Diplomacy & Defense Think Tank News

Die G7-Staaten brauchen neue Verbündete. Der Think7-Beratungsprozess für die G7, ein Zusammenschluss führender Think Tanks und Forschungsinstitute, mahnt kürzlich in einem Communiqué: Die entschiedene Eindämmung der sich rasant ausbreitenden Schuldenkrise in Entwicklungs- und Schwellenländern sei von zentraler Bedeutung in der Ausgestaltung vertrauensvoller Allianzen innerhalb der G20 und darüber hinaus.

Die G7-Staaten brauchen neue Verbündete. Der Think7-Beratungsprozess für die G7, ein Zusammenschluss führender Think Tanks und Forschungsinstitute, mahnt kürzlich in einem Communiqué: Die entschiedene Eindämmung der sich rasant ausbreitenden Schuldenkrise in Entwicklungs- und Schwellenländern sei von zentraler Bedeutung in der Ausgestaltung vertrauensvoller Allianzen innerhalb der G20 und darüber hinaus.

Die am DIW Berlin angesiedelte forschungsbasierte Infrastruktureinrichtung Sozio-oekonomisches Panel (SOEP) sucht zum nächstmöglichen Zeitpunkt eine studentische Hilfskraft (m/w/div) für 10 Wochenstunden.

Das Statistische Bundesamt hat heute bekannt gegeben, dass die deutsche Wirtschaft im ersten Quartal dieses Jahres um 0,3 Prozent im Vergleich zum vorherigen Vierteljahr geschrumpft ist. Dazu ein Statement von Geraldine Dany-Knedlik, Co-Leiterin Konjunkturpolitik im Deutschen Institut für Wirtschaftsforschung (DIW Berlin):

Mit dem Rückgang des Bruttoinlandsprodukts im ersten Quartal um 0,3 Prozent ist nun klar, dass sich die deutsche Wirtschaft im Winterhalbjahr in einer leichten Rezession befand. Das DIW Berlin hatte einen etwas geringeren Rückgang der Wirtschaftsleistung um 0,1 Prozent prognostiziert. Dass er nun deutlicher ausfiel als erwartet, lag vor allem am privaten Konsum, der mit minus 1,2 Prozent nochmal stärker nachgab als zuvor angenommen. Ursächlich für die Konsumzurückhaltung ist die trotz der Entspannung bei den Energiepreisen unerwartet hartnäckig hohe Inflation und der damit einhergehende reale Kaufkraftverlust. Die positiven Beiträge des Außenhandels und auch von den Investitionen konnten dies nicht kompensieren, so dass das Bruttoinlandsprodukt unter dem Strich zurückging. Sowohl der private Konsum als auch die Wirtschaftsleistung insgesamt dürften sich aber im Jahresverlauf deutlich erholen.

Utilizing an original data set, this paper demonstrates how protectionist industrial policy during the period of hybrid liberalisation has shaped the organizational structure of clothing firms in Egypt. It investigates determinants of vertical integration of clothing firms into fabric production. High-end market segments are a critical determinant of integration. Limited access to finance restricts the possibilities for many firms to undertake the investment required to integrate, whilst volatile and uncertain market conditions make firms more likely to rely on the market for their inputs. But there are nuances related to market segment. Producers of higher quality garments rely on imported textiles, so these producers do not integrate even if search and switch costs are high. But the opposite is true of producers relying on domestic suppliers. Foreign institutions are better able to ensure contract enforcement with respect to quality and timely delivery so that suppliers opportunistic behaviour is deterred, reducing the necessity of clothing firms to integrate. This may not be the case with respect to domestic suppliers, when domestic institutions do not guarantee the same level of enforcement. The adoption of the hybrid liberalisation model meant that the transition to a market economy was not preceded by the creation of the necessary regulatory framework. This model resulted in inefficient upstream production and in an institutional setting conducive to agency problems. It also meant that business suffers excessive and inefficient bureaucracy. It is thus not possible for firms to achieve the first best outcome of arm’s length relations based on frictionless market transactions. Given these structural constraints firms opt for the second best solution of make rather than buy, i.e. vertical integration. But only some firms are able to use the arbitrary and discretionary decision making system to their favour, negotiating government obstacles to successful business. Those linked to power, prospered, whilst the businesses of others foundered against the wall of patronage, bureaucracy and red tape.

Utilizing an original data set, this paper demonstrates how protectionist industrial policy during the period of hybrid liberalisation has shaped the organizational structure of clothing firms in Egypt. It investigates determinants of vertical integration of clothing firms into fabric production. High-end market segments are a critical determinant of integration. Limited access to finance restricts the possibilities for many firms to undertake the investment required to integrate, whilst volatile and uncertain market conditions make firms more likely to rely on the market for their inputs. But there are nuances related to market segment. Producers of higher quality garments rely on imported textiles, so these producers do not integrate even if search and switch costs are high. But the opposite is true of producers relying on domestic suppliers. Foreign institutions are better able to ensure contract enforcement with respect to quality and timely delivery so that suppliers opportunistic behaviour is deterred, reducing the necessity of clothing firms to integrate. This may not be the case with respect to domestic suppliers, when domestic institutions do not guarantee the same level of enforcement. The adoption of the hybrid liberalisation model meant that the transition to a market economy was not preceded by the creation of the necessary regulatory framework. This model resulted in inefficient upstream production and in an institutional setting conducive to agency problems. It also meant that business suffers excessive and inefficient bureaucracy. It is thus not possible for firms to achieve the first best outcome of arm’s length relations based on frictionless market transactions. Given these structural constraints firms opt for the second best solution of make rather than buy, i.e. vertical integration. But only some firms are able to use the arbitrary and discretionary decision making system to their favour, negotiating government obstacles to successful business. Those linked to power, prospered, whilst the businesses of others foundered against the wall of patronage, bureaucracy and red tape.

Utilizing an original data set, this paper demonstrates how protectionist industrial policy during the period of hybrid liberalisation has shaped the organizational structure of clothing firms in Egypt. It investigates determinants of vertical integration of clothing firms into fabric production. High-end market segments are a critical determinant of integration. Limited access to finance restricts the possibilities for many firms to undertake the investment required to integrate, whilst volatile and uncertain market conditions make firms more likely to rely on the market for their inputs. But there are nuances related to market segment. Producers of higher quality garments rely on imported textiles, so these producers do not integrate even if search and switch costs are high. But the opposite is true of producers relying on domestic suppliers. Foreign institutions are better able to ensure contract enforcement with respect to quality and timely delivery so that suppliers opportunistic behaviour is deterred, reducing the necessity of clothing firms to integrate. This may not be the case with respect to domestic suppliers, when domestic institutions do not guarantee the same level of enforcement. The adoption of the hybrid liberalisation model meant that the transition to a market economy was not preceded by the creation of the necessary regulatory framework. This model resulted in inefficient upstream production and in an institutional setting conducive to agency problems. It also meant that business suffers excessive and inefficient bureaucracy. It is thus not possible for firms to achieve the first best outcome of arm’s length relations based on frictionless market transactions. Given these structural constraints firms opt for the second best solution of make rather than buy, i.e. vertical integration. But only some firms are able to use the arbitrary and discretionary decision making system to their favour, negotiating government obstacles to successful business. Those linked to power, prospered, whilst the businesses of others foundered against the wall of patronage, bureaucracy and red tape.

Global challenges such as climate change, biodiversity loss, and the global debt crisis call for more cooperation among nations. Yet instead of well-coordinated, wise cooperation for the global common good, geopolitical tensions are rising and protectionism seems to have  become a “new normal”. As a consequence, the delivery of the United Nations Sustainable Development Agenda 2030 has been dramatically slow and the benefits of growth policies are imbalanced across high-, low-, and middle-income countries just as within them.

Global challenges such as climate change, biodiversity loss, and the global debt crisis call for more cooperation among nations. Yet instead of well-coordinated, wise cooperation for the global common good, geopolitical tensions are rising and protectionism seems to have  become a “new normal”. As a consequence, the delivery of the United Nations Sustainable Development Agenda 2030 has been dramatically slow and the benefits of growth policies are imbalanced across high-, low-, and middle-income countries just as within them.

Global challenges such as climate change, biodiversity loss, and the global debt crisis call for more cooperation among nations. Yet instead of well-coordinated, wise cooperation for the global common good, geopolitical tensions are rising and protectionism seems to have  become a “new normal”. As a consequence, the delivery of the United Nations Sustainable Development Agenda 2030 has been dramatically slow and the benefits of growth policies are imbalanced across high-, low-, and middle-income countries just as within them.

Die Abteilung Makroökonomie des Deutschen Instituts für Wirtschaftsforschung (DIW Berlin) sucht zum nächstmöglichen Zeitpunkt zwei studentische Hilfskräfte (m/w/div) für 10 Wochenstunden.

Socio-ecological transitions need to address the pressing challenges of our time, namely climate change mitigation and social development – including poverty and inequality reduction – in a complementary manner. The importance of achieving resilient and sustainable societies has been made more evident by recent shocks such as the Covid-19 pandemic and the war in Ukraine. As a consequence, national and international development policies need to foster links between social and environmental goals and policies.
One way to achieve such synergies is through environmental fiscal reforms, defined as the combination of carbon-pricing mechanisms and consequent revenue spending for environmental and socio-economic goals. Even though carbon pricing is just one of the instruments needed to achieve climate goals, it provides the complementary benefit of expanding revenues while incentivising a reduction in emissions though market signals. This paper discusses environmental fiscal reforms from the perspective of low- and middle-income countries and development cooperation, with a focus on how to improve the social outcomes of such reforms. While revenues can be recycled for different purposes – including compensating industries with high adaptation costs, further investments in environmental projects and research, and use for the general budget – the paper focusses on social spending. The revenue can be used to decrease poverty and inequality levels and to compensate the poorest for increases in prices by utilising social protection mechanisms. This is particularly important to garner broad societal support and to make environmental fiscal reforms and carbon pricing more socially acceptable and implementable at sufficient levels in more countries. The paper first presents the key features of different carbon-pricing policies and the revenues they can generate, especially for low- and middle-income countries that have limited fiscal space. It then shows how the revenue can be used to fund social protection mechanisms that can compensate the poorest and address distributional concerns. It underlines the gaps and limitations of current social protection programmes, especially in terms of low coverage of vulnerable populations. This also constrained the response to the war in Ukraine, as lower-income countries had to use price stabilisation mechanisms – which ultimately generated negative fiscal and environmental effects – to avoid inflicting greater burdens on the poor instead of providing targeted programmes. The paper also offers some design principles to best address distributional concerns, including sequencing and sectoral coverage. It then discusses the role that development cooperation can have in implementing environmental fiscal reforms in low- and middle-income countries. Overall, the paper suggests that environmental fiscal reforms can be used to achieve resilient societies and accelerate the fight against climate change, with the goal of building a more inclusive and sustainable future. Such reforms should become a priority of German development cooperation and a key lever for its strategic goals, instead of occupying a peripheral role, as it currently does. Most importantly, the analysis strongly underlines the case for environmental fiscal reforms rather than the current use of subsidies and price controls; this is true when considering both climate goals (as keeping prices low does not incentivise shifts in production and consumption) as well as social goals (e.g. cash transfers result in significantly greater levels of poverty and inequality reduction when compared to untargeted subsidies). Therefore, social protection investments are urgently needed, also in lower-income countries. The current energy crisis due to the war in Ukraine and the Covid-19 pandemic has made this clearer.

Socio-ecological transitions need to address the pressing challenges of our time, namely climate change mitigation and social development – including poverty and inequality reduction – in a complementary manner. The importance of achieving resilient and sustainable societies has been made more evident by recent shocks such as the Covid-19 pandemic and the war in Ukraine. As a consequence, national and international development policies need to foster links between social and environmental goals and policies.
One way to achieve such synergies is through environmental fiscal reforms, defined as the combination of carbon-pricing mechanisms and consequent revenue spending for environmental and socio-economic goals. Even though carbon pricing is just one of the instruments needed to achieve climate goals, it provides the complementary benefit of expanding revenues while incentivising a reduction in emissions though market signals. This paper discusses environmental fiscal reforms from the perspective of low- and middle-income countries and development cooperation, with a focus on how to improve the social outcomes of such reforms. While revenues can be recycled for different purposes – including compensating industries with high adaptation costs, further investments in environmental projects and research, and use for the general budget – the paper focusses on social spending. The revenue can be used to decrease poverty and inequality levels and to compensate the poorest for increases in prices by utilising social protection mechanisms. This is particularly important to garner broad societal support and to make environmental fiscal reforms and carbon pricing more socially acceptable and implementable at sufficient levels in more countries. The paper first presents the key features of different carbon-pricing policies and the revenues they can generate, especially for low- and middle-income countries that have limited fiscal space. It then shows how the revenue can be used to fund social protection mechanisms that can compensate the poorest and address distributional concerns. It underlines the gaps and limitations of current social protection programmes, especially in terms of low coverage of vulnerable populations. This also constrained the response to the war in Ukraine, as lower-income countries had to use price stabilisation mechanisms – which ultimately generated negative fiscal and environmental effects – to avoid inflicting greater burdens on the poor instead of providing targeted programmes. The paper also offers some design principles to best address distributional concerns, including sequencing and sectoral coverage. It then discusses the role that development cooperation can have in implementing environmental fiscal reforms in low- and middle-income countries. Overall, the paper suggests that environmental fiscal reforms can be used to achieve resilient societies and accelerate the fight against climate change, with the goal of building a more inclusive and sustainable future. Such reforms should become a priority of German development cooperation and a key lever for its strategic goals, instead of occupying a peripheral role, as it currently does. Most importantly, the analysis strongly underlines the case for environmental fiscal reforms rather than the current use of subsidies and price controls; this is true when considering both climate goals (as keeping prices low does not incentivise shifts in production and consumption) as well as social goals (e.g. cash transfers result in significantly greater levels of poverty and inequality reduction when compared to untargeted subsidies). Therefore, social protection investments are urgently needed, also in lower-income countries. The current energy crisis due to the war in Ukraine and the Covid-19 pandemic has made this clearer.

Socio-ecological transitions need to address the pressing challenges of our time, namely climate change mitigation and social development – including poverty and inequality reduction – in a complementary manner. The importance of achieving resilient and sustainable societies has been made more evident by recent shocks such as the Covid-19 pandemic and the war in Ukraine. As a consequence, national and international development policies need to foster links between social and environmental goals and policies.
One way to achieve such synergies is through environmental fiscal reforms, defined as the combination of carbon-pricing mechanisms and consequent revenue spending for environmental and socio-economic goals. Even though carbon pricing is just one of the instruments needed to achieve climate goals, it provides the complementary benefit of expanding revenues while incentivising a reduction in emissions though market signals. This paper discusses environmental fiscal reforms from the perspective of low- and middle-income countries and development cooperation, with a focus on how to improve the social outcomes of such reforms. While revenues can be recycled for different purposes – including compensating industries with high adaptation costs, further investments in environmental projects and research, and use for the general budget – the paper focusses on social spending. The revenue can be used to decrease poverty and inequality levels and to compensate the poorest for increases in prices by utilising social protection mechanisms. This is particularly important to garner broad societal support and to make environmental fiscal reforms and carbon pricing more socially acceptable and implementable at sufficient levels in more countries. The paper first presents the key features of different carbon-pricing policies and the revenues they can generate, especially for low- and middle-income countries that have limited fiscal space. It then shows how the revenue can be used to fund social protection mechanisms that can compensate the poorest and address distributional concerns. It underlines the gaps and limitations of current social protection programmes, especially in terms of low coverage of vulnerable populations. This also constrained the response to the war in Ukraine, as lower-income countries had to use price stabilisation mechanisms – which ultimately generated negative fiscal and environmental effects – to avoid inflicting greater burdens on the poor instead of providing targeted programmes. The paper also offers some design principles to best address distributional concerns, including sequencing and sectoral coverage. It then discusses the role that development cooperation can have in implementing environmental fiscal reforms in low- and middle-income countries. Overall, the paper suggests that environmental fiscal reforms can be used to achieve resilient societies and accelerate the fight against climate change, with the goal of building a more inclusive and sustainable future. Such reforms should become a priority of German development cooperation and a key lever for its strategic goals, instead of occupying a peripheral role, as it currently does. Most importantly, the analysis strongly underlines the case for environmental fiscal reforms rather than the current use of subsidies and price controls; this is true when considering both climate goals (as keeping prices low does not incentivise shifts in production and consumption) as well as social goals (e.g. cash transfers result in significantly greater levels of poverty and inequality reduction when compared to untargeted subsidies). Therefore, social protection investments are urgently needed, also in lower-income countries. The current energy crisis due to the war in Ukraine and the Covid-19 pandemic has made this clearer.

During the formulation of the 2030 Agenda for Sustainable Development, many promoted policy coherence as a key tool to ensure achievement of the Sustainable Development Goals (SDGs) in a way that “leaves no one behind.” Their argument assumed that coherent policymaking contributes to more effective policies and supports over-arching efforts to reduce inequality. As the 2030 Agenda reaches the halfway point, however, countries are falling short on many SDGs, particularly SDG 10 (reduce inequality). This study revisits the basic assumptions about policy coherence underpinning the SDGs. We systematically screened the peer-reviewed literature to identify 40 studies that provide evidence about whether coherent policymaking contributes to more effective outcomes and helps to reduce inequality. We find that coherent policymaking did not help reduce inequality in a majority of cases and made it worse in several. Our findings challenge the narrative that coherence is a necessary pre-condition for progress on the SDGs for all people.

During the formulation of the 2030 Agenda for Sustainable Development, many promoted policy coherence as a key tool to ensure achievement of the Sustainable Development Goals (SDGs) in a way that “leaves no one behind.” Their argument assumed that coherent policymaking contributes to more effective policies and supports over-arching efforts to reduce inequality. As the 2030 Agenda reaches the halfway point, however, countries are falling short on many SDGs, particularly SDG 10 (reduce inequality). This study revisits the basic assumptions about policy coherence underpinning the SDGs. We systematically screened the peer-reviewed literature to identify 40 studies that provide evidence about whether coherent policymaking contributes to more effective outcomes and helps to reduce inequality. We find that coherent policymaking did not help reduce inequality in a majority of cases and made it worse in several. Our findings challenge the narrative that coherence is a necessary pre-condition for progress on the SDGs for all people.

During the formulation of the 2030 Agenda for Sustainable Development, many promoted policy coherence as a key tool to ensure achievement of the Sustainable Development Goals (SDGs) in a way that “leaves no one behind.” Their argument assumed that coherent policymaking contributes to more effective policies and supports over-arching efforts to reduce inequality. As the 2030 Agenda reaches the halfway point, however, countries are falling short on many SDGs, particularly SDG 10 (reduce inequality). This study revisits the basic assumptions about policy coherence underpinning the SDGs. We systematically screened the peer-reviewed literature to identify 40 studies that provide evidence about whether coherent policymaking contributes to more effective outcomes and helps to reduce inequality. We find that coherent policymaking did not help reduce inequality in a majority of cases and made it worse in several. Our findings challenge the narrative that coherence is a necessary pre-condition for progress on the SDGs for all people.

Climate change poses threats to individuals, communities, and cities globally. Global conversations and scholarly debates have explored ways people adapt to the impacts of climate change including through migration and relocation. This study uses Lagos, Nigeria as a case study to examine the relationship between flooding events, migration intentions as a preferred adaptation, and the destination choices for affected residents. The study draws on a mixed-methods approach which involved a survey of 352 residents and semi-structured interviews with 21 residents. We use a capability approach to analyze mobility decisions following major or repetitive flood events. We found that the majority of affected residents are willing to migrate but the ability to do so is constrained by economic, social, and political factors leading to involuntary immobility. Furthermore, intra-city relocation is preferred to migration to other states in Nigeria or internationally. These findings challenge popular Global South-North migration narratives. Indeed, some residents welcome government-supported relocation plans but others remain skeptical due to lack of trust. Community-based relocation may therefore be preferred by some Lagosians. Overall, this study contributes a nuanced understanding of mobility intentions in response to climate-induced flooding in one of the world’s largest coastal cities.

Climate change poses threats to individuals, communities, and cities globally. Global conversations and scholarly debates have explored ways people adapt to the impacts of climate change including through migration and relocation. This study uses Lagos, Nigeria as a case study to examine the relationship between flooding events, migration intentions as a preferred adaptation, and the destination choices for affected residents. The study draws on a mixed-methods approach which involved a survey of 352 residents and semi-structured interviews with 21 residents. We use a capability approach to analyze mobility decisions following major or repetitive flood events. We found that the majority of affected residents are willing to migrate but the ability to do so is constrained by economic, social, and political factors leading to involuntary immobility. Furthermore, intra-city relocation is preferred to migration to other states in Nigeria or internationally. These findings challenge popular Global South-North migration narratives. Indeed, some residents welcome government-supported relocation plans but others remain skeptical due to lack of trust. Community-based relocation may therefore be preferred by some Lagosians. Overall, this study contributes a nuanced understanding of mobility intentions in response to climate-induced flooding in one of the world’s largest coastal cities.