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1431. No Strings Attached: Corporate Welfare, State Intervention, and the Issue of Conditionality

Author:
Fabio Bulfone, Timur Ergen, and Manolis Kalaitzake
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper contributes to Comparative Political Economy (CPE), developing an analytical concept of corporate welfare. Corporate welfare — the transfer of public funds and benefits to corporate actors with weak or no conditionality — is a prominent form of state-business relations that CPE scholarship regularly overlooks and misinterprets. Such transfers should be understood as a structural privilege of business in a globalized post-Fordist capitalism, and an increasingly common strategy through which states attempt to steward national economic dynamism within a highly constrained range of policy options. However, without a well-developed concept of corporate welfare – premised upon the key criterion of conditionality – studies that identify a “return” of the state in industrial planning misrepresent these transfers to business as a reassertion of state influence and control, rather than a reflection of state weakness and subordination. The paper provides the analytical building blocks to properly conceptualize transfers to business, works out the core challenges for empirical research, and provides empirical illustrations of this burgeoning phenomenon from the fields of unconventional monetary policy, privatization, and urban political economy.
Topic:
Industrial Policy, Political Economy, Privatization, Monetary Policy, and Subsidies
Political Geography:
Global Focus

1432. The Instability of Preferences: Uncertain Futures and the Incommensurable and Intersubjective Nature of Value(s)

Author:
Richard Bronk and Jens Beckert
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The default assumption of standard economics is to treat preferences as exogenously ‘given’, consistent with one another, ‘revealed’ by past choices, and context independent. There has been increased interest recently (within behavioural economics) in the impact of inconsistent or irrational preferences and (more broadly) in dynamic and endogenous preferences. This paper builds on these challenges to standard assumptions by analysing the pivotal role of three aspects of preference formation in explaining capitalist dynamics and market instability. These are the constant creation of new preferences and the indeterminacy of choice sets in the context of widespread product innovation; the moral indeterminacy implied by conflicting and incommensurable social norms attaching to market goods where there is no single scale of value and hence no unique set of rational trade-offs; and, lastly, the contingent social and market construction of the product differentiation, quality attribution, and value assessments central to preference formation. The paper concludes by considering implications for economics as a discipline.
Topic:
Economics, Values, Endogenous Factors, and Preference Formation
Political Geography:
Global Focus

1433. The Impact of Carbon Taxation and Revenue Redistribution on Poverty and Inequality

Author:
Daniele Malerba, Xiangjie Chen, Kuishang Feng, Klaus Hubacek, and Yannick Oswald
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The global policy debate on just transitions is concerned with how to achieve a socially just and acceptable transition toward a climate-neutral and climate-resilient global economy. At the core of this debate is the assumption that efforts to combat environmental threats will not succeed unless combined with measures to reduce poverty and inequality. Our research explores the potential of carbon fiscal reforms, combining a carbon tax of levels deemed appropriate to achieve climate targets and the transfer of the revenues raised to vulnerable households. The current energy and cost-of-living crisis shows the importance of protecting the poorest and most vulnerable households from price increases. It also shows the difficulty of achieving short- and long-term policy priorities. Despite the current spikes in energy prices, carbon fiscal reforms can achieve both social and environmental goals through simultaneously decreasing emissions and reducing poverty and inequality. They should act as an effective enabler of just transitions. Carbon fiscal reform can avoid some environmental impacts by incentivising reductions in emissions. Carbon pricing has been increasingly advocated and is now at the centre of policy debates, including the UNFCCC Conference of the Parties (COP) and the recent German presidency of the world’s leading industrial nations (G7). But carbon fiscal reforms can also be used to raise revenue from carbon pricing instruments to offset the negative effects of higher prices on poorer households as well as further reaching distributional targets and poverty alleviation. Climate targets are negotiated every year, including at COP, hence it is critical to re-evaluate and improve estimates of the distributional impacts of climate policies such as carbon pricing. Public acceptability of climate policies is key to their implementation, but it depends to a large extent on the perceived fairness of such policies. Recycling revenues from carbon taxes directly back to vulnerable households is likely to gain the approval of a large number of people, especially in low-income countries where the high proportion of the population involved in the informal economy means that lowering income tax does not benefit the poorest and most vulnerable sections of society. But the targeting of these direct transfers needs careful consideration. Here, we assess the impact on poverty and inequality of a global carbon tax and national redistribution of revenues to vulnerable households. We look at different options for such redistribution, including a lump sum payment, the use of current social assistance programmes, and an expansion of social assistance following COVID-19. We find that a carbon tax of US$50/tCO2 without revenue redistribution could increase global extreme poverty, but the redistribution of revenue from such a carbon tax could substantially reduce poverty by between 16% and 27% (110 to 190 million people), and reduce inequality (the average Gini coefficient would decline by between 4% and 8%), depending on the scenario. This shows that the way in which revenue from a carbon tax is redistributed greatly affects its impact, underlining the importance of policy design and targeting mechanisms. The recycling of revenues should also take into account the specific political economy of a country and consider international transfers. These findings provide policy makers with a strong basis for informing discussions, starting off with those at COP27, in which ambitious climate targets and just transition should both remain central goals in the context of the ongoing international energy crisis.
Topic:
Climate Change, Poverty, Inequality, Economy, Carbon Tax, Carbon Emissions, and Revenue Management
Political Geography:
Global Focus

1434. Economic Effects of FDI: How Important is Rising Market Concentration?

Author:
Kasper Vrolijk
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Many governments adopt policies and actively compete to attract foreign direct investment (FDI). Particularly for lower-income countries, attracting FDI – and with it the benefits of cooperating with multi-national enterprises (MNEs) – is a promising strategy for participating in global supply chains and increasing local firm productivity. However, empirical findings show contrasting effects and there is heated debate over FDI’s advantages and drawbacks. The current trend to rising market concentration also begs the question: Have FDI effects changed in recent years? This Policy Brief aims to address these questions by studying FDI and what the apparent growth in market concentration implies. Although foreign investment theoretically raises productivity, creates employment and offers many other benefits, the empirical evidence is not unequivocal. Initial coarse country-level data found that receptivity to FDI raises the host country’s economic growth. But later research used more detailed sector data and showed ambiguous effects (Görg & Greenaway, 2004). New microdata confirm that FDI effects are differential: Not all workers and households benefit equally. They also showcase the different ways in which MNEs and FDI benefit firms, workers and households in host countries. Recently, superstar firms, which capture large shares of industries and thereby increase market con-centration, have emerged. Linked to reduced national economic dynamism and evident in global markets, the rise of superstar firms could negatively impact on FDI effects. They differ from MNE competition effects and confer market power so that MNEs can determine prices and wages. This trend toward rising market concentration is observed across multiple sectors and has several possible causes, such as technological and legal factors. A literature survey reveals a lack of evidence about how rising concentration in global markets is affecting FDI gains. However, other evidence suggests that the positive spillovers to domestic firms may well be lower, with higher market concentration negatively affecting wages and employment. The following takeaways can be derived for policy-making: 1. Integrate competition policy: Competition effects should be considered when evaluating FDI and policies should be introduced to ensure competitive practises after FDI entry. 2. Improve monitoring: Collect data on competi-tive forces and how they change when MNEs enter host economies. 3. Absorb regressive effects: Introduce social benefits to counter the potential mixed effects of FDI and MNE market power.
Topic:
Development, Markets, Foreign Direct Investment, and Economy
Political Geography:
Global Focus

1435. Learning where it matters: Piloting action learning with frontline humanitarian staff

Author:
Jennifer Doherty
Publication Date:
04-2022
Content Type:
Special Report
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
The knowledge of frontline staff – those directly involved in programme implementation and monitoring – is fundamental to good humanitarian action. These individuals make decisions and solve problems every day in their work with crisis-affected populations. The interactions they have with communities produce important information on how to implement projects most effectively to meet local needs. Despite the central importance of this knowledge to effective programming, frontline learning has consistently lacked support. ALNAP created an action learning resource pack and supported training on action learning with 26 frontline staff from local, national and international humanitarian NGOs between December 2020 and October 2021. This study explores the learning and reflections from that pilot on using action learning with frontline staff in humanitarian contexts.
Topic:
Humanitarian Aid, Community, Project Management, and Implementation
Political Geography:
Global Focus

1436. Systems Thinking Handbook for Humanitarians

Author:
Leah Campbell
Publication Date:
08-2022
Content Type:
Special Report
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
This handbook introduces the ‘how’ of systems thinking for humanitarians – specifically the particular skills that systems thinkers need to practice and seven basic tools for systems thinking. You can also find a helpful glossary of terms at the end. If you’re new to systems thinking, you may like to take a look at the accompanying ALNAP paper, Systems thinking for humanitarians: An introduction for the complete beginner, which provides further background on what systems thinking is and why it is relevant to and useful for the sorts of complex problems that humanitarians face.
Topic:
Humanitarian Aid, Handbook, and Systems Thinking
Political Geography:
Global Focus

1437. Communicating humanitarian learning: What do we know?

Author:
Jo-Hannah Lavey
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
Effective communication of critical lessons is essential to improve response to crises. This paper identifies what we know about how the sector communicates what it has learned to improve policy and practice. Humanitarians produce a wealth of research and knowledge. There is, however, little evidence on how to best communicate this knowledge to maximise its impact. This scoping paper is aimed at producers and communicators of humanitarian knowledge. It provides a brief overview of core concepts and existing literature related to communicating humanitarian learning. It identifies five useful findings: Change is complex: it takes time and often does not succeed. Documented evidence is a small contributor to change. Humanitarians prefer tacit, networked knowledge over documentation. Humanitarians access knowledge that is immediately relevant. National actors are not sufficiently included. The paper also outlines what the literature tells us about humanitarian preferences for how to communicate learning. It concludes by finding that those aiming to share documented learning to improve policy and practice are operating without a solid evidence base to guide them, and proposes a future research agenda to fill these evidence gaps.
Topic:
Humanitarian Aid, Communications, and Organizational Learning
Political Geography:
Global Focus

1438. Lessons of lessons: A window into the evolution of the humanitarian sector

Author:
Jessica Alexander and Emmeline Kerkvliet
Publication Date:
09-2022
Content Type:
Special Report
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
Monitoring and evaluation is critical for assessing performance and maintaining accountability in the humanitarian sector. For 25 years, ALNAP Lessons Papers have brought together findings and recommendations from a range of different contexts and disaster types, laying out lessons from previous responses in concise and readable ways. This paper looks at a selection of ALNAP Lessons papers across 20 years, aiming to identify where and how the humanitarian system has evolved over time, as well as the areas where progress has been weaker and stronger attention is still needed. It identifies four interesting trends: Structural, system-wide themes appear more frequently in the Lessons Papers. Lessons related to technical learning showed the most change from ‘observational’ to ‘instructional’ over time. Lessons related to structural and system-wide issues don’t change has much over time, staying more ‘observational’. Lessons related to localisation and community engagement and accountability (CEA) show least progress over time.
Topic:
Humanitarian Aid, Community Engagement, Planning, Monitoring, and and Evaluation (PME)
Political Geography:
Global Focus

1439. Action Learning for Frontline Humanitarians: a resource pack

Author:
Jennifer Doherty, Amelie Sundberg, and Alice Obrecht
Publication Date:
11-2022
Content Type:
Course Pack
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
The knowledge of frontline staff – those directly involved in programme implementation and monitoring – is fundamental to good humanitarian action. These individuals make decisions and solve problems every day in their work with crisis-affected populations. The interactions they have with communities produce important information on how to implement projects most effectively to meet local needs. Decisions stemming from this experiential knowledge can be as valuable as decisions reached through more formal, explicit evidence. The pack is for programme staff who are implementing projects, staff in monitoring, evaluation, accountability and learning (MEAL) roles who are collecting data and evaluating projects, and for team leaders or managers who work with them. Individuals, project teams or cross-organisational and inter-agency groups can all use this approach.
Topic:
Humanitarian Aid, Decision-Making, and Organizational Learning
Political Geography:
Global Focus

1440. Learning to change: The case for systemic learning strategies in the humanitarian sector

Author:
John Mitchell and Ben Ramalingam
Publication Date:
12-2022
Content Type:
Special Report
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
This paper presents the case for systemic organisational change in the humanitarian system. The paper firstly shows that that organisational learning has tended to reinforce existing ways of working and has not been able to shift a culture that values action over reflection. As a result, the rest of the paper asks about the most significant changes in the humanitarian sector and the contribution of learning. The paper explores four case studies on learning using a systems lens, which enables a more dynamic and holistic view of how learning actually works in the sector. The findings show that learning has indeed played a critical role in many key change efforts but has often not been part of wider organisational learning efforts. The paper’s conclusion suggests that the humanitarian sector needs to rethink its rationale and approach to learning; and that the research and explorations in the paper can underpin this approach. A number of steps are then proposed for how this may be taken forward.
Topic:
Humanitarian Aid and Organizational Learning
Political Geography:
Global Focus