaps in financial inclusion are nar- rowed. Legal reform needs to be a central component of any strategy to advance women’s access to and use of savings, credit, and insurance.
Topic:
Gender Issues, Women, Feminism, and Participation
Political Geography:
Global Focus

1775. Arctic Governance

Author:
Zhao Long
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Over the past few decades, climate change and globalization have dramatically transformed the Arctic. As a result of global warming, the Arctic sea ice has been melting rapidly, potentially easing access to natural resources and opening up new maritime routes in the region. These changes have increased global attention on potential commercial opportunities, research, and peace and stability in the region. As national governments, international institutions, and nonstate actors explore different approaches to Arctic governance, a cohesive regime complex—a set of functionally specific regimes that together serve as a foundation for efficient governance—that integrates existing frameworks could help address the environmental, economic, sociocultural, and geopolitical challenges this region faces. The recent transformation of the Arctic is driven largely by sea ice melting at an accelerated rate. Between 1979 and 2015, the Arctic sea ice extent—the surface area of the ocean covered by sea ice—decreased by 4.7 percent per decade and the thickness of sea ice dwindled by 10 to 15 percent. Even if global temperature rises by less than 2 degrees Celsius above pre-industrial levels, the Arctic could see a sea ice–free summer at least once a decade. Decreased sea ice allows for additional human activity in the Arctic; this in turn exacerbates the damage to the Arctic ecosystem. Decreasing sea ice and permafrost—as a result of which more fresh water enters the Arctic Ocean—can change weather and climate conditions in other parts of the globe.
Topic:
Climate Change, Environment, International Cooperation, and Governance
Political Geography:
Arctic

1776. Advancing Natural Gas Reform in Ukraine

Author:
Sagatom Saha and Ilya Zaslavskiy
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
A prerequisite for Ukraine’s economic and political success is reform of its energy sector. Enduring corruption and mismanagement in the energy sector have generated pernicious budget deficits, eroded sovereignty, jeopardized energy security, and limited economic potential. Although all post-Soviet states have encountered obstacles in transitioning to market economies, Ukraine has been remarkably slow to introduce market reforms, and its sclerotic energy sector is at the center of its economic dys- function. Even after the fall of the Soviet Union, the Orange Revolution, and nine International Mon- etary Fund (IMF) loans conditional on reform, Ukraine’s energy sector remains a drain on taxpayers, a playground for corrupt oligarchs, and an unattractive destination for international investment. However, Ukraine now has a small but important window of opportunity. The 2014 Euromaidan Revolution—the series of pro-European demonstrations that culminated in Ukrainian President Viktor Yanukovych’s removal—provided a mandate and framework for energy reform. Beginning in 2015, Ukraine moved to cut implicit subsidies on natural gas, adopted laws to restructure the state-owned oil and gas company Naftogaz, and halted imports of Russian gas. These advances are welcome news not only for Ukraine, but also for the United States. A prosper- ous and energy-secure Ukraine, capable of standing up to Russian interventionism, would advance U.S. foreign policy objectives in the region. Recognizing this, Washington already provides technical, financial, and military assistance to Kiev.1 The United States has focused particularly on encouraging Ukraine’s energy-sector reforms, last year tasking the State Department with promoting the country’s energy security with the Countering America’s Adversaries Through Sanctions Act. Unfortunately, Ukraine’s energy-sector reforms to date do not go far enough. To achieve lasting reform, Ukraine must curtail its population-wide subsidies, reinforce the independence of its energy regulator, and dismantle the monopolies that exist in every segment of the natural gas sector. The benefits that would result from these steps are manifold. End consumers would enjoy better energy services and lower prices; the domestic energy sector would create high-skilled jobs and boost eco- nomic output; and the government would secure new revenue streams that could bolster national priorities such as defense and social services. Further reforms in Ukraine’s energy sector could mean the difference between economic growth at the current sluggish rate of 2 percent and reaching 6 percent or more, which some experts suggest is possible.2 Ultimately, Ukraine will be the arbiter of its own success in energy-sector reform. But the United States can and should do more to help it achieve politically and technically complex reforms. Apply- ing greater diplomatic pressure, providing technical assistance, and offering targeted financial in- centives—and disincentives—could speed the pace of Ukraine’s reform efforts. The Donald J. Trump administration, which has not yet articulated a clear strategy toward the country, should place energy-sector reform at the center of its relationship with Ukraine. Doing so would constitute a low-risk, high-reward strategy for Washington to counter Moscow’s influence at the North Atlan- tic Treaty Organization (NATO) border without overcommitting to military options and antagoniz- ing Russia. Moreover, by helping Ukraine reform its energy sector, the Trump administration may create opportunities for trade in energy equipment and services, advancing its strategy of U.S. en- ergy dominance.
Topic:
Energy Policy, Natural Resources, Reform, and Gas
Political Geography:
Europe, Ukraine, and Eastern Europe

1777. The Links Between Immigration, Migration and Human Trafficking

Author:
Joey White
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Center on Human Rights Education, University of Denver
Abstract:
Our sister organization, Human Trafficking Center (HTC) are the experts on the matter of human trafficking and use academic rigor, sound methodology, and reliable data to promote understanding of human trafficking and its causes, conditions, and cures. In a recent blog, HTC defines the connection between trafficking and migration: “Trafficking is migration gone terribly wrong.” – David Feingold. These words given by David Feingold in his piece Trafficking in Numbers: The Social Construction of Human Trafficking Data give a whole new insight into what human trafficking is, what realms human trafficking occurs within, and how human trafficking happens. Indeed, human trafficking and migration are inextricably linked. Human trafficking is heavily influenced by migration. Any policies regarding one have a tremendous effect on the other. This is why it is so vital to examine immigration policies and take into account what impacts they will have in the anti-trafficking sphere, particularly in today’s political climate.”
Topic:
Human Rights, Migration, Immigrants, and Human Trafficking
Political Geography:
Global Focus

1778. The Connection Between Homelessness, Immigration, and Displacement

Author:
Cat Galley
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Center on Human Rights Education, University of Denver
Abstract:
This year, The Center on Human Rights Education chose the theme of DISPLACEMENT to investigate and research in the context of human rights. To begin under this theme, we began with homelessness and evolved into immigration. We focused on homelessness in the context of the Denver-metro area and the state of Colorado. Immigration held a national focus during the winter quarter. In the spring, COHRE will investigate into the topic of refugees and displacement. Throughout the Fall Quarter, the connections between displacement and homelessness came to be understood. On a more national scale, in 2013, there were approximately 610,042 homeless individuals. This number includes US citizens, immigrants, and refugees.
Topic:
Human Rights, Immigrants, Displacement, and Homelessness
Political Geography:
Global Focus

1779. Competitiveness-of ACP Sugar Exports in Global Markets

Author:
Tebogo Seleka and Thula Dlamini
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
We employ the Normalized Revealed Comparative Advantage (NRCA) index on data for the period 1961-2013 to examine the competitiveness of the African, Caribbean and Pacific (ACP) countries in the global sugar market. Results indicate that the majority of the ACP states had comparative advantage in the global sugar market during the period 1961-2013. However, most of these countries also experienced declining comparative advantage, except for a few African countries that emerged from initial states of extreme comparative disadvantage to marginal comparative (dis)advantage. This occurred despite the fact that these countries enjoyed tariff free access to the highly protected EU market. Mauritius, followed by Fiji, Guyana and Jamaica, recorded the strongest comparative advantage among the ACP countries. However, it recorded weaker comparative advantage than the leading comparator non-ACP countries of Australia, Brazil and Thailand, which experienced considerable increases in comparative advantage over the considered period. Overall, there has been convergence in comparative advantage among ACP states since the signing of the Lomé convention in 1975.
Topic:
Development, Economics, Exports, Macroeconomics, and Economic Development
Political Geography:
Africa and Botswana

1780. Public Policy Implementation Prospects and Challenges-in Botswana : A Case of the National Policy on Care for People with Disabilities

Author:
Marumo Omotoye
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
People with disabilities (PWDs) are often subjected to economic and social exclusion. This paper assesses factors that contribute to, and/or hinder the implementation of Botswana’s national disability policy. Despite the Government of Botswana’s efforts to uplift marginalised and vulnerable groups, PWDs remain disenfranchised as a result of social, physical and legislative barriers. Data was collected from secondary data sources and analysed using thematic analysis. The Analysis of Determinants of Policy Impact (ADEPT) approach, which aims to explain and influence policy development and policy impact implementation with four determinants: goals, obligations, resources and opportunities, was adopted. The study’s findings show that 22 years after its adoption, the National Policy on Care for People with Disabilities has not resulted in the desired policy outcomes, let alone achieved its objective of improving the lives of people with disabilities. While the Policy has the potential to be an important tool in achieving social inclusion and protecting the rights of PWDs, implementation gaps remain, essentially limiting its effectiveness.
Topic:
Disability and Public Policy
Political Geography:
Africa and Botswana