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By Riccardo Crescenzi (LSE), Arnaud Dyèvre (LSE) and Frank Neffke (Complexity Science Hub, Vienna) How do new centres of technological excellence emerge? R&D activities of foreign multinationals can act as powerful boosters of local innovation and growth in the cities where they invest. However, for the most innovative multinational companies, the risk of leaking knowledge to … Continued
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By Francesco Lissoni (University of Bordeaux) and Ernest Miguelez (University of Bordeaux) The authors find that innovation hotspots are more successful when they host a larger proportion of migrant inventors. Their role compares to organization-based pipelines, but this success is overwhelmingly seen in northern America and Europe, and in the largest clusters. The golden age of globalization has … Continued
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by Sarah Giest (Leiden University) This article suggests changing the cluster narrative around the importance of locality, life cycles and the focus on one industry and instead looking at the underlying mechanisms of collaborative and absorptive capacity driving innovation dynamics in and beyond clusters. This enables government in collaboration with cluster organisations to facilitate … Continued
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Deutschland beschafft mit der F-35A Lightning II ein neues Trägerflugzeug für die nukleare Teilhabe der NATO. Diese Anschaffung ist umstritten. Bislang wurde in der Debatte allerdings nur unzureichend berücksichtigt, dass die F-35A ein wichtiges Glaubwürdigkeitsproblem der nuklearen Teilhabe lösen kann: Veraltete europäische Kampfflugzeuge wären im Verteidigungsfall kaum in der Lage, die leistungsfähigen Luftverteidigungssysteme der Russischen Föderation zu überwinden und US-amerikanische Atomwaffen ins Ziel zu bringen. Damit trägt die F-35A zu einer Stärkung der nuklearen Abschreckung bei, deren Relevanz seit dem Angriff Russlands auf die Ukraine an Bedeutung gewonnen hat. Author information
Frank Kuhn
Frank Kuhn ist Projektkoordinator des Clusters Natur- und Technikwissenschaftliche Rüstungskontrollforschung (CNTR) am PRIF. Zu seinen Forschungsinteressen zählen nukleare Abschreckung, Rüstungskontrolle und Nichtverbreitung sowie Militärtechnologien und -strategien. // Frank Kuhn is the project coordinator for the Cluster for Natural and Technical Science Arms Control Research (CNTR) at PRIF. His research interests include nuclear deterrence, arms control and non-proliferation, as well as military technology and strategy. | Twitter: @_FrankKuhn
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Der Beitrag Verbesserte Glaubwürdigkeit: Zur Bedeutung der F-35A für die nukleare Teilhabe erschien zuerst auf PRIF BLOG.
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Die Bundesregierung beschafft für rund vier Milliarden Euro das israelisch-amerikanische Raketenabwehrsystem Arrow 3. Im politischen Berlin stößt der Kauf auf breite Zustimmung, doch international sorgt er für Stirnrunzeln. Anders als das bereits vorhandene Patriot- und das kürzlich bestellte Iris-T-Luftverteidigungssystem der Bundeswehr eignet sich Arrow 3 nämlich gar nicht dazu, russische Raketen oder Marschflugkörper abzufangen. Auch andere Erklärungsansätze für die Beschaffung sind wenig überzeugend. Somit bleibt die Bundesregierung der deutschen Öffentlichkeit eine Antwort schuldig, gegen welche Bedrohungen sie das System in Zukunft einsetzen möchte. Author information
Frank D. Kuhn
Frank D. Kuhn ist Projektkoordinator des Clusters Natur- und Technikwissenschaftliche Rüstungskontrollforschung (CNTR) am PRIF. Zu seinen Forschungsinteressen zählen nukleare Abschreckung, Rüstungskontrolle und Nichtverbreitung sowie Militärtechnologien und -strategien. // Frank D. Kuhn is the project coordinator for the Cluster for Natural and Technical Science Arms Control Research (CNTR) at PRIF. His research interests include nuclear deterrence, arms control and non-proliferation, as well as military technology and strategy. | Twitter: @_FrankKuhn
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Der Beitrag Das Raketenabwehrsystem Arrow 3: Eine fragliche Beschaffung erschien zuerst auf PRIF BLOG.
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In a landmark ruling in mid-February, the Hague Court of Appeal ordered the Dutch government to stop exporting parts for the Lockheed Martin F-35 Lightning II to Israel, citing the risk of serious violations of international humanitarian law if the F-35 were used for airstrikes in Gaza. Although it seems unlikely that the court order will have any significant impact on Israeli air operations, it raises a number of legal and political challenges to the global F-35 program, the U.S. Department of Defense's most ambitious and most expensive weapons program to date. Author information
Frank Kuhn
Frank Kuhn ist Projektkoordinator des Clusters Natur- und Technikwissenschaftliche Rüstungskontrollforschung (CNTR) am PRIF. Zu seinen Forschungsinteressen zählen nukleare Abschreckung, Rüstungskontrolle und Nichtverbreitung sowie Militärtechnologien und -strategien. // Frank Kuhn is the project coordinator for the Cluster for Natural and Technical Science Arms Control Research (CNTR) at PRIF. His research interests include nuclear deterrence, arms control and non-proliferation, as well as military technology and strategy. | Twitter: @_FrankKuhn
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Der Beitrag Court Orders Dutch Government to halt the Export of F-35 Parts to Israel: Implications for the War in Gaza and Beyond erschien zuerst auf PRIF BLOG.
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China's epic recurring COVID-19 shutdowns have frustrated multinational corporations aiming for predictability in their supply chains. Sure, China still benefits from having globally-renowned tech clusters. However, having your production capabilities curtailed again and again due to a handful of (relatively mild) COVID-19 cases doesn't encourage foreign firms, as you would expect.Not so long ago, I covered Vietnam's emergence as a major assembly hub for South Korea's Samsung [1, 2]. In the years since, it's developed a reputation as a reliable production center for MNCs. It was perhaps inevitable that Apple, frustrated like many others with the PRC's lockdown shenanigans, would look to set up shop elsewhere. Voila! Apple is coming to Vietnam:For the first time ever Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions, Nikkei Asia has learned.The U.S. company has also asked multiple component suppliers to build up their inventories to guard against future shortages and supply snags, sources said.China's BYD, one of the leading iPad assemblers, has helped Apple build production lines in Vietnam and could soon start to produce a small number of the iconic tablets there, people with knowledge of the matter said.To be sure, Apple already makes its wireless earphones in Vietnam. It makes business sense: experiment first with some components, and then shift further assembly work if things go well:The iPad will become the second major line of Apple products made in the Southeast Asian country, following the AirPods earbud series. The move highlights not only Apple's continuous efforts to diversify its supply chain but also the growing importance of Vietnam to the company. Also keep in mind that Vietnam is still mostly an assembly hub--stick socket A into socket B sort of mundane work. Many of the components for the "Vietnam-made" iPad will still come from, you guessed it, China. Hence, Apple wants to bolster supplier capabilities in parts of China that have a lower likelihood of being shut down based on the historical record:To further guard against supply chain disruptions, Apple has also asked suppliers to build up additional supplies of components such as printed circuit boards and mechanical and electronics parts, especially those made in and around Shanghai, where COVID-related restrictions led to shortages and logistic delays. In addition, the company has asked suppliers to move quickly to secure supplies of some chips, especially power-related ones, for the upcoming iPhones.In particular, Apple is asking suppliers outside of the lockdown-affected areas to help build up a couple of months' worth of component supplies to ensure supply continuity over the next few months. The requests apply to all of Apple's product lines -- iPhones, iPads, AirPods and MacBooks -- sources said. The next step in Vietnam's development is therefore obvious: to move from assembly to manufacturing components as well following in China's footsteps before it became lockdown land.
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Working with Maritsa Georgiou at NBC Montana, I analyzed the removal of post boxes in the state of Montana and found that Democratic vote at the precinct level is associated with a higher probability that a post box is slated for removal. A discussion of the process by which I came to this disturbing conclusion is outlined below. You can access Maritsa's story about my analysis can be found here. Below is the memo that I wrote for her, walking through the data and analysis.The Data
I was provided with the locations of all post boxes in the state of Montana as of August 2020 and July 2019. As of July 2019, there were 1,438 box locations. As of August 2020, 12 box locations were added since July 2019 and another 47 removed or slated for removal. 302 locations are stand alone boxes not located at post offices. 30 of these were removed or slated to be removed in August of 2020 and 3 had been added after July 2019.
Data Collection
With precinct maps available online and phone calls to county clerks throughout the state, I was able to locate the voting precinct associated with each box address. I then gathered precinct level returns from the 2018 Montana Senate election, specifically the percentage of the vote cast for Democrat Jon Tester, from the Secretary of State's website
Next, I added county-level demographic data to each box location. This data includes the percentage of college graduates in the county, the population change over the past ten years, and the county's population density.
Statistical Models
Unit of Analysis: Each individual box address.
Dependent Variables (What we are predicting): Dichotomous (0/1).
Was a box removed from the location? No (0), Yes (1).
Was a box added to the location? No (0), Yes (1).
Independent variables (Variables that explain box addition or removal).
Demv = Democratic Vote at the Precinct Level (Percentage ranging between 0 and 1)
Postoffice = Indicator variable. Is the address location at a post office? (0 No, 1 Yes) This controls for box clusters around post offices.
Density: Population density at the county level as reported by the Census (People per square mile).
Pop_Change: Population change since 2010 at the county level as reported by the Census (Percentage ranging between 0 and 1).
Box_den: Total boxes in the county divided by the county population. I simply totaled all the mailbox addresses in each county and divided that by the county's population as reported by the Census (Express as a percentage ranging between 0 and 1).
The addition of these variables controls for other factors which might reasonably be associated with the addition or removal of postal boxes. This is to be sure that there isn't a spurious correlation with box removal and Democratic vote.
Some basic numbers:
The average Democratic vote cast where a box was removed: 64%
The average Democratic vote cast where a box was left unchanged: 46%
The average Democratic vote cast where a box was added: 49%
Results
Table 1: Predicting Box Removal in Montana
. logit remove demv postoffice density pop_change box_den, cluster(fips3)
If a variable is significant (p-value of less than .05), then this means there is a relationship between the variable and the dependent variable. The sign on the variable tells the direction of the relationship. Demv (Democratic vote cast in the precinct) is positively associated with box removal, meaning the greater the Democratic vote, the higher the probability a box gets removed. If a box is located at a post office, is it less likely to get removed (denoted by the negative sign on the variable and the fact the p-value is less than .05). Population density, Post box density, and population change are NOT significantly related to box removal. The model correctly classifies 97 percent of box removals (that's really superb, but we also only have few cases that differ from zero).
Predicted Probabilities
To determine the magnitude of effect of Democratic vote share on the probability of a box removal, we need to generate predicted probabilities. Let's consider Gallatin County, which has a population density of 34, a box density of .006816, a population change of 27 percent, and for a box location that is NOT outside of a post office. Now, let's vary the Democratic vote share at the precinct level from .23 (a precinct south of Manhattan) to .84 (a precinct located near the university just south of downtown that includes a lot of students living off campus). How does the probability of a box removal change?
Table 2: Democratic Vote Share and Probability of Post Box Removal
Democratic Vote Share
Probability of a Box Removal
23%
4%
30%
5%
40%
7%
50%
9%
60%
13%
70%
18%
84%
26%
Caption: Other variables held to represent Gallatin County and box locations not located outside a postal facility.
Across the range of precincts in Gallatin County, the probability of postal box removal increases more than 6-fold as we move from the most Republican precincts in the county to the most Democratic.
Statistical Notes
I ran the model using a procedure know as a rare event logit given the low number of cases. The results are substantively no different—the same variables are significant. I also ran models predicting box additions and found no relationship between the predictors listed above and the probability of a box addition.
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Over the last year, news media have run numerous stories of offices, shopping malls, and other commercial properties going into foreclosure or being sold at substantial discounts. Given local government's reliance on property tax revenues, a collapse in commercial property values might appear to have disastrous consequences for city and county finances. But circumstances differ widely from one region to another (and even between local governments within a region), so the impact of the commercial real estate decline will vary greatly. Among the factors we must consider when evaluating the revenue impact of lower commercial real estate valuations are, first, what proportion of revenue comes from property taxes on commercial real estate, next, how closely assessed values tracked market values before the collapse, and finally, whether and when properties will be reassessed to conform with reduced market prices more closely. San Francisco—a city at the epicenter of the commercial property collapse—provides an example of how to evaluate these three factors. (For more about why San Francisco finds itself at the epicenter please see my recent post on the city's policy failures.) Commercial Property Tax Dependency Local government is heavily reliant on property taxes generally, but many entities diversify their revenue sources with income taxes, sales and excise taxes, and other levies, as well as non‐tax revenues. San Francisco anticipates $6.4 billion in revenue in fiscal year 2023–24. Of this total, $4.4 billion is expected to come from tax revenues. The combined city/county government levies a variety of taxes aside from the property tax, including sales tax, hotel room tax, utility user tax, parking tax, real property transfer tax, sugar sweetened beverage tax, and a unique tax on executive pay. Property taxes are expected to contribute $2.5 billion of the $4.4 billion of anticipated tax revenue. Since the current real estate valuation slump is only affecting certain categories of properties, it is also essential to understand how assessed value breaks down by category. According to San Francisco Assessor's latest annual report, three major commercial property categories (office, retail and hotel) accounted for 27% of total assessments in 2021. This proportion slightly understates the share of property tax revenue derived from commercial property, because only residential property is eligible for a homeowners' exemption. In California, this exemption is only $7,000 per owner occupied property and thus not as significant a factor as in Texas. Overall, San Francisco's commercial property valuation decline places at risk about $700 million of annual revenue or about 11% of total general fund collections. It is easy to see how this proportion might vary across cities and counties. Suburban communities that are primarily residential are likely to have very little exposure to commercial valuations, while cities hosting large malls and office clusters should be at greater risk. Assessed Versus Market Values Due to Proposition 13, the relationship between properties assessed and market value is complex. The 1978 measure limited assessment increases to 2% annually if a property does not change hands and is not subject to major construction. For properties that have not been reassessed since Proposition 13's implementation, their market values have risen about ten‐fold on average, but their assessed value have increased by a factor of only about 2.4. While it is unlikely that many high‐value commercial properties have avoided reassessment through the entire life of Proposition 13, significant gaps between assessed and market value have emerged over shorter periods: between 2012 and 2022 alone, California property prices more than doubled (it should be noted that I am using a residential price index for these value increases; the changes in commercial property valuations are likely to be different). To reasonably estimate the potential impact of underassessments, it would be necessary to review a sample of local properties. San Francisco's City Controller is performing such an analysis but the results have yet to be published. While no other state has Proposition 13, there can still be variances between assessed and market valuations outside of California. For example, a Georgia property assessor reviewed a sample of ten commercial properties and found that, on average, they were assessed at 40% below market value (his findings were published in a paywalled edition of Fair & Equitable, the magazine of the International Association of Assessing Officers). Reassessment Timing Just as assessments may not reflect market values on the way up, they may also lag declining resale values. But this is less affect is less likely to persist given the incentive that property owners have to minimize their property tax liabilities. In California, property owners can ask their assessor for a reduction, and, if not satisfied, they can appeal the assessor's decision to a county board. San Francisco's Assessment Appeals Board has an active docket of appeals cases at the moment, with some filers requesting assessment reductions of more than 50%. In one extreme case, the owner of the Westin St. Francis Hotel in San Francisco's Union Square is seeking a 90% reduction in its assessed valuation. Owners of commercial real estate may hesitate to seek downward reassessments if they are marketing their properties since potential buyers might use the lower assessment as a basis for negotiating a sales price. And, in California, at least, retroactive reassessments are not possible. So, in some cases, a commercial property may be assessed above market value at least during the current tax year. Conclusion Although San Francisco may be considered ground zero for the commercial property collapse, the budgetary impact has been limited this far. The city's FY 2022–23 revenues are running just 1% below prior year levels and the city is forecasting small increases for the next five fiscal years. That said, these are nominal amounts, and it is fair to conclude that San Francisco's projected revenues are expected to grow at or below the rate of inflation and are significantly underperforming recent growth rates. San Francisco is receiving some protection from undervaluation before the pandemic and revenue source diversification. That said, the city's unique challenges may also impact its sales tax and hotel room tax collections as well as its property tax revenues. For other jurisdictions, results can be expected to vary. Blanket nationwide assessments may well prove to be a poor substitute for an in‐depth look at each city's and county's unique characteristics.
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This post is co-authored by Susanna Berkouwer, Eric Hsu, Edward Miguel, and Catherine Wolfram, based on a study supported by CEGA. This post was originally posted on the Energy for Growth Hub blog.Electrician from Kenya Power | Rod WaddingtonGovernments and foreign aid institutions routinely finance large infrastructure construction projects in developing and emerging markets. In 2015, for example, the Government of Kenya launched the Last Mile Connectivity Project, designed to connect all Kenyan households to electricity by 2022 using financing from the World Bank (WB) and the African Development Bank (AfDB). To complete construction at the approximately 20,000 villages selected for the program, Kenya Power awarded dozens of private sector contracts to procure goods and services. However, distinct processes and regulations applied to villages where construction was financed by the WB and villages where construction was financed by the AfDB. We combined this natural variation with a randomized audit experiment to understand how procurement policies impacted the timing, cost, quantity, and quality of construction on the ground in a new research paper, titled "Donor contracting conditions and public procurement: Causal evidence from Kenyan electrification."Kenya's Last Mile Connectivity Project (LMCP)In a May 2015 Presidential Address, Kenya's president Uhuru Kenyatta launched the LMCP with the goal of connecting "one million new customers to electricity each year." As of 2017, there were around 60,000 electrical transformers across Kenya, which convert high- and medium-voltage power lines (33kV or 11kV) to low voltage (usually 0.415kV) that can be connected to households. The LMCP was to connect all unconnected households within 600 meters of a transformer by extending the local LV network through a process called 'maximization'. Phase I targeted the maximization of 8,520 transformers, with the AfDB financing 5,320 and the WB financing 3,200: Kenya Power assigned these in a largely arbitrary manner. Panel A of Figure 1 shows that AfDB- and WB-funded villages are distributed evenly across Kenya.FIGURE 1: Locations of Last Mile Connectivity Project villages across Kenya. Panel A plots LMCP sites that were funded by the WB and AfDB Phase I across all of Kenya. Panel B zooms in on the sites in the five study counties (Kakamega, Kericho, Kisumu, Nandi, Vihiga). Panel C shows the random assignment to an audit treatment.World Bank and the African Development Bank procedural conditionsThere are two key differences in the procedures used by the WB and the AfDB in this context. First, the AfDB used a bundled contracting style known as 'turn-key', or bundled, contracting (Panel A of Figure 2). Each AfDB turn-key contract comprised the entire construction process of all LMCP transformers in one of ten geographical clusters of counties. This included designing an efficient extension of the LV network to reach all unconnected households at a site, procuring the materials required to complete those designs, and installing materials according to the designs. Together with a metering contract and a consulting contract, Kenya Power awarded 12 LMCP contracts under the AfDB component. The WB, on the other hand, opted for an unbundled approach for the LMCP (Panel B of Figure 2), awarding 35 contracts, including four consulting contracts, eight design contracts, six contracts to procure wooden poles, three for concrete poles, three for conductors, three for cables, two for meters, and finally six contracts for installation.FIGURE 2: Contracting structures. Panel A displays the structure of bundled contracting employed by the AfDB. Panel B displays the structure of unbundled contracting employed by the WB.The second key difference between the funders is that the WB required an additional inspection report after construction. To understand the impact of such an ex-post inspection, we implemented a randomized controlled trial. Panel C of Figure 1 shows which sites were in the control and treatment arms. Members of our research team met with contractors in person to inform them of the randomly selected subset of treatment sites, which we tell them will be audited after construction. Given that the WB procedures already included a round of ex post audits, this additional round of audits should have a larger impact at AfDB sites than at WB sites.Collecting on-the-ground construction and power quality dataTo understand how the procedural differences affect construction outcomes on the ground, we collected data on 380 LMCP villages (shown in Panel B of Figure 1):GPS and engineering quality measurements of transformers, poles, and wires, as well as accessories like struts and stays.Household surveys on connection cost, timing, and experience.Minute-by-minute outage and voltage data quality from 600 households collected using nLine's PowerWatch devices.Original contracts signed between Kenya Power and contractors.Qualitative interviews: with senior leadership at Kenya Power, the WB, and the AfDB.FIGURE 3: Example of a Last Mile Connectivity Project (LMCP) Village. Each LMCP site is centered around a transformer from which low-voltage wiring extends to connect households and businesses to the grid. The gray circle denotes the 600m eligibility radius and the blue circle denotes our 700m surveying threshold.In addition to these primary data, we analyze 2009 Census data, VIIRS nighttime radiance data, land gradient data, and HERE Maps travel data.ResultsWe identified three main results:Households in villages funded by the AfDB are connected to electricity on average 8 months sooner than households in villages funded by the WB. This delay is caused primarily by the increased bureaucratic requirements resulting from the larger number and heterogeneity in WB contracts, as well as poor coordination between the various stages of WB contracting.Second, more poles and household connections were constructed at AfDB sites, driven in part by the WB's stricter adherence to the rule that only households within 600m of the transformer were to be connected.Third, WB processes, while taking longer, do generate tangible benefits: on-the-ground construction quality is 0.6 standard deviations higher at WB sites than AfDB sites, driven largely by the increased presence of pole caps, stays/struts, and grounding wires. While this does not lead to any improvements in voltage quality or power outages, these improvements are likely to improve grid longevity, lowering long-term maintenance and replacement costs.We also found that the additional audit treatment improved construction quality at AfDB sites but not at WB sites, which already saw rigorous ex-post inspections. These results hold across three different outcomes: the audit treatment increases the number of poles constructed at AfDB sites (but not at WB sites), improves average voltage by 5V at AfDB sites (but not at WB sites), and improves household installation quality and electricity usage at AfDB sites (but not at WB sites). Taken together, these results suggest that the additional inspection prescribed by WB procedures has an important effect on construction quality.Evaluating the relative net benefits of the two approaches requires understanding the long- and short-term costs and benefits: the WB procedures delayed the household connection date but reduced long-term maintenance costs when compared with AfDB procedures. We calculate that even a reasonable set of assumptions indicate anywhere from a USD 5.6mn net benefit of AfDB processes to a USD 2.8mn net benefit of WB processes. Neither method is necessarily the best option, and the optimal contracting structure will depend on the project's goals. Governments looking to spur short-term electrification may prefer the bundled method used by AfDB, whereas governments prioritizing longer term trade-offs may want to employ the unbundled method used by WB.Power Quality in Donor-Funded Infrastructure Projects was originally published in CEGA on Medium, where people are continuing the conversation by highlighting and responding to this story.