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1. The reverse home market effect in exports: A cross-country study of the extensive margin of exports

Author:
Medin Hege
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This paper presents a simple new trade theory model with results that contradict those from standard model. A home market effect in domestic sales of manufactured goods is found to co-exist with a reversed home market effect in exports of manufactured goods. In consequence, for a small country the number of manufacturing firms that sell in the domestic market is lower than proportional whereas the number of exporters is higher than proportional to country size. The proportion of firms that export, decreases with relative size of the home market. Empirical support for the latter prediction is found in a cross-sectional dataset on firm level exports for 116 countries.
Topic:
International Relations, Economics, International Political Economy, and International Trade and Finance

2. Regional Trade Agreements in East Asia

Author:
Innwon Park
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Both intra - and inter-regional trade agreements are proliferating in East Asia. Deepening regional interdependence through trade and investment, and the necessity for stability and revitalization of the regional economy since the East Asian financial crisis in the late 1990s led the East Asian countries to adopt discriminatory RTAs. Accordingly, East Asian commercial policy stance has shifted from unilateral to bilateral to mega-lateral liberalization. This report attempts to assess the East Asian countries' efforts to liberalize the regional market by cooperating with each other. We investigate (i) why RTAs have been proliferating in East Asia, (ii) what the main characteristics of East Asian RTAs are, (iii) whether the East Asian countries are natural trading partners for each other to enhance welfare gains from RTAs, and (iv) whither East Asian RTAs. From our analysis, we recommend following policy options. First, East Asian RTAs should follow an expansionary RTA path (for example, AFTA and five ASEAN+1 FTAs → RCEP and/or TPP → FTAAP). Second, as we consider the high dependence on external economies through global trade and investment, East Asia needs to cooperate with major external trading partners by forming cross-regional RTAs with the EU and US. Third, in order to enable East Asian economies to take the more desirable expansionary RTA path, harmonizing or simplifying ROO, the cumulation of value contents among the RTA members in East Asia, and enhancing trade facilitation should be a prerequisite considering the complicated web of RTAs, regional production networks, and the consolidation of the FTAAP.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
East Asia and Asia

3. The governance of global value chains for live butterflies

Author:
Rich Karl, Magda Rich, and P.G. Chengappa
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Despite estimates that the global butterfly trade generates over US$100 million annually in sales of pupae for exhibitions and deadstock for a range of collector and artisanal uses, almost no research has been conducted that unpacks the dynamics of these value chains. This paper remedies this gap by highlighting the governance structure of the value chain, with important implications on the benefits for chain participants, upgrading strategies, sectoral sustainability, and the potential for new market entrants. This research on live butterfly chains reveals the fragility of current modes of economic organization that promote overproduction as threatening the long-term viability for the industry as a whole. The authors propose an alternative governance model based on the use of individually transferrable quotas, or ITQs, as a means of improving the performance of certain butterfly value chains.
Topic:
Economics, Government, International Trade and Finance, and Governance

4. Improving livelihoods through conservation and education

Author:
Rich Karl, Magda Rich, Ganga Changappa, and Babu Raghavan
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
In many parts of the developing world, those with physical or mental handicaps are often considered to be a burden on society, with limited to no remunerative activities available in the workforce. Activities such as butterfly farming, which require precision and attention to detail, are potentially relevant for disadvantaged groups as a source of livelihoods. At the same time, such activities can be integrated with community-led conservation efforts as well. We provide a case study of the development of a butterfly garden at the Swastha Centre for Special Education and Rehabilitation in the Kodagu area of Coorg, a region in the state of Karnataka in India through which conservation-based activities are integrated with special education in a manner than builds skills, improves livelihoods, and serves as an important resource for environmental education. Our case demonstrates a scalable means by which butterflies can be used to educate, improve the environment, and offer livelihoods to the disadvantaged in a country where such opportunities are greatly needed.
Topic:
Economics, Education, Environment, and Governance
Political Geography:
India and Karnataka

5. Sustainability Coffee Certification in India

Author:
Rich Karl, Magda Rich, P.G. Chengappa, Arun Muniyappa, Yadava C.G, Ganashruthi M.K., Pradeepa Babu B.N., and Shubha Y.C.
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Certification programs has been employed in many agricultural products as a means to encourage and communicate compliance with standards associated with various attributes, such as organic, fair-trade, GMO free, and eco-friendly, among others. Such programs further seek to provide added value, through a price premium, to producers and supply chain actors associated with the label. In this paper, we review a number of global labeling and certification programs that could add value for coffee farms in India through the promotion of conservation and environmental protection. We provide results from a survey conducted on a sample of coffee farms in Coorg district, India to assess their awareness and perceptions related towards certified coffee and environmental conservation in general. Survey results illustrate strong positive associations with the environment by coffee planters, particularly among certified and organic producers. However, price premiums for certified and organic coffee are relatively small. While the potential of conservation-oriented certification for coffee in Coorg could be relatively limited outside of a few individual-level niches, branding Coorg more generally as a conservation-oriented region could hold promise, leveraging and personalizing the uniqueness of the natural offerings from Coorg and tapping into burgeoning associations with place and region in India.
Topic:
Agriculture, Economics, Environment, and International Trade and Finance
Political Geography:
India

6. Promoting conservation in India by greening coffee

Author:
Magda Rich, P.G. Chengappa, Arun Muniyappa, Pradeepa Babu B.N., Karl M. Rich, and Yadava C.G.
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The Indian coffee sector is at an important transition point, increasingly stuck in the middle between quality and value segments of the market. A potential niche for India is in the development of eco-friendly (green) coffees, leveraging the natural environment and biodiversity present in many regions. In this study, we conducted a value chain assessment of the coffee sector in Coorg, a major production area in India, to identify the potential entry points and constraints to a conservation-oriented strategy of upgrading. The results highlight that coffee value chains in Coorg are fragmented and largely uncoordinated, with innovative upgrading efforts largely individually motivated. This suggests that integrating conservation principles in a broad-based branding strategy could be difficult at the level of the chain without institutional support or the entry of chain champions. On the other hand, integrating conservation as a diversification activity e.g. through the development of butterfly gardens for tourism, could provide a low-cost way of adding value for farmers while promoting good environmental stewardship.
Topic:
Economics, Environment, and Biosecurity
Political Geography:
India

7. New trade theory: implications for industrial policy

Author:
Medin Hege
Publication Date:
04-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The new trade theory, which emerged in the early 1980s, emphasised economies of scale and market failures as driving forces behind international trade. As opposed to the earlier theory, which mainly assumed perfect competition, the new trade theory provided a rationale for industrial policy. This article shows how industrial policy targeting specific firms or industries may be socially desirable within the new trade theory framework. Models from new economic geography and the more recent 'new' new trade theory with heterogeneous firms are also discussed. The main focus is put on models with pecuniary externalities.
Topic:
Economics, International Cooperation, International Trade and Finance, Political Economy, and Politics

8. A Political Economy of Slum Spaces: Mathare Valley

Author:
Tiberius Barasa and Andvig Jens Chr
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The starting point of the paper is the spatial characteristics of slums when it seeks to explain why rulers tend to neglect the welfare of their dwellers: they don't have to. Their economies are fairly closed. While located close to the centers of power, their high population density implies that they cover small space and are easy to cordon off in case of danger. The ease of control from the outside allows rulers to spend less attention to the control of their complex inside. Particularly when a slum is based on shack architecture, the high degree of mutual monitoring among dwellers may cause sharp shifts in the control regime of crime. The emphasis on spatial configurations motivates the focus on one specific slum: Mathare Valley. Paths back to colonial rule are outlined. The paper is stylistically unkempt.
Topic:
Economics, Human Rights, Human Welfare, and Politics
Political Geography:
Europe and Eastern Europe

9. The Governance of Global Wealth Chains

Author:
Leonard Seabrooke and Duncan Wigan
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This working paper creates a theoretical framework to explain how Global Wealth Chains are created, maintained, and governed. We draw upon different strands of literature, including scholarship in international political economy and economic geography on Global Value Chains, literature on finance and law in institutional economics, and work from economic sociology on network dynamics within markets. This scholarship assists us in highlighting three variables in how Global Wealth Chains are articulated and change according to: (1) the complexity of transactions, (2) regulatory liability and (3) innovation capacities among suppliers of products used in wealth chains. We then differentiate five types of global value chain governance - market, modular, relational, captive, and hierarchy - which range from simple 'off shelf' products shielded from regulators by advantageous international tax laws to highly complex and flexible innovative financial products produced by large financial institutions and corporations. This paper highlights how Global Wealth Chains intersect with value chains and real economies, and provides three brief case studies on offshore shell companies, family property trusts, and global-scale corporate tax avoidance.
Topic:
Economics, International Cooperation, Politics, and Governance

10. Policy Strategies for Economic Development in Cuba: A Simulation Model Analysis

Author:
Fulvio Castellacci and Hamza Kanar
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The economic reforms recently implemented in Cuba do not adequately deal with the structural issues that hamper the country's economic development. The paper presents a system dynamics model to investigate Cuba's development process, and a simulation analysis to compare different policy scenarios that may be realized in the future as economic reforms will continue. The results indicate that the most effective development policy would be to combine active public policies to enhance the R sector, on the one hand, and foster the emergence of an efficient private sector that will develop the capital infrastructure of the economy, on the other.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Latin America and Caribbean