Suchergebnisse

AbstractThis paper compares different fiscal integration schemes on the basis of their ability to finance public investments and resilience to debt distress and contagion. Complete integration schemes, where a central authority chooses the level of public investments with productivity‐enhancing externalities across different jurisdictions, are shown to be superior to incomplete integration schemes, where member governments choose public investments unilaterally. As a result, equilibrium income is greater for citizens of both member states under a complete integration scheme. Moreover, complete integration schemes are shown to be more resilient to idiosyncratic shocks and more effective in limiting contagion of debt distress. This is mainly because the central authority can credibly borrow more without risking default than member states taken together can and it can "transfer resilience" across them if needed. These findings inform discussions on structural aspects of secular stagnation in Europe by emphasizing a potential challenge in the institutional design of fiscal responsibilities.

This paper investigates how the devolution of oil windfalls affects the likelihood of political violence. It shows that transferring large shares of oil wealth can prevent conflict, while transferring small shares can trigger it. Among the different transfer schemes, fiscal transfers (to subnational governments) yield the highest levels of consumption, but direct transfers (to people) are the most effective in preventing conflict. By averting conflict, transfers can improve ex ante welfare; however, only a subset of the ex ante welfare optimal transfers is optimal ex post and thus self-enforcing. Among them, those that avert conflict by reinforcing repressive regimes are of particular policy interest.

This study considers the role of demand-driven changes arising from population aging and how they affect the pattern of international trade as well as trade and immigration policy. An aging society can see a welfare-reducing reduction in its share of manufacturing output and this reduction is magnified by a decrease in trade costs (an increase in globalization). Immigration can ameliorate this outcome if it is directed toward younger immigrants. A unilateral tariff increase can also reduce firm delocation from an aging country, however, a reciprocated tariff increase will unambiguously harm the country with the older average population.

This paper develops a multi-sector, small open economy Dynamic Stochastic General Equilibrium model, which includes the accumulation of human capital, built via public expenditures in education and health. Four possible fiscal rules are examined for total public investment in infrastructure, education, and health in the context of a sustainable resource fund: the spend-as-you-go, bird-in-hand spending; moderate front-loading, and permanent income hypothesis approaches. There are two dimensions to this exercise: the scaling effect, which describes the level of total investment, and the composition effect, which defines the structure of investment between infrastructure, education, and health. The model is applied to Kenya. For impacts on the non-resource economy, efficiency of spending, and sustainability of fiscal outcomes, the analysis finds that, although investment frontloading would bring high growth in the short term, the permanent income hypothesis approach is overall more desirable when fiscal sustainability concerns are taken into consideration. Finally, a balanced composition is the preferred structure of investment, given the permanent income hypothesis allocation of total investment over time.

This report comes at a crucial time when the unprecedented global refugee crisis, most notably in Europe and the Mediterranean, has not only focused the world's attention on the plight of refugees, but has also led to the politicization of refugee influxes. With an average of 24 people worldwide being displaced from their homes every minute of every day (UNHCR 2016), the debate surrounding the refugee crises is on the minds of many, ranging from governments and policy-makers to citizens, refugees, and host communities alike. Worldwide displacement is currently at an all-time high as war and persecution increase; one in every 113 people is now either a refugee, internally displaced, or seeking asylum (UNHCR 2016). In the past five years, at least 15 conflicts have erupted or reignited, and while protracted and harrowing wars have broken out in the Middle East, eight of these conflicts have been in Africa (Cote d'Ivoire, Central African Republic, Libya, Mali, Northeastern Nigeria, Democratic Republic of Congo, South Sudan, and Burundi) (UNHCR 2015). To compound matters, developing countries such as Lebanon, Jordan, Ethiopia, and Kenya are now hosting the largest share of refugees: they are home to nearly 90 percent of the world's refugees (UNHCR 2016). This report, which provides an original analysis of the economic and social impact of refugees in Kenya's Kakuma refugee camp on their Turkana hosts, therefore comes at an opportune time and could resonate with governments and policy makers beyond Kenya's borders. In particular, the methodology authors have developed enables us to run policy scenarios in a rigorous manner, ranging from encampment to decampment (i.e. camp closure) scenarios, and the potential to apply this methodology in other refugee situations around the world is particularly advantageous.