Setting an optimal fiscal policy in oil-producing countries is challenging, due to the exhaustibility of oil resources and unpredictability of oil prices. Recently it has become popular among oil-producing countries to establish oil revenue funds, which are believed to stabilize the economy and provide inter-generational redistribution of oil wealth. The effectiveness of oil revenue funds and their design have received considerable attention from researchers and policymakers recently. Using empirical model, it is found that an oil revenue fund in Kazakhstan stabilized the government expenditure, but did not stabilize real effective exchange rates.
Setting an optimal fiscal policy in oil-producing countries is challenging, due to the exhaustibility of oil resources and unpredictability of oil prices. Recently it has become popular among oil-producing countries to establish oil revenue funds, which are believed to stabilize the economy and provide inter-generational redistribution of oil wealth. The effectiveness of oil revenue funds and their design have received considerable attention from researchers and policymakers recently. Using empirical model, it is found that an oil revenue fund in Kazakhstan stabilized the government expenditure, but did not stabilize real effective exchange rates.
Private green finance is imperative for climate change mitigation and adaptation, but the share of private green finance remains small, and the studies that have tackled the efficacy of policy instruments in promoting green finance are limited. Many economies, especially in Asia, have implemented different policies to incentivize the private sector to issue green bonds. However, there is a lack of empirical evidence on the effectiveness of such policies. To date, this is the first study to provide empirical evidence on the effectiveness of a broad range of green bond policies on the issuance of green bonds. Given the nascent nature of green bonds, this paper documents the effects of several policy instruments supporting green bonds on the private sector's issuance of green bonds in 58 green-bond-issuing economies, including 11 economies in Asia, over the period January 2010−June 2020. Using the difference-in-difference specification within the multilevel longitudinal model, the paper finds that some green bond policies, such as green bond grants and tax incentives, as well as cooperation and policy signals, are effective in promoting the issuance of green bonds in the private sector in Asia. Regional cooperation and standardization have incentivized private green bond issuance in the European Union but not in the Association of Southeast Asian Nations region. Global cooperation and international standardization have had a positive impact on the issuance of private green bonds.
Following the collapse of the Soviet Union, Western countries have signed several agreements regarding the use of hydrocarbon resources in the Caspian Basin, with the aim of diversifying their energy suppliers. However, recession in the world economy and persistently low oil prices have profoundly affected the economies of the Caspian states, whose gross domestic product and exports are dominated by oil and oil products. Strongly dependent on export revenues from oil and gas, the economic growth of these states has slowed since 2014. Although limited energy resources have stimulated an emphasis on security of supply, fundamentally understood as a continued and low-risk strategy of interruption of energy import flows, low oil prices have also maintained focus on the challenge of security of demand faced by energy-producing economies in terms of stable energy export revenues. However, geopolitical developments around the world, especially local armed conflicts, highlight the importance of secure routes, as they present a threat to energy transportation. Using an indicator-based approach and country-level data over the period 2000−2017, this paper assesses the security of demand for the oil and gas of three countries in the Caspian region: Azerbaijan, Kazakhstan, and Turkmenistan, over a 16-year period, capturing the geopolitical situation and contributing to a greater understanding of the impact of energy-transporting countries' geopolitical situation on energy transportation to the European Union (EU). The results demonstrate that risk of energy security of demand is greater when political risk in energy-transporting countries is included within a measure of energy security of demand, i.e., risky external energy demand. The sharp decline in political stability and absence of violence or terrorism ratings in Ukraine and Turkey has increased the risk of security of energy demand in Azerbaijan, Kazakhstan, and Turkmenistan. The results highlight the importance of cooperation not only between the EU and the Caspian region, but also with energy-transporting countries, such as Ukraine, Georgia, and Turkey. Alternatively, routes may be found that bypass countries with low levels of political stability, such as through the Trans-Caspian Pipeline.
This paper examines the drivers of private investment in renewable energy by source of funding for 13 global economies over the period 2008 to 2018, with a focus on a sub-panel of Asian economies. Using a seemingly unrelated regression model, this paper provides a first quantitative estimate of the effect of government renewable energy policies on private investments across different sources of financing. Our results indicate that feed-in-tariffs (FITs) have the greatest overall effect in Asia on driving private investment in renewable energy, particularly from asset finance compared with other funding sources. The impact of FITs in Asia is also greater than that of the global sample. The impact of FITs is amplified in the presence of lower regulatory quality, which may be related to ease of market entry. We also find an important role in Asia for government expenditure on research and development in stimulating private investment. The magnitudes of the effects in Asia are broadly in line with the overall global sample. Finally, we find that technology costs, are less elastic on private investment in Asia compared with globally in affecting private investment in renewable energy across all funding sources, which may be related to the prevailing strong cost competitiveness of Asian economies in renewable energy provision.
This paper proposes a floating-interest-rate infrastructure bond, where the interest of a government bond is paid to investors during the period of construction and the early period of operation. Unlike the usual government bond, which provides a fixed interest rate, the proposed floating-interest-rate infrastructure bond pays a floating interest, the rate of which depends on spillover tax revenues. Effective infrastructure projects have a positive effect on the economic growth of a region, known as the spillover effect. When user charges and the return from spillover tax revenues are below the fixed rate of the government bond, the interest rate will equal to the fixed rate of the government bond. In this case, investors in the infrastructure will receive interest on the government bond at the minimum rate. As the spillover effect of the infrastructure increases, the rate of return for infrastructure investment will become greater than the fixed rate of the government bond. The success of the floating-interest-rate infrastructure bond depends on the spillover effect and on transparency and accountability. Policy recommendations are provided in this paper on how to increase the spillover effect and improve transparency and accountability.
Scaling up private investment in renewable energy is indispensable for achieving decarbonization of the global economy, low carbon transformation, and climate-resilient growth. As advocated by the United Nations, governments should create a level playing field for private investment in renewable energy, and they should use fiscal policies to incentivize engagement from the private sector. While studies on renewable energy are abundant and focus on topics ranging from unlocking renewable energy investment to the effects of environmental policies on innovation, energy efficiency policies, investment policies in renewable energy, and the adoption of feed-in tariffs, studies that uncover the determinants of private investment in the renewable energy sector are limited. Unlike the previous literature, which concentrates on the total green investment, this study distinguishes between private sector investment and government investment in renewable energy. Using multilevel data from 13 countries over the period 2004-2016, this chapter investigates the impact of 4 fiscal and financial policy instruments, namely (i) feed-in tariffs, (ii) taxes, (iii) loans, and (iv) grants and subsidies, on private investment in renewable energy. A multilevel random-intercept and random-coefficient model provides evidence of the effectiveness of two policy instruments, feed-in tariffs and loans. This study could benefit policy makers and researchers by enhancing their understanding of the factors enabling the scaling up of renewable energy investment.
This dataset is based on a firm-level survey. The sample includes 89 businesses located in different regions of Kazakhstan. The survey was generated using Google Forms and distributed mostly via social networks. The survey was conducted in 2016 (January-May). This dataset provides information about businesses and the quality of the business environment with a focus on competitiveness and governmental support. This survey aims to establish a picture of conditions for doing business in Kazakhstan in 2016. The survey was in three languages, English, Russian and Kazakh. Non-English language responses were translated to English mostly using Google Translate and were checked by the authors. All identifying information, including company name and work address, were removed.
This study aims to examine the impact of infrastructure on firm performance in nine CAREC countries: Afghanistan, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, and Uzbekistan. Empirical analysis is based on the enterprise survey for 2009, 2013, and 2019. Infrastructure is measured by the duration of power outages, electricity expenses as the share of total sales, access to broadband internet and efficiency of customs. Firm performance was measured by total sales, share of utilized capacity, dummy variable if firm exports, and the share of export sales. Results indicate that firm performance measured through sales and capacity utilization is negatively affected by the duration of power outages and electricity expenses. Moreover, access to broadband internet significantly increases the total sales and export sales of small firms, while efficiency of customs increases the exporting activities of medium and large firms. These findings underline that for the development of private sector and international trade in CAREC countries, sustainable access to, and quality of, electricity, telecommunications, and customs efficiency are important objectives for government policy.
As the growth of energy demand outstrips that of energy supply in Southeast Asia, it becomes imperative for ASEAN member states to seek energy efficiency improvements for sustained energy security. While green buildings have an overall low penetration rate in ASEAN, when compared to the rest of the world, a relatively large proportion of green bond proceeds in ASEAN have been channeled to financing green buildings. Green bonds hold vast potential as a financing mechanism, and the importance of green bonds as a funding source for green buildings in ASEAN is projected to increase in the future. ASEAN governments can encourage the use of this source of finance to address underinvestment in green buildings through providing information on raising funds through green bonds, endorsing investment in green buildings through codifying green building standards, and promoting local currency bond financing through domestic investors.
