Global economy

The Political Economy of Russian Aluminium. Between the Dual State and Global Markets

This book addresses how the progress of the Russian aluminium industry, which has developed into an important global actor, has been influenced by the interaction of global market forces and the evolution of the Russian political system. After the collapse of the Soviet Union, Russian aluminium producers needed to adapt to changing framework conditions, both with regards to the global aluminium market and in Russia. Examining the most important changes in the organization of the global aluminium trade – the reorganization and consolidation of Russian aluminium industry and its ‘oligarchization’ – Godzimirski charts the evolution of the relationship between political and economic power in Russia, and the impact that this development has had on survival and adaptation strategies of key aluminium players in the country.

The networks and niches of international political economy

This article analyzes the organizational logics of how social clustering operates within International Political Economy (IPE). Using a variety of new data on IPE publishing, teaching, and conference attendance, the authors use network analysis and community detection to understand social clustering within the field. They find that when it comes to publishing and intellectual engagement, IPE is highly pluralistic and driven by a logic of ‘niche proliferation’. Teaching IPE, however, is characterized by a ‘reduction to polarity’ that emphasizes a dualism in ontological and epistemological frames. In the face of competitive exclusion pressures, intellectual communities regenerate themselves by constructing niches while simultaneously nodding to a common tradition.

Afghanistan: A Political Economy Analysis

This report provides a comprehensive analysis of the current state of Afghanistan, arguing that the Afghan state is fragile, and sustained through constant negotiations over power, resources and ideology. What began as a radical state-building and democratization project in 2001 was soon captured by elites. Some of which engages in semi-formal and informal governance structures to further their influence. Distribution of state revenue, largely from external donors, has been used to secure loyalty and maintain control. This has contributed to extreme state centralization, hampered development of state institutions, failed justice sector reforms, high levels of corruption and reduced government legitimacy, and lately an increase in poverty. On the positive side, access to education and health services has improved, partly due to the strong emphasis placed on the rights of women. The security situation has deteriorated since 2014. At present the government control less than 60 percent of the country and civilian causalities are steadily increasing. Conflicts in Afghanistan are exacerbated by the involvement of its neighbors. To improve security, as well as economic and social development, a negotiated peace settlement is needed. If the conflict is left unresolved (in fear of regional and international security concerns), a slow and steady deterioration of security, and economic and social development, is to be expected.

Customs-brokers as facilitators in international trade

Recent studies suggest that firms can reduce fixed trade costs by hiring intermediaries like trading companies. I argue that customs brokers – a type of intermediary rarely studied in economics before – can play a similar role. Using panel data of Norwegian trade transactions, I show that such brokers are commonly used to clear goods through customs. I find indications of lower sunk costs as well as fixed trade costs for firms that hire such services. However, engaging brokers can be risky, and traders in high-risk products like food are more likely to self-declare. Results are similar for importing and exporting, indicating that customs brokers facilitate both modes of trade.

The ABCs of Financial Education: Experimental Evidence on Attitudes, Behavior, and Cognitive Biases

This paper employs a large-scale field experiment in India to study the attitudinal, behavioral, and cognitive constraints that may stymie the link between financial education and financial outcomes. Our research design combines financial education with (1) monetary incentives for correct answers to a financial knowledge test; (2) financial goal setting; and (3) personalized financial counseling. We find no effects of cash incentives on participants’ financial knowledge, but significant effects of both goal setting and counseling on real financial outcomes. In particular, combining goal setting with financial education encouraged relatively simple follow-up actions such as writing a budget or starting informal savings. Counseling, in turn, enabled the poor to undertake costlier or more difficult financial activities, including opening a formal bank savings account. Together, these findings identify important complements to financial education that may successfully bridge the gap between financial knowledge and behavior change.

Nepal: A Political Economy Analysis

This report is an integrated political economy analysis of Nepal. The main finding is that economic growth and poverty reduction have been steady in Nepal since the mid-1980s independently of a number of political upheavals, including ten years of civil war. The growth has been driven by remittances and an upward pressure on wages in local labor markets. As a result, poverty has declined and social indicators have improved. Despite the availability of private capital and increases in wages for the poor, there is still a massive need for public investments in infrastructure, agriculture, health, and education. In the political domain the recent local elections will reintroduce local democracy after 20 years. Elected local politicians are expected to boost local development efforts. The leading political forces in Nepal are the political parties. There are close links between politicians and business leaders, the political parties control the trade-unions, have links to civil society organizations, and the parties select high-level government officials. The civil war and the post-war ethnic uprising led to demands for an ethnic based federal republic. A compromise federal map was decided in 2015, with provincial elections scheduled for the fall of 2017. There are concerns that the ethnic agenda may escalate ethnic conflicts, and it will be essential for all parties to work for participation of all social groups within the recently established local units, as well as in the economy at large.

Mali: A Political Economy Analysis

Handelspolitikken under Trump

(Available in Norwegian only): Rapporten analyserer USAs handelspolitikk under president Trump, nærmere ett år etter Trumps valgseier. Trumps handelspolitikk innebærer slutten på 70 år med USA i ledelsen for det globale handelssystemet. Trumps politikk er fortsatt i utvikling, og bare ¼ av nøkkelstillingene i Trumps administrasjon er besatt. Trumps handelspolitikk er i noen grad en fortsettelse av en trend som har vært synlig det siste tiåret, med gryende polarisering mellom USA og Kina, og strid om hvor bindende det internasjonale samarbeidet i WTO (Verdens Handelsorganisasjon) skal være. Trumps handelspolitikk hviler på en forenklet analyse av USAs handelsunderskudd der handelsavtalene gis skylden; og en tilhørende aggressiv handelspolitikk det handelsavtaler skal reforhandles for å redusere det amerikanske handelsunderskuddet. Analysen gir støtte til at ubalanserte handelsavtaler kan ramme arbeidsplassene, og at ubalansert handel er et problem som bør tas mer alvorlig i handelslitteraturen. Kinas har også satt vestlig industri under press, men dette skyldes Kinas vekst snarere enn handelsavtalene. Balanserte handelsavtaler kan gi både arbeidsplasser og billigere import, og er derfor oftest en del av løsningen snarere enn problemet. Ved å bygge på handelsavtalene kan man dessuten utvikle globale regelverk som skaper like vilkår i den globale konkurransen. I motsetning til sine forgjengere kan Trump komme til å bryte med det internasjonale handelssystemet og svekke internasjonalt samarbeid. Trumps økonomiske nasjonalisme kan være til skade for både handelspartnere og det globale handelssystemet. I tillegg kan USA komme til å skyte seg selv i foten fordi proteksjonismen kan ha en betydelig kostnad; spesielt i en tid med omfattende internasjonale verdikjeder.