Browsing by Subject "Institutions"

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Agricultural sciences in upland Northern Vietnam : situating research in a dynamic environment
(2006) Friederichsen, Rupert
This paper aims to provide an introductory overview over the socio-cultural context of Northern Vietnam to agricultural researchers. The paper focuses on the interplay between Vietnam?s lowlands and the uplands to specify what makes the Northern uplands a distinct region; as an object of empirical agricultural research and as a context of application of research results. The paper reviews the developments of selected social institutions from pre-colonial times to the current era of ?renovation?. First, developments in Vietnam?s legal and administrative structures are outlined. Second, education and higher education, particularly the agricultural sciences, are discussed. The third and main part elaborates on social, political, and economic specifics of the Northern Uplands. It is suggested that the relationship between formal and informal institutions is crucial for understanding the dynamics of contemporary uplands Vietnam, particularly in the given multi-cultural situation.
Farming forest enclosures : contestations, practices and implications for tackling deforestation in Ghana
(2022) Kumeh, Eric Mensah; Birner, Regina
Scientists and policymakers are waking to the menacing impacts of deforestation on biodiversity and the livelihoods of the over one billion people reliant on forests. Concurrently, an upward trend in population and its corresponding rise in the global demand for feed, food, fuel, and fibre exerts new demands on limited land resources available to multiple stakeholders. As the competition over land intensifies, many farmers in the tropics employ several strategies to cultivate areas designated as forest reserves for their livelihoods, leading to further deforestation and conflicts with state forestry agencies. Moreover, despite decades of investments in institutions to directly fund smallholder farmers’ participation in rehabilitating deforested landscapes, little is known about the reach and performance of existing financial incentive mechanisms. This dissertation adds to filling these knowledge gaps based on qualitative case studies embedded in multiple analytical and data collection approaches in Ghana, which loses near 2% (135,000 ha) of its forests annually despite several efforts to overcome the challenge. Following a brief introduction and clarification of conceptual underpinning in Chapter 1, the knowledge gaps are addressed with three empirical publications (chapters 2-4). Chapter two examines why and how farmers in forest communities gain and secure access to their farmlands within forest reserves to produce food and cash crops against state law. Through process-net maps, focus group discussions, interviews, and field observation, data were gathered through an extended field stay in Ghana’s Juabeso district. The findings unbridle the multiple structural and relational mechanisms farmers apply to evade state attempts to rein in illegal farming in the area and how institutional deficiencies, notably corruption and elite capture of farming benefits by native chiefs, reinforce farming in forest reserves. The chapter discusses the broader implications of the findings for the Ghanaian government’s attempts to accelerate forest landscape rehabilitation, noting that such efforts will need to adapt to the multiple struggles and latent actor interests to succeed. Chapter three disentangles the narratives and experiences of forest communities and compares them with the current assumptions underlying forest policy in Ghana from the perspective of the most dominant forest policy actors. The results contend with current assumptions that portray forest communities as environmentally destructive. Alternatively, it reveals that while several factors combine to drive forest-dependent communities to cultivate forest reserves, the challenge of food insecurity is paramount but unconveyed to the forest policy arena. The chapter proposes a novel concept of food security corridors (FSCs) as a meta-narrative for harmonising competing actor interests in forest reserves. The chapter also discusses the feasibility of FSCs and calls for further efforts to refine and pilot the concept in the global search for solutions to forest and agriculture land-use conflicts in the tropics. Chapter four examines the governance of Ghana’s Forest Plantation Development Fund as an incentive system instituted to attract smallholders into landscape rehabilitation based on interviews with tree growers, forestry officials and NGO staff. The study revealed that the legal provisions instituted to ensure the fund’s transparent operation were not implemented by fund administrators. Many stakeholders were clueless about the Fund and could neither access nor demand accountability in its administration. The chapter clarifies the information needs of various fund stakeholders, such as eligibility criteria, funding cycles, annual inflows and outflows, and a list of beneficiaries. It also discusses the implications of the findings, including mechanisms required to trigger the transparent running of the fund by its administrators. The thesis reveals new patterns of perennial land competition between state and traditional institutions. It demonstrates how prevailing institutional challenges reinforce this competition and enable unsustainable land use to flourish. At the same, it points to lapses in governance, including state failure to evolve its forest policies to meet changing demands and needs among contemporary actors and how the same challenges curtail access and ability to support forestation rehabilitation efforts in Ghana. Overall, the thesis notes that while tackling farming in forest reserves can be challenging due to its multiple drivers and the competing actor interests, FSCs have the potential to serve as an entry point that enables government and other actors to resolve their differences and find lasting solutions that enable local communities to achieve their livelihoods needs while contributing to sustainable land use. However, for this potential to be realised, actors need to invest in refining and piloting FSCs in specific localities.
Gender and equity in market-based environmental programs : case studies from Kenya
(2016) Kariuki, Juliet; Birner, Regina
Reconciling global environmental goals with local community needs has been the focus of conservation approaches for several decades now; however scant attention has been paid to the role of gendered – men’s and women’s - dynamics within these environmental contexts. Although well-intentioned, the tendency has been to direct practical attention to only women, which offers an inadequate account of the gender-differentiated access to, and control over natural resources. Against this background, the objective of this thesis is to analyse how formal and informal institutions interact with the design of market-based environmental programs to influence gender and equity outcomes. Payments for Ecosystem Services (PES), a new addition to the suite of environmental conservation approaches, are market-based instruments that include “Reduced Emissions from Deforestation and Forest Degradation - plus - sustainable management of forests, conservation of forest carbon stocks and enhancement of forest carbon stocks” (REDD+). PES/REDD+ are considered promising tools that reward resource users financially or in-kind, on the condition that conservation of natural resources and/or a reduction in carbon emissions is achieved through the adoption of stipulated resource-use regulations. PES/REDD+ programs are therefore heralded for their ‘win-win’ potential to overcome the flaws of previous coercive state-led and community-based approaches. The case studies analyse four PES/REDD+ programs in Kenya, namely the Kitengela Wildlife Lease Program, the Mara North Conservancy, the Kasigau Corridor REDD+ Project and Imbirikani Group Ranch. The study sites host mainly pastoral and agro-pastoral communities and are adjacent to some of the most prominent protected areas in the country. The thesis concludes that more attention to the historical processes leading up to PES/REDD+ establishment is required if more equitable outcomes are to be achieved. Deliberate efforts by implementing agencies that consider the multi-dimensional nature of equity can play a crucial role in addressing distributional and procedural equity, especially in contexts where land is unevenly distributed. However, as secure land tenure is not the only determinant of equity outcomes, the study advocates for a nuanced understanding of gendered norms in an effort to contribute to selecting suitable gender strategies for PES/REDD+ programs. Ultimately, greater effort is also required to challenge prevailing—yet flawed—gender discourses if participation in, and benefits from PES/REDD+ are to become more gender balanced.
Microeconomic impacts of institutional transformation in Vietnam?s Northern uplands : empirical studies on social capital, land and credit institutions
(2012) Saint-Macary, Camille; Zeller, Manfred
Vietnam's economic achievement over the last two decades is frequently regarded as a successful case of development. The Doi Moi reform program enacted in 1986 gradually led the transition from a centrally-planned to a market-oriented economy. In rural areas, reforms entailed a deep transformation of institutions and were aimed at placing back farmers at the center of decision making as a way to boost agricultural production and alleviate poverty. Agricultural markets were gradually liberalized, user rights were transferred to smallholder farmers for most of the agricultural land, and anti-poverty programs were implemented. At the national level, the high economic growths in all sectors of the economy have permitted a drastic reduction of poverty. These successes however did not take place evenly through the country. Mountainous regions and its inhabitants have lagged behind in the process. The poverty incidence in the Northern Uplands was still twice as large in 2008 than in the rest of the country. In addition, the rapid population growth combined with the intensification and expansion of agricultural systems into fragile ecosystems have considerably increased pressure on natural resources. This accentuates the risk for resource-based economies such as Vietnam?s mountainous regions to get trapped in a vicious circle whereby environmental degradation and poverty mutually reinforce each other and durably undermine economic development. The existence of complex relations between poverty and environmental degradation in fragile ecosystems implies that equity, economic growth and environmental sustainability cannot be treated as separate objectives but must jointly be addressed to ensure sustainable development. Drawing on a conceptual framework that highlights the determinant role of institutions in the poverty-environment nexus, this thesis investigates to which extent the current institutional framework addresses objectives of equity, economic growth and environmental sustainability. It focuses on three critical dimensions: the definition of property rights, the functioning of intertemporal markets, and social capital. More specifically, the thesis addresses the following research questions: (i) Has the individualization of land access and land titling policy enhanced tenure security, and thereby increased the adoption of soil conservation practices? (ii) Has a land market emerged in the study area? (iii) Is the credit market equitable and efficient? Does state intervention induce a more equitable and efficient allocation than other sectors? (iv) Does ethnic diversity undermine collective action and the formation of social networks? These questions are investigated empirically in the six chapters of this thesis. Analyses build on a rich and primary quantitative household- and village-level dataset collected in 2007/2008 in Yen Chau, a mountainous district of the Northern Upland region, as well as on qualitative information gathered in the field through focus group discussions and informal discussions with local stakeholders. Successes of the land reform lie in its egalitarian character which enables most farmers to cultivate land with long term user rights. Yet, results show that tenure security is not fully guaranteed and land reallocations conducted by the government as well as its indecision regarding the prolongation of land use rights at the end of their term have created mistrust and uncertainty. The incertitude is found to impede the adoption of soil conservation technologies and to hamper the land market, depriving the local economy from potentially important equity and efficiency gains, and threatening environmental sustainability. The credit market, thanks to good levels of social capital, is found to function relatively well and enable all farmers including the poor to finance agricultural input and consumption through loans. The state-governed formal sector, despite offering competitive contract terms remains a secondary credit source, particularly for the poor. The costly micro-credit program of the government fails to reach the poor and is found to have only limited impact on welfare. This inefficiency causes an important leakage of state resources. Finally, we do not find as predicted by the literature, that ethnic heterogeneity undermines participation in local organizations and the formation of social networks. This impact appears to depend on the political nature of organizations, and the public nature of goods managed. Moreover, evidence shows that heterogeneity encourages bridging connections among farmers and constitutes as such a factor that can foster innovations and economic development. The contributions of this thesis are twofold. First, it identifies sources of success and failure in the current institutional framework to promote sustainable development in Vietnam?s mountainous areas from which we derive policy recommendations. Evidence in this thesis highlights limitations of the top-down approach that dominates public intervention in mountainous areas. These interventions are usually costly and not always successful in enhancing equity, efficiency and the environmental sustainability of resource use. This stresses the need for the Vietnamese government to further enhance the functioning of incentive-based mechanisms in the economy as a complement to current policies. In this perspective, the clarification of the land reform objectives, the development of a land market, the promotion of independent and financially sustainable financial institutions, the reinforcement of the legal system, and the support of the emergence of an independent civil society are all measures that may support sustainable development in Vietnam?s mountainous regions.
North-South trade agreements and the quality of institutions: panel data evidence
(2018) Schneider, Sophie Therese
Since 1990, not only the number of signed preferential trade agreements (PTAs) has increased, but also their depth. That means, PTAs include comprehensive rules, which go way beyond tariff reductions, such as property rights, competition or investment provisions. This paper argues that especially in North-South agreements there is a diffusion of institutional quality from developed to developing countries. First, a PTA may affect institutions because it can serve as a network for political exchange and second, the regulations and commitments stipulated in it may affect local institutions in the South. I empirically investigate if there are positive effects of being a member in a PTA on the quality of institutions in developing countries by accounting for the number and the depth of PTAs using the Design of Trade Agreements (DESTA) database, established by Dür, Baccini and Elsig (2014). I create a large panel data set covering 32 years to account for endogeneity of several controls. The results support the hypothesis that deep PTAs lead to an improved quality of institutions in the South. The results differ with respect to the type of agreement and region.
Political implications of economic inequality : a literature survey
(2019) Geiger, Niels; Baric, Laura-Kristin
This survey documents the different arguments discussed in the academic literature on whether and how economic inequality and the emergence and stability of democratic political systems are connected. While early research in this domain has often focused on new and emerging democracies, this paper also provides an overview of the more recent literature in economics and neighboring fields that discusses democratization as well as established democracies’ stability and other institutional traits. In doing so, the survey contains a critical review of both theoretical and empirical contributions on the topic. The different arguments are systematically evaluated and their core hypotheses are distilled in order to document the main lines of argumentation prevalent in the literature. Together with a summary of the theoretical arguments, the main findings of related empirical research are also documented and shortly discussed. Whereas taken together, research so far generally does not suggest any conclusive results concerning economic inequality and the emergence of democracies, the survey indicates that the stability and institutional quality of established democracies can be negatively affected by economic inequality, and it outlines the conditions for this to occur. However, additional research especially on some of the more tentative hypotheses is required to allow for a more profound understanding of the different channels and relationships. Therefore, points of departure for further research, e. g. on how to operationalize specific theoretical constructs of interest and thereby on how to get a better understanding of the relations, are also suggested.
Stylized facts of the business cycle : universal phenomenon, or institutionally determined?
(2015) Kufenko, Vadim; Geiger, Niels
This paper empirically investigates and theoretically reflects on the generality of the “stylized facts” discussed in business cycle analysis. Using OECD data for 1960–2010, the duration of business cycles as well as three models capturing core macroeconomic relations are estimated: based on the Phillips curve (the inflation-unemployment nexus), Okun’s law (in the context of the relation between output growth and unemployment) and the inflation-output relation. Results are validated by relevant statistical tests. Observed durations vary from 4 to 8 years, and estimated coefficients differ in signs and magnitudes. Bearing these substantial variations in mind, an explanation of this heterogeneity is attempted by referring to proxies for various institutional variables for the goods, labour and money markets. The findings suggest that core coefficients in the relations, such as the slope of the Phillips curve, show significant correlation with some of these variables, but no uniform results are obtained. In the detailed theoretical discussion and interpretation it is thus argued that the notable differences between countries call the universality of the “stylized facts” into question, but also that these variations cannot be explained exhaustively by the institutional proxy variables employed here.
The formal-informal economy dualism in a retrospective of economic thought since the 1940s
(2015) Clement, Christine
Central to the scientific debate about the ‘informal sector’ and the validity of the concept used to be a twofold challenge. The crux laid not only in the objective to explain the widely visible persistence of the informal economy in developing countries, but also in the identification of its roots and the proliferation conditions to be met ex ante. The present paper aims at establishing a link between the theories on informality and marginalization which is another important issue that has arisen within the discussions on the causes of persistent poverty a few years ago. Both concepts are interlinked and self-enforcing. On the macroeconomic level, any economy – be it formal or informal – consists of a set of different economic sectors and any of these sectors basically consists of an accumulation of people on the microeconomic level. Every time one looks at the macro level where political and economic conditions frame the dynamics of the formal and the informal economy, one has at the same time to look at the micro-level where the social and economic conditions determine the incentives for every actor to participate either in the formal, the informal or in both economies. Informality has multiple sources depending on whether the agent took a voluntary choice or had to involuntary opt-out from an institutional system. In this paper, the connection between informality and involuntary exclusion shall be examined in a retrospective of economic thought since the 1940s. The roots of the intertwined concepts of informality and economic exclusion have been laid in the dual economy theories of the 1940s-1950s. Recapitulating the works of Julius BOEKE, Arthur LEWIS, John HARRIS & Michael TODARO, Albert HIRSCHMAN and other socio-economists of that time, it will be argued that one of the necessary reasons for the persistence of the informal economy in developing countries is the dualism in institutional frameworks that leads to the marginalization of social groups and their subsequent exclusion from formal economic activities. By referring to the groundbreaking Africa studies of Keith HART (1971) and the INTERNATIONAL LABOUR ORGANIZATION (1972), special emphasis will be given to the causal reciprocity between informality, marginalization and economic exclusion. The paper closes with a brief overview of current schools of thought that deal very differently with the issue of informality and economic exclusion.
The impact of formal and informal institutions on per capita income
(2009) Dobler, Constanze
Despite the many approaches of neoclassical and endogenous growth theory, economists still face problems explaining the reasons for income differences between countries. Institutional economics and the deep determinants of growth literature try to depart from pure economic facts to examine economic development. Therefore, this article analyses the impact of institutions, geography and integration on per capita income. Concerning theoretical reasoning, emphasis is on the emergence of institutions and their effect on economic growth. However, institutions can appear in different shapes since political, legal and economic restrictions are not the only constraints on human behaviour. Norms and values also limit possible actions. Therefore, a differentiation between formal and informal institutions is made. The regression results affirm a crucial role of informal and formal institutionsconcerning economic development.
The impact on institutions, culture and religion on per capita income
(2009) Dobler, Constanze
Despite many approaches of neoclassical and endogenous growth theory, economists still face problems in explaining the reasons for income differences between countries. Institutional economics and the deep determinants of growth literature try to depart from pure economic facts to examine economic development. Therefore, this article analyzes the impact of institutions, geography, and integration on per capita income. Concerning theoretical reasoning, emphasis is on the emergence of institutions and their effect on economic growth. However, institutions can appear in different shapes since political, legal, and economic restrictions are not the only constraints on human behaviour. Norms and values also limit possible actions. Therefore, a differentiation between formal and informal institutions is made. Informal institutions are defined as beliefs, attitudes, moral, conventions, and codes of conduct. Property rights are assumed to be the basic formal institutional feature for economic success. Despite their direct impact on growth through individual utility maximization, property rights also make a statement concerning the political and legal environment of a country. Regarding the regression analysis, different religious affiliations are used as instrumental variables for formal and informal institutions. The regression results affirm a crucial role of informal and formal institutions concerning economic development. However, a high proportion of Protestant citizens encourage informal institutions that support economic growth, while a high Muslim proportion of the population is negatively correlated with growth-supporting formal institutions.
The role of informal institutions in agricultural development : case studies from Kenya, Pakistan and Malawi
(2017) Aberman, Noora-Lisa; Birner, Regina
Why have so many countries lagged behind in terms of agricultural development, structural transformation and poverty alleviation? This thesis is based on the proposition that a lack of attention to institutions and governance is partly responsible for the limited success in meeting food security and development goals in many developing countries, in spite of significant investments in agricultural development. In particular, the interplay between formal and informal intuitions has not been thoroughly explored, in part because this interplay is not well captured in the quantitative analytical approaches that dominate the literature on agricultural development. Informal and non-market institutions play an important role especially in early phases of agricultural development. Therefore, a better understanding of informal institutions and their interaction with formal institutions is expected to provide valuable insights on how to facilitate agricultural development more effectively and to better use its potential to promote food security, and poverty reduction. Institutions can be defined as the socially constructed formal and informal rules that constrain human behaviour and provide the framework of incentives that shapes economic, social and political life. In the literature on agricultural development, institutional analysis typically builds on the theory of neoclassical economics and draws on its analytical tools, but it appears useful to explore theoretical approaches developed in other branches of the social sciences and to apply their methodological approaches to analyse the role of institutions in agricultural development. Qualitative methods are particularly promising to provide new insights into the role of institutions in agricultural development, in particular with regard to informal institutions. The main objective of this thesis is the development and application of novel methodological approaches to analysing the interplay of informal and formal institutions in agricultural development. The thesis is based on four case studies conducted in three developing countries: Malawi, Pakistan and Kenya. The case studies deal with three selected themes of institutional development in agriculture, where the interplay of formal and informal institutions is particular important. Two themes relate to specific sub-sectors of agriculture: institutions for managing irrigation systems and institutions that facilitate agricultural exports. The third theme is cross-cutting and addresses the question how gender equity can be promoted in institutions that matter for agricultural development. Considering that institutions are nested, the case studies cover different levels, including the household, farmer group, local government and national government level. Together the case studies provide insights on how institutional analysis—with an emphasis on social institutions, informal rules, perceptions, and norms—affect agricultural development initiatives. The case studies make use of methodological approaches that are relatively novel in the field of agricultural development studies and thus serve to broaden the toolkit of methods for institutional analysis. These methods include two versions of a participatory mapping tool called Net-Map and Process Net-Map. As a third approach, qualitative interviews with the inclusion of tactile power mapping exercises have been applied. As the case studies cover different levels, the data collection methods have been applied with a wide range of participants that had highly diverse social and educational backgrounds, ranging from national-level policy actors to farmers residing in remote areas. Epistemologically, these methods support a social constructionist research approach, wherein the informal and socially constructed aspects of agricultural policy and governance can be assessed. Four distinct case studies are presented here, from Kenya, Pakistan and Malawi. Taken together, the case studies show that in a developing country context, the informal rules (described as “rules-in-play”), which are based on social norms, often play a more significant role in guiding the behaviour of economic actors than the formal rules and regulations of the state. Thus, the consideration of social norms is critical when devising policy reform strategies, devolution processes, and addressing corruption. The studies identified the following factors, which should be considered when undertaking policy development or policy reform: a) the capacity of the government to enforce rules and laws; b) social norms that determine the extent to which rules-are followed; and c) the impact of additional rules that aim to promote compliance on transaction costs. The case studies also provide insights on the role of that informal institutions play with regard to gender, power and community groups. The findings indicate that gender norms are slowly changing even in the remote area of Kenya where the case studies were conducted, which is confirmed by other empirical work. The findings indicate that such change is very slow due to internal societal pressures against it. However, a better understanding of when and how informal institutions are changing provides entry points for action. The studies indicate that there is a potential for community groups to serve as a parallel institution to that of the home, governed by constitutions and by-laws, that do enable women to push the boundaries of community gender norms, although both are embedded in the same community. And although gendered participation in groups is mixed, there are drivers that can be supported to flourish by development partners and government.
The role of institutions and networks in developing the bioeconomy : case studies from Ghana and Brazil
(2019) Scheiterle, Lilli; Birner, Regina
An increasing number of countries have begun putting focus on developing a bioeconomy strategy. The bioeconomy provides a new concept with the aim to design a sustainable economy, which is knowledge-based and based on the use of biological resources. This entails on the one hand higher production of biomass and on the other tighter networks of traditional, national and international institutions. Institutional networks are pivotal for the sustainable production and use of biological resources, as well for the development of innovative biological processes and principles to exploit the potential of biomass. This thesis explores three pivotal aspects needed to take advantage of the considerable untapped potential of the bioeconomy. The first case study aims to identify the determinants of the persisting low maize yields in northern Ghana, despite the introduction of a fertilizer subsidy program. The policy is largely regarded as an instrument to increase crop productivity and contribute to food security. The second empirical study explores the role of female-led market institutions in Ghana. Marketing is central to the development of the bioeconomy and as such, trader organizations have a key role to play the value chain. The third case study investigates, taking sugarcane as a case study example, how well Brazil, the world’s leader in sugarcane production, is positioned to realize the shift from a fossil-based to a bio-based economy (bioeconomy). The two case study countries Ghana and Brazil were chosen because of their comparable net primary productivity and pedo-climatic conditions, and because of their different stages in the realization of the bioeconomy. Two components are pivotal to the success of the bioeconomy: biomass and knowledge. Based on two case studies in Ghana, this thesis investigates first the efforts to increase maize productivity in the Guinea savanna and secondly explores the role of collective action groups as central actors to address the sustainability dimension of the bioeconomy. Brazil has successfully implemented pivotal aspects of the bioeconomy, especially in the sugarcane sector. For this reason it lends itself well to analyze the role of institutions and networks in the development of new processes and products. This study adopts a mixed methods approach to address three key aspects of the development of the bioeconomy: production, marketing, and the overall innovation system. Data collection and analysis included qualitative and quantitative methods from various disciplines. The findings are presented in three papers, which this cumulative thesis is composed of. The first paper adopts a multidisciplinary approach. A household survey, in-depth interviews, and focus group discussions served to gather data on the socio-economic challenges of maize production in the Guinea savanna. Additionally, soil and fertilizer samples were analyzed to identify natural constraints and potential governance challenges. The results from this paper show that both socio-economic and biophysical parameters contribute to an improved understanding of site-specific challenges, resulting in low maize productivity in the Guinea savanna of Ghana. The second paper explores the role of female-led market associations across regions, ethnicities, and market typologies throughout Ghana. For this study a qualitative approach was chosen with participant observation and in-depth open-ended interviews conducted with traders, both in and out of leadership positions. The results could not empirically confirm the prevailing discourse on the monopolizing power of female-led market associations. The study rather finds that traders’ collective action provides vital safety-net measures for asset-poor women engaging in risky market activity. However, the public perception is challenging female trader agencies. The third paper analyzes the role of institutions and focuses on the innovation networks in the sugarcane sector in Brazil. The study combines the novel concept of ‘biomass value-webs’ with the established National Innovation System concept. For data collection, in-depth interviews and Net-Maps as a participatory tool were applied. The results illustrate the importance of innovation networks for Brazil to become a front-runner in the future bioeconomy. In particular, it emphasizes the importance of integrating national and international private sector organizations, and the need for incentives to foster collaboration with knowledge institutions. Based on these findings, one can conclude that strengthening the efforts to tailor site-specific solutions that consider the inter-disciplinary nature of crop production, marketing and development of processes is crucial to the bioeconomy. Overall, more attention to innovation networks is required to master the challenges of the bioeconomy and take full advantage of its opportunities.
Trade integration, global capital flows and the link to institutional quality from a North-South perspective
(2020) Schneider, Sophie Therese; Jung, Benjamin
This doctoral thesis is a cumulative dissertation containing three essays. In the first essay, I create a panel data set of North-South preferential trade agreements (PTAs) building on the comprehensive database on the design of trade agreements (DESTA). I analyze the effects of the depth and number of PTAs signed on the quality of institutions in developing countries, the global South, measured as the political risk component investment profile of the ICRG database. I show that the system GMM is the appropriate estimator to apply for my empirical analysis to account for various sources of endogeneity. I show that signing deep North-South PTAs positively affects institutions in the South. The results differ with respect to the type of agreement and region. The second essay deals with the determinants of PTAs focusing on institutional distance as a driving factor and regarding PTAs as an instrument to compensate for missing institutions. I argue that the effect of institutional distance is specifically important (1) in a North-South trade relationship where institutional distance is particularly large and (2) if countries trade a large share of contract-intensive goods. For this analysis I create a panel data set including a large number of developing countries and a variable to measure the difference of the share of bilateral contract-intensive exports and show that a linear probability model for discrete choice panel data is a suitable estimator to be used. I address endogeneity using an instrument variable (IV) approach. I show that institutional distance promotes the formation of PTAs. Comparing this effect for North-North, North-South, and South-South country pairs reveals that the positive effect of institutional distance on the probability of PTA formation is specifically high for the formation of North-South PTAs. Furthermore, I find that the effect is nonlinear and that trading contract-intensive goods reinforces the positive effect of institutional distance for the formation of North-South PTAs and may offset negative effects. Robustness checks with regard to the underlying sample reveal that the effect of institutional distance is driven by North-South relationships involving the EU. Essay 3 is dedicated to global investment flows and aims at deriving a global model to determine the factors of foreign direct investment (FDI) by considering investment flows between and within North and South. We empirically estimate and assess global FDI models, namely the gravity and knowledge capital (KK) model, based on the new CDIS data set by the IMF, which includes a large number of developing and transition countries. This allows us to detect potential vertical motives for FDI and to address the global trend of increasing FDI from and to the global South. We find the gravity model to achieve the best theory-consistent out-of-sample prediction, particularly when parameter heterogeneity of South and North FDI is allowed for. Controlling for surrounding market potential is important to recover the horizontal effect of the gravity model. Including institutional, cultural, or financial factors does not improve the model performance distinctly although results for those variables are mostly in line with theory.
Who are the champions? Inequality, economic freedom and the olympics
(2019) Geloso, Vincent; Kufenko, Vadim
Does a countrys level of inequality affect its ability to win Olympic medals? If it does, is it conditional on institutional factors? We argue that the ability of economically free societies to win medals will not be affected by inequality. In these societies, institutions generate incentives to invest in the talent pool of individuals at the bottom of the income distribution (people who are otherwise constrained in the ability to expend resources on athletic training). These effects cancel out those of inequality. In unfree societies, the incentives that promote investments in skills across the income distribution are weaker. Consequently, the effects of inequality on the ability to win are stronger. Using the Olympics of 2012 and 2016 in combination with the Economic Freedom of the World Index, we find that inequality only matters in determining medal numbers for unfree countries. We link these results to the debates on inequality.
Why it matters what people think : beliefs, legal origins and the deep roots of trust
(2012) Wahl, Fabian
This paper analyses the connection between legal origins and generalized trust. Based on recent results of institutions and trust research it argues that legal origins and trust are connected via the beliefs of agents. Next, it develops hypotheses about a complex and self-reinforcing causal relation between both. It then shows empirically that indeed, legal origins and contemporary trust are robustly connected with each other. In a next step, it investigates the deep historical roots of trust to construct proxies for historical trust levels in 1500 AD. By making use of the historical trust scores and information about the exogenous or endogenous introduction of legal origins in certain countries it assess some of the claims about causality made before. Here, it found confirming evidence for the propositions of Aghion et al. (2010), namely that (i) countries for which legal origins are endogenous did develop other legal traditions depending on their ex-ante (historical) trust values and (ii) that the effects of an exogenous introduction of legal origins vary depending on ex-ante trust levels.