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251. Russian outward FDI and its policy context

Author:
Andrei Panibratov and Kalman Kalotay
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Outward foreign direct investment (OFDI) from Russia often surprises outside observers by its landmark deals. One of them was the purchase in September 2009 of a 55% stake in General Motors' German affiliate Opel by a consortium of the Canadian car maker Magna and the Russian state-owned bank Sberbank. The latter is the largest creditor of the Russian car maker GAZ, and may represent its commercial interests in the contract. With this deal, Russia has bought into the industrial heartland of the world economy and could potentially access more advanced technology. This acquisition hints at the growth of Russian OFDI in general, which has prospered despite fears in many host countries that the investors are subject to Russian political interference, a fear that recently announced Russian policy intentions may allay.
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
Russia, Europe, and Asia

252. Leaders and laggards, on the way down and up

Publication Date:
10-2009
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
With the economies of most countries having passed their troughs, it is a good time to take stock of some of the main features of the crisis so far and to assess what the upturn may look like. In this article, we look back at how the different countries have fared in this crisis and how monetary and fiscal authorities have responded to the crisis. We then turn to the nascent recovery to compare and contrast the upturn across countries. Finally, we highlight some of the main legacies of this crisis. Exposure to financial services, housing booms, consumer debt and trade with the US were seen as factors that would make some countries suffer deeper downturns than others. In the event, the downturn has surprised by how quickly it has spread across countries. So the most affected countries turned out to be the most exposed to the world economy such as Germany, Italy, Japan and Eastern Europe. All major central banks have responded with aggressive cuts in interest rates and adopted wide-ranging unconventional measures. This has helped stabilise financial markets, but the goal of getting credit flowing to the non-financial economy has not yet been achieved. Governments have also responded to the crisis with large fiscal stimulus packages. These packages have helped contain the collapse in activity and contributed to some countries exiting the recession in 2009Q2. Whether these packages will be enough to get the world economy back on a sustainable growth path is still uncertain though. Beyond the short term, where fiscal stimulus and the stock cycle will boost growth, the recovery is expected to be sluggish and bumpy in most places. History suggests that recoveries from financial crises tend to be slower than others, and the repair of household and corporate balance sheets will be a drawn out process. In addition, with large amounts of spare capacity around the world, demand for investment will be weak for some time to come. Furthermore, the nascent upturn has already put pressure on oil and commodity prices. If this continues, it will hamper growth in net importer economies. These factors will combine with country-specific features that determine their potential growth. We forecast the recovery to be most drawn out in Italy, Japan and Germany as these countries are hit by weak demand for investment goods and are characterised by relatively low potential growth. One main legacy of this crisis is the likelihoo d of years of fiscal austerity, to bring public deficits back under control. Another legacy may be in changes to the regulation of financial services, although do date little progress has been made in this area. In addition, EMU has so far proved a resilient entity during the crisis, so that the euro could gain a more prominent role on the world stage, depending on how it fares in the upturn.
Topic:
Economics, Globalization, and Markets
Political Geography:
Japan, Europe, Germany, and Italy

253. An Indispensable Relationship: Economic Linkages between the UK and the rest of the European Union

Publication Date:
02-2009
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
Business for New Europe has requested Oxford Economics to undertake a study detailing the economic ties between the UK and the rest of the European Union (EU), and where possible, quantify them according to a number of parameters such as trade, labour force, tourism, FDI, portfolio investments and banking linkages. In the context of the current economic situation, there is a growing need for increased economic integration and cooperation between partner countries. Therefore, it is particularly relevant to review the importance of the economic links between the UK and the rest of the EU. These inter-relations have come to the fore since the outbreak of the financial crisis. Analysing the impact of the credit crunch on UK-EU relations is not within the scope of this report.
Topic:
Economics, International Trade and Finance, Markets, and Regional Cooperation
Political Geography:
United Kingdom and Europe

254. The Double Asymmetry of European Integration Or: Why the EU Cannot Be a Social Market Economy

Author:
Fritz W. Scharpf
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Judge-made law has played a crucial role in the process of European integration. In the vertical dimension, it has greatly reduced the range of autonomous policy choices in the member states, and it has helped to expand the reach of European competences. At the same time, however, “Integration through Law” does have a liberalizing and deregulatory impact on the socioeconomic regimes of EU member states. This effect is generally compatible with the status quo in liberal market economies, but it tends to undermine the institutions and policy legacies of Continental and Scandinavian social market economies. Given the high consensus requirements of European legislation, this structural asymmetry cannot be corrected through political action at the European level.
Topic:
Economics, Markets, and Regional Cooperation
Political Geography:
Europe

255. Towards a Sustainable Cocoa Chain: Power and possibilities within the cocoa and chocolate sector

Author:
Jan Cappelle
Publication Date:
01-2009
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
The cocoa tree is an important source of income for millions of farming families in equatorial regions. Cocoa originates in the river valleys of the Amazon and the Orinoco in South America. Its discoverers, the Maya people, gave it the name 'cocoa' (or 'God's food'). Cocoa was introduced to Europe in the fifteenth century. Cocoa imports were heavily taxed, and as a result it was consumed as a drink only by the wealthy. Investment from Great Britain and The Netherlands, combined with the launch of the chocolate bar in 1842 by Cadbury, resulted in a greater demand for chocolate. This led to the gradual expansion of cocoa production, spreading to Africa in 1870.
Topic:
Economics, Globalization, International Political Economy, International Trade and Finance, Markets, and Poverty
Political Geography:
Britain, Africa, Europe, South America, Netherlands, and Amazon Basin

256. Eurasian Energy Security

Author:
Jeffrey Mankoff
Publication Date:
02-2009
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
For two weeks in the freezing January of 2009, homes and businesses across Europe were left without heat, the result of a murky dispute over gas prices between Russia and Ukraine. When Moscow and Kiev failed to agree on a formula for calculating price and transit fees for the coming year, the gas simply stopped flowing. Europe, which gets a significant proportion of its gas through pipelines that transit both Russia and Ukraine, bore the brunt of this confrontation between the two feuding post-Soviet neighbors.
Topic:
Security, Energy Policy, Markets, and Political Economy
Political Geography:
Russia, Europe, Ukraine, and Asia

257. Land titling and tenure security in the context of inequality

Author:
Rikke Broegaard
Publication Date:
03-2009
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The stated goal of land titling and administration projects supported worldwide by development agencies like the World Bank is to strengthen property rights for the poor. Formal property rights, it is argued, lead to increased tenure security, which in turn encourages property rights holders to invest. Hence, strengthening property rights for the poor contributes to facilitate pro-poor economic growth and a more equitable development. However, the link between formal land titles and tenure security is assumed rather than based on empirical evidence. This DIIS-brief reviews this and other key assumptions underlying land titling and administration interventions. Findings from research that explores rural landowners' own perceptions of the factors that constitute tenure security highlight the importance of formal titles for perceived tenure security, but only in combination with other resources. Therefore, to single out formal titles as being equal to or the most important element in tenure security does not correspond with people's perceptions. Thus, promoting land titling as the policy intervention to strengthen tenure security does not appear to be a feasible strategy for addressing the highly complex problem of insecure land tenure for the rural poor. On the contrary, emerging evidence suggests that land titling tends to make land more readily available to a larger and more resourceful circle of potential buyers. Thus, rather than facilitating pro-poor and equitable development, land titling projects may clear the road for large-scale concentrations of land that gradually exclude the rural poor.
Topic:
Security, Agriculture, Government, and Markets
Political Geography:
Europe

258. The Asymmetry of European Integration or why the EU cannot be a "Social Market Economy"

Author:
Fritz W. Scharpf
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
Judge-made law has played a crucial role in the process of European integration. In the vertical dimension, it has greatly reduced the range of autonomous policy choices in the member states, and it has helped to expand the reach of European competences. At the same time, however, “Integration through Law” does have a liberalizing and deregulatory impact on the socio-economic regimes of EU member states. This effect is generally compatible with the status quo in “Liberal Market Economies”, but it tends to undermine the institutions and policy legacies of Continental and Scandinavian “Social Market Economies”. Given the high consensus requirements of European legislation, this structural asymmetry cannot be corrected through political action at the European level.
Topic:
Economics, Markets, and Law
Political Geography:
Europe

259. European Food Safety Regulation and the Developing Countries: Regulatory problems and possibilities

Author:
Morten Broberg
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Many developing countries are highly dependent upon exports of agricultural products, and for many of these countries the European Community is the primary export market. Increasingly, however, the developing country exporters are met with stringent food safety law requirements that constitute a virtual barrier to entering the European Community market. Indeed, food safety requirements have been ranked as one of the foremost factors affecting exports of agricultural and food products from developing countries. This working paper identifies those food safety law requirements that cause the most problems for developing countries exporters of food products and it points to possible ways of overcoming them.
Topic:
Agriculture, Markets, Food, European Union, Regulation, Exports, and Food Safety
Political Geography:
Europe

260. Labor Regulations and European Industrial Specialization: Evidence from Private Equity Investments

Author:
Ant Bozkaya and William R. Kerr
Publication Date:
05-2008
Content Type:
Working Paper
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
European nations empirically substitute between employment protection regulations and labor market expenditures like unemployment insurance benefits in the provision of labor market insurance to workers. While perhaps substitutes from a worker's perspective, employment regulations more directly tax .firms making frequent labor force adjustments. These labor adjustments are especially important for the portfolio companies of both venture capital and buy-out investors. European nations providing worker insurance through labor market expenditures developed stronger domestic private equity markets over the 1990-2004 period than those nations favoring employment protection. These patterns are further evident in US-sourced private equity investments into Europe. Moreover, tests for industry specialization suggest that countries with more flexible labor markets tend to specialize in sectors characterized by high labor volatility. These results are relevant to the literatures examining the impact of labor market regulations on entrepreneurship and productivity growth due to reallocations across .firms and sectors.
Topic:
Economics, Industrial Policy, and Markets
Political Geography:
United States and Europe