Global economy

Mispricing Argentine soybean exports

Reform, Renegotiation and Referendum

The UK stands on the brink of a momentous decision: whether to leave or remain in the European Union. Unlike all the other states that have sought late entry to the EU, the UK did not hold a referendum on whether to join in 1973: the decision was taken on the basis of a parliamentary vote. However, in 1975 voters were asked whether they wished to stay in the European Community, and a strong vote to remain was thought to have resolved the matter. However, in 2013, divisions within the Conservative Party led Prime Minister David Cameron to promise to engage in reform of the EU and to renegotiate the UK’s terms of membership before holding a referendum on whether to stay in. It was a high-risk, high-stakes proposition. Cameron must persuade his party, the British lectorate and his partners in the other EU member states of the merits of his case. The negotiation covers four areas of concern for the UK: economic governance, competitiveness, sovereignty, and immigration. To some British Eurosceptics, the emands seem woefully inadequate; to fellow EU leaders, they pose significant difficulties. The formal negotiations began in late 2015, after months of exploratory talks with the other member states, and are expected to be completed by the end of February, with the referendum coming as early as June 2016. While those who seek to leave the EU have been honing their arguments at least since the 1993 Maastricht Treaty, just that they envisage leaving the EU to look like is unclear. Brexit could take many forms, representing a journey to an unknown destination.

Policy options for sustainability and resilience in potato value chains in Bihar: a system dynamics approach

Potatoes are an important crop for food security in Bihar, providing significant income generating activities for participating farmers and an additional source of diet diversification for consumers. Recent reforms to the Agriculture Production Market Committee (APMC) Act and improvements in state-wide governance have provided further incentives for investment in the potato sector, particularly in cold storage facilities that can mitigate seasonal price fluctuations and improve the availability of potatoes. At the same time, climate change could have severe ramifications on the potato sector in Bihar, with some forecasts redicting a decline in yields of over 20 percent in the coming decades. In this paper, we look at the quantitative impacts over time of different investment, trade, and policy scenarios in the potato value chain, particularly those that can mitigate climate change effects, using a system dynamics model of the potato value chain that builds on previous qualitative studies (e.g. Minten et al. 2011). Preliminary results highlight that reducing storage costs, either through subsidies or increased competition, could reduce the price variability inherent with climatic shocks. On the other hand, encouraging conventional types of cold storage could have additional feedback effects that exacerbate climatic shocks, suggesting a need to consider “climate-smart” investments.

Norden og Kina: «Smått er godt» Islands økonomiske diplomati med Kina.

Although Iceland has a shorter diplomatic history with China in comparison with the other Nordic states, the island nation has built a strong relationship with Beijing which has been dominated by economics, especially the bilateral free trade agreement struck in 2013. Although Iceland is not a major factor in Chinese trade, the Sino-Icelandic relationship has demonstrated China’s commitment to small state diplomacy and Arctic relations.

European Integration Reset: Lessons from Brexit, Norway, and Eastern Europe

Given the severity and length of the Great Recession, whether or not Europe needs more or less integration is a much less consequential discussion than that Europe needs better and more effective integration. In this policy brief, we argue that taking stock of the integration experience may be the key to support the search for novel and more effective policy initiatives, resume growth and leave the current crisis behind. The brief presents three historical examples that illustrate the power deep integration has had in propelling the European project. The first demonstrates how deep integration contributed significantly to stop the relative economic decline of the United Kingdom (UK) vis-à-vis the EU founding members. We suggest EU membership played a greater role in this respect than Thatcher’s reforms. The second example displays how deep integration drove increases in labor productivity in Sweden, Austria and Finland (which gained unrestricted access to the Single Market by joining the European Economic Area, EEA, in 1994 and later the EU in 1995) compared to similar developments in Norway (which joined only the EEA in 1994). The third example draws from the experience of the Central European new member members to illustrate that a crucial (yet less appreciated than trade openness, foreign investment and migration) mechanism to these advancements has been the ability of deep integration to increase State capacity and hence to shore up positive institutional change.

Towards a new innovation policy in Cuba: Proposal for the introduction of a R&D fiscal incentive program