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4501. Italy's Unruly Rulers

Author:
Riccardo Alcaro and Nathalie Tocci
Publication Date:
12-2018
Content Type:
Commentary and Analysis
Institution:
Istituto Affari Internazionali
Abstract:
A coalition government that is largely, if not entirely, alien to mainstream party politics has run Italy since June 2018. The coalition is made up of the League, a right-wing anti-immigration party, and the anti-establishment Five Star Movement (Movimento 5 Stelle, M5S), which refuses to categorize itself as either left or right wing. While the two parties did not campaign on a joint agenda, and actually competed in the March 2018 election, a number of important commonalities are present, particularly if one looks at party politics not through the horizontal “left-right” prism but through a vertical “open-closed” one.
Topic:
Foreign Policy, Elections, Political Parties, European Parliament, and Domestic Policy
Political Geography:
Europe, Italy, and European Union

4502. Policies and Politics of Migration towards the European Elections

Author:
Maria Saide Liperi and Asli Selin Okyay
Publication Date:
12-2018
Content Type:
Special Report
Institution:
Istituto Affari Internazionali
Abstract:
On 6 December 2018, Friedrich-Ebert-Stiftung Rome (FES) and Istituto Affari Internazionali (IAI) co-organized the conference “External Borders and Internal Divisions of Europe: Policies and Politics of Migration” to foster debate on European migration and asylum governance by approaching it both as a policy issue and a political question. While the scale of migratory flows is no longer the main problem, countries at the Southern external borders continue facing different policy challenges. The lack of political will and continuing tensions among the member states stand out as the main obstacles blocking substantial policy reform at the European level. This context also provides fertile ground for further polarization of the political debate between the two extreme positions of open versus closed borders, highlighting the need for more balanced and neutral narratives on migration in the run up to the European elections. Report of the conference “External Borders and Internal Division of Europe: Policies and Politics of Migration”, organized in Rome on 6 December 2018 by Friedrich-Ebert-Stiftung (FES) Rome and Istituto Affari Internazionali (IAI).
Topic:
Migration, Politics, Refugees, Borders, and Institutions
Political Geography:
Europe, Middle East, Greece, Balkans, Spain, Italy, Mediterranean, and European Union

4503. The Evolution of Energy Fluxes and Cooperation Models in the Middle East

Author:
Robin Mills
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Despite its dominance as the world’s key exporting region of hydrocarbons, energy connectivity within the Middle East, in the form of cross-border oil and gas pipelines, electricity grids and related institutions, is lagging. There has been limited progress in the Eastern Mediterranean area and with Turkey. But so far unfavourable commercial conditions, persisting subsidies, and regional political suspicions and disputes, have hampered progress. Key changes in the world energy market – a period of lower oil prices, with the expansion of US shale production, the globalisation of natural gas trade, the rise of renewable energy, and growing action on climate change – should encourage more intra-regional links. To realise the prize of 25 billion to more than 100 billion US dollars of savings available from greater energy trade, regional states will have to liberalise energy markets, establish multilateral institutional frameworks, and make the most of support from international energy corporations and influential political players, notably the US, China, EU and Russia. Paper prepared in the framework of the IAI-Eni Strategic Partnership, December 2018.
Topic:
Climate Change, Energy Policy, International Trade and Finance, Natural Resources, and Regional Integration
Political Geography:
Middle East and Gulf Nations

4504. Europe and Iran: The Economic and Commercial Dimensions of a Strained Relationship

Author:
Cornelius Adebahr
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Europe and Iran had begun to invest in a closer commercial relationship just when the United States withdrew from the nuclear deal in May 2018. Since then, Washington has re-imposed its stringent economic sanctions, targeting Iran’s oil exports as a major source of government revenue but also banning financial transactions with the country. This poses an enormous challenge for the EU, which had intended to use the 2015 agreement as a stepping stone to promote regional cooperation and, ultimately, a more comprehensive relationship with Iran. Paper produced in the framework of the IAI-FEPS project entitled “Europe and Iran in a fast-changing Middle East: Confidence-building measures, security dialogue and regional cooperation”, December 2018.
Topic:
Foreign Policy, International Trade and Finance, Bilateral Relations, Sanctions, and Transatlantic Relations
Political Geography:
Europe, Iran, Middle East, North America, United States of America, and European Union

4505. Prisons and Radicalization: Breaking the Cycle through Rehabilitation

Author:
Francesca Capano
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Concerns over migration, economic growth and the rise of populism seemed to overshadow the threat of terrorism in many European countries during 2018. While the number of attacks and alleged plots in Europe have declined considerably compared to previous years, experts have long warned that measuring the terrorism threat on the basis of successful attacks was a “mistake”.
Topic:
Security, Terrorism, Prisons/Penal Systems, and Radicalization
Political Geography:
Europe and Italy

4506. Exploring Refugee Movements in the Middle East Regional Context: Responses to the Syrian Crisis in Lebanon and Turkey

Author:
Karim Makdisi
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Refugee movements are not a new phenomenon in the Middle East and North Africa. The history of the region has been shaped by waves of displacement and refugee crises, and the most recent, the dramatic case of Syria, is still in process. This paper investigates refugee movements in the region and their impact on regional dynamics by focusing on two important case studies: Lebanon and Turkey. It explores each country’s response to the Syrian refugee crisis in detail, while addressing the role of relevant stakeholders, such as international organizations, civil society and government, in humanitarian relief efforts as well as in refugee protection and management.
Topic:
Humanitarian Aid, Migration, Refugees, Syrian War, and Mobility
Political Geography:
Europe, Turkey, Middle East, Lebanon, Syria, and European Union

4507. The Spillover Effects of Regional Trade Agreements on Trade

Author:
Dakshina G. De Silva, Soon-Cheul Lee, Robert P. McComb, and Maurizio Zanardi
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The purpose of this paper is to examine whether or not there is a spillover effect of third countries’ regional trade agreements (RTAs) on their bilateral trade relationships. To identify the RTA spillover effects, we expand a gravity model into a third-country framework using a dataset of bilateral trade and RTAs for 62 country-pairs over the period 2002-2013. We construct a weighted third-countries’ RTA contiguity matrix as well as a spatially-weighted matrix to identify both the spillover and spatial effects of RTA on trade flows. The results show that the spillover effects of RTAs on trade are positive while the spatial effects of RTA are negative and imply that third parties’ RTAs have complementary effects on bilateral trade while the existence of neighbors in the RTA between the two trade partners reduces their bilateral trade. As a result, the proliferation of RTAs expand international trade through spillover effects as well as trade creation and trade diversion.
Topic:
Bilateral Relations, Regional Integration, Economic Policy, and Trade
Political Geography:
Global Focus

4508. The Rise of China and the Rebound in Korea’s Manufacturing Employment

Author:
Kyong Hyun Koo and Unjung Whang
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Over the last three decades, the world has experienced a substantial in-crease in Chinese import penetration due to the rapid improvement in Chi-na’s supply productivity, which is often called the “China shock” or “China syndrome.” The existing literature have shown that the increase in imports from China due to the China shock adversely affected the manufacturing employment of a number of advanced countries such as the U.S., Norway, Denmark, and Spain. Unlike those advanced countries, South Korea has shown a pronounced increase in exports to China as well as imports from China since the 1990s. Over the same time, furthermore, Korea’s manufactur-ing employment has shown a stagnated downward trend compared to other advanced economies and even rebounded since the mid-2000s. Given these motivations, this study investigates both import and export channels to ex-plore how the China trade shocks affected the exceptional trend in Korea’s manufacturing employment from 1993 through 2015. To capture the overall employment effects of the China shocks, specifically, we consider not only how a Korean manufacturing industry employment is affected by the change in its direct exposure to China trade shocks (direct effects), but also how other industries’ changes in exposure to China trade shocks affect the industry through domestic industrial linkages (indirect ef-fects), largely following the empirical approach employed by Acemoglu et al. (2016). Mainly using firm-level data for almost all Korean manufacturing firms with more than four employees and the 2SLS estimation method, we find that during the period 1993-2015 the increase in Chinese import expo-sure had statistically insignificant direct effects on Korea’s manufacturing em-ployment on average, while 1% point increase in Chinese export exposure directly caused 0.18% increase in employment across Korean manufacturing industries. For the indirect effects of China shocks, in contrast, 1% point in-crease in Chinese import exposures of downstream industries (intermediate goods buyers) led to 3.00% decrease in employment of upstream industries (intermediate goods sellers) on average, while 1% point increase in Chinese export exposures of downstream industries brought 1.70% increase in em-ployment of upstream industries on average. The relatively moderate direct effects compared to the indirect ones are partly explained by two factors: First, Korea has gone through a substantial change in the structure of its trade with China since 2000s, so that within-industry supply chains between China and Korea have become more intertwined for some industries. Second, the Korean industries whose main downstream industries were substantially exposed to the Chinese imports (exports) tended to have a relatively low di-rect Chinese import (export) exposure during the period 1993-2015. Based on the 2SLS estimates above, the increased Chinese import expo-sure turns out to have decreased Korea manufacturing employment by 1,210,000 during the period 1993-2015, mainly through the indirect channel. In contrast, the increased Chinese export exposure appears to have increased Korea manufacturing employment by 1,090,000 during the same period, through the direct channel (210,000) and indirect channel (880,000). In the case of Korea’s manufacturing industry, therefore, most of the job reduction attributable to the China shocks has been also offset by job creation caused by the China shocks. Such a considerable increase in manufacturing jobs due to the rise of China, which has not been reported yet in other advanced economies, appear to have played an important role in generating the re-bounding trend in Korea’s manufacturing employment.
Topic:
Globalization, Labor Issues, Economic Policy, and Trade Shocks
Political Geography:
China, Asia, and South Korea

4509. Sources of Comparative Advantage in Services: Institution vs. Social Capital

Author:
Nakgyoon Choi and Soonchan Park
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Previous studies that have identified the impacts of institutions or cultural traits on comparative advantage focused on goods trade, but not services trade. In contrast to the rapid increase in trade in services, empirical examina-tion on sources of comparative advantage in services trade remains limited. This paper attempts to fill this gap by investigating empirically the impacts of institution as well as social capital on comparative advantage in services trade. Services are exposed to relatively more pre-choice risks than goods, because it is difficult to obtain information on the quality of services before the con-sumer decides to purchase. In addition, trade in services involved in global value chains possibly takes on the risks of contract breach by other firms along the same value chains. As a result, the transaction risks for trade in ser-vices are higher than for trade in goods. Using the World Input Output Da-tabase, we estimate the importance of social capital for comparative ad-vantage in services. We find that countries with more social capital tend to specialize in the production of contract-intensive services. We also find that social capital rather than institution matters for comparative advantage in ser-vices.
Topic:
Economic Policy, Institutions, Services, Trade, and Social Capital
Political Geography:
Global Focus

4510. A Study on the Dynamics of Foreign Trade and the Issues of Regional Economic Integration in Central Asia

Author:
Kodirjon Maxamadaminovich Umarkulov
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
At the current stage of globalization, Central Asia (CA) is becoming a focal point for the political and economic interests of global forces because of its rich natural resources and critical strategic position. From this point of view, the CA countries need to form a joint development strategy for solving regional problems and a strong mechanism for countering the main political and economic conflicts in the region. At the same time, the countries of the region need to choose the path of joint development in order to increase the efficiency of their internal capacities and resources, adapt the domestic social and economic infrastructure to modern requirements and improve the living standards of the population. This is directly related to the progress of regional economic integration in CA. Through this integration, the economies of the countries in the region could complement each other and ensure a high level of development in mutual trade and industrial development. However, there are some obstacles and problems hindering the development of economic integration in the region. Most particularly, the weak infrastructure in the region, its economic-geographical isolation from world markets, administrative barriers and political instability hinder trade between the countries of CA. From this point of view, this study focuses on the problems of general and cross-border trade in CA countries, and the opportunities for economic integration in the region.
Topic:
International Trade and Finance, Regional Integration, Economic Policy, and Exports
Political Geography:
Central Asia and Asia