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19431. Democracy index 2011: Democracy under stress

Publication Date:
12-2011
Content Type:
Working Paper
Abstract:
This is the fourth edition of the Economist Intelligence Unit's Democracy index. It reflects the situation as of the beginning of December 2011. The first edition, published in The Economist's The World in 2007, measured the state of democracy in September 2006; the second edition covered the situation towards the end of 2008; and the third as of November 2010. The index provides a snapshot of the state of democracy worldwide for 165 independent states and two territories—this covers almost the entire population of the world and the vast majority of the world's independent states (micro states are excluded). The overall Democracy index is based on five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. Countries are placed within one of four types of regimes: full democracies; flawed democracies; hybrid regimes; and authoritarian regimes.
Topic:
International Relations, Civil Society, Democratization, Government, and Politics

19432. Policy Concerns of Low Fertility for Military Planning in South Korea

Author:
Elizabeth Hervey Stephen
Publication Date:
11-2011
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
The South Korean military currently is the sixth-largest in the world. But years of low birth rates have resulted in declining numbers of young men available for military service, and the country now faces the pressing question of how to ensure national security in the face of inevitable troop reductions. Some options for offsetting this shrinking recruit pool (such as increasing fertility, increasing immigration, and increasing the number of women in the military) might seem obvious, but the complex economic, social, and cultural reality of South Korea make them unlikely to be embraced. The best focus for immediate action is to stabilize or increase service terms and to encourage development and implementation of high-tech security systems. While the recruit pool appears nearly adequate at present, South Korea must act quickly to develop the leaner, more diverse, and more technologically based military necessary for the country to maintain a viable military force.
Topic:
Security
Political Geography:
Israel, Asia, and South Korea

19433. The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment

Author:
Peter A. Petri, Michael G. Plummer, and Fan Zhai
Publication Date:
10-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
Two emerging tracks of trade agreements in the Asia-Pacific—one based on the proposed Trans-Pacific Partnership (TPP) agreement and an Asian track—could consolidate the “noodle bowl” of current smaller agreements and provide pathways to a Free Trade Area of the Asia-Pacific (FTAAP). We examine the benefits and strategic incentives generated by these tracks over 2010-2025. The effects on the world economy would be small initially but by 2025 the annual welfare gains would rise to $104 billion on the TPP track, $303 billion on both tracks, and $862 billion with an FTAAP. The tracks will be competitive but their strategic implications are constructive: each would generate incentives for enlargement. Over time, strong economic incentives would emerge for the United States and China to consolidate the tracks into a region-wide agreement. Each track would bring a different template to such consolidation and can be viewed as defining a “disagreement point” in the Asia-Pacific bargaining game. The study is based on an analysis of 48 actual and proposed Asia-Pacific trade agreements and models impacts on variables including sectoral trade, output, employment and job shifts in 24 world regions.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, China, Israel, Asia, Australia/Pacific, and Asia-Pacific

19434. An Evaluation of Overseas Oil Investment Projects Under Uncertainty Using a Real Options Based Simulation Model

Author:
ZhongXiang Zhang, Lei Zhu, and Ying Fan
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
This paper applies real options theory to establish an overseas oil investment evaluation model that is based on Monte Carlo simulation and is solved by the Least Squares Monte-Carlo method. To better reflect the reality of overseas oil investment, the model has incorporated not only the uncertainties of oil price and investment cost but also the uncertainties of exchange rate and investment environment. These unique features have enabled the model to be best equipped to evaluate the value of oil overseas investment projects of three oil field sizes (large, medium, small) and under different resource tax systems (royalty tax and production sharing contracts). In the empirical setting, China was selected as an investor country and Indonesia as an investee country as a case study. The results show that the investment risks and project values of small sized oil fields are more sensitive to changes in the uncertainty factors than the large and medium sized oil fields. Furthermore, among the uncertainty factors considered in the model, the investment risk of overseas oil investment may be underestimated if no consideration is given of the impacts of exchange rate and investment environment. Finally, as there is an important tradeoff between oil resource investee country and overseas oil investor, in medium and small sized oil investment negotiation the oil company should try to increase the cost oil limit in production sharing contract and avoid the term of a windfall profits tax to reduce the investment risk of overseas oil fields.
Topic:
Development, Economics, Energy Policy, International Trade and Finance, and Oil
Political Geography:
China, Indonesia, and Israel

19435. Who Should Bear the Cost of China's Carbon Emissions Embodied in Goods for Exports?

Author:
ZhongXiang Zhang
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
China's capital-intensive, export-oriented, spectacular economic growth since launching its open-door policy and economic reforms in late 1978 not only has created jobs and has lifted millions of the Chinese people out of poverty, but also has given rise to unprecedented environmental pollution and CO2 emissions. While estimates of the embedded CO2 emissions in China's trade differ, both single country studies for China and global studies show a hefty chunk of China's CO2 emissions embedded in trade. This portion of CO2 emissions had helped to turn China into the world's largest carbon emitter, and is further widening its gap with the second largest emitter. This raises the issue of who should be responsible for this portion of emissions and bearing the carbon cost of exports. China certainly wants importers to cover some, if not all, of that costs. While China's stance is understandable, this paper has argued from a broad and balanced perspective that if this is pushed too far, it will not help to find solutions to this issue. On the contrary it can be to China's disadvantage for a number of reasons. However, aligning this responsibility with China does not necessarily suggest the sole reliance on domestic actions. In that context, the paper recommends specific actions that need to be taken internationally as well as domestically in order to effectively control the embedded CO2 emissions in China's trade.
Topic:
Climate Change, Economics, Industrial Policy, and International Trade and Finance
Political Geography:
China

19436. Korea's Growth Performance: Past and Future

Author:
Marcus Noland
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
South Korea is arguably the premier development success story of the last half century. For 47 years starting in 1963, the economy averaged 7 percent real growth annually, and experienced only two years of economic contraction: 1980 after the second oil shock and the assassination of President Park Chung-hee, and 1998 at the nadir of the Asian financial crisis. At the start of that period South Korea had a per capita income lower than that of Mozambique or Bolivia; today it is richer than Spain or New Zealand, and was the first Asian and first non-G7 country to host a summit of the G20, the unofficial steering committee of the world economy.
Topic:
Demographics, Development, Economics, Industrial Policy, International Trade and Finance, and Political Economy
Political Geography:
Israel, Asia, South Korea, Spain, Mozambique, New Zealand, and Bolivia

19437. Gender in Transition: The Case of North Korea

Author:
Stephan Haggard and Marcus Noland
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
This paper uses a survey of 300 North Korean refugees to examine the experience of women in North Korea's fitful economic transition. Like other socialist states, North Korea has maintained a de jure commitment to women's rights. However, we find that women have been disproportionately shed from state-affiliated employment and thrust into a market environment characterized by weak institutions and corruption. As a result, the state and its affiliated institutions are increasingly populated by males, and the market, particularly in its retail aspects, is dominated by women. Among the most recent cohort of refugees to leave North Korea, more than one-third of male respondents indicate that criminality and corruption is the best way to make money, and 95 percent of female traders report paying bribes to avoid the penal system. In short, the increasingly male-dominated state preys on the increasingly female-dominated market. These results paint a picture of a vulnerable group that has been disadvantaged in North Korea's transition. Energies are directed toward survival, mass civil disobedience is reactive, and as a group, this population appears to lack the tools or social capital to act collectively to improve their status.
Topic:
Corruption, Gender Issues, Markets, and Labor Issues
Political Geography:
Israel and North Korea

19438. Rent(s) Asunder: Sectoral Rent Extraction Possibilities and Bribery by Multinational Corporations

Author:
Nathan Jensen, Edmund Malesky, and Dimitar Gueorgiev
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
East-West Center
Abstract:
We argue that openness to foreign investment can have differential effects on corruption, even within the same country and under the exact same domestic institutions over time. Our theoretical approach departs from standard political economy by attributing corruption motives to firms as well as officials. Rather than interpreting bribes solely as a coercive “tax” imposed on business activities, we allow for the possibility that firms may be complicit in using bribes to enter protected sectors. Thus, we expect variation in bribe propensity across sectors according to expected profitability which we proxy with investment restrictions. Specifically, we argue that foreign investment will not be associated with corruption in sectors with fewer restrictions and more competition, but will increase dramatically as firms seek to enter restricted and uncompetitive sectors that offer higher rents. We test this effect using a list experiment, a technique drawn from applied psychology, embedded in a nationally representative survey of 10,000 foreign and domestic businesses in Vietnam. Our findings show that the impact of domestic reforms and economic openness on corruption is conditional on polices that restrict competition by limiting entry into the sector.
Topic:
Development, Industrial Policy, International Trade and Finance, Political Economy, and Foreign Direct Investment
Political Geography:
Israel and Vietnam

19439. Pro-poor Growth through Export Sector Support: What Works Where and Why

Author:
Peter Gibbon and Henrik Nielsen
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
This report reviews international experiences with pro-poor development assistance to export sectors. Such support has become more common in the last decade and a half, following the emergence of widespread consensus amongst policymakers that export growth can be a key poverty reduction mechanism – since it should increase both national income and formal employment. This contributes to poverty reduction directly through increased employment and indirectly through creating additional resources for governments to pursue pro-poor policies. Nevertheless, policymakers normally also agree that some types of export growth are more (potentially) pro-poor than others, especially but not only in their employment effects. It is initiatives to respond to this challenge that will be treated in this report.
Topic:
Economics, Gender Issues, Poverty, and Labor Issues
Political Geography:
Africa

19440. The Partai Keadilan Sejahtera (PKS) in the landscape of Indonesian Islamist Politics: Cadre-Training as Mode of Preventive Radicalisation?

Author:
Farish A. Noor
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:
The Partai Keadilan Sejahtera PKS is one of the younger parties in Indonesia today, yet it has established itself as a national party with branch offices all over the Indonesian archipelago and representation in government at all levels. When it first came onto the scene of Indonesian politics it was criticized by Indonesian liberal intellectuals as a 'Trojan horse' for further Islamisation of Indonesia. However some of Indonesia's more radical and militant Islamist groups have in turn criticized the PKS for 'selling out' by joining the democratic political process.
Topic:
Democratization, Government, Islam, Politics, and Armed Struggle
Political Geography:
Indonesia and Southeast Asia