Market effects in development finance’s impact assessment

Development finance institutions and international financial institutions are increasingly being asked to deliver ‘market-level impact’ through their operations. This paper explores how these institutions consider market effects in their impact assessment systems. We present the two dominant conceptualisations of market effects, narrow and broad, with the various channels used for their realisation. We discuss how these views intersect with those on market distortions and concessionality and outline how impact assessment systems handle market effects in practice. We conclude by arguing that institutions should be more considerate of broad market effects in their impact assessments.Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them

Unlocking West Africa’s economic potential : addressing the deficiency of transport infrastructure with public-private partnerships

West Africa has been struggling with a lack of proper transport infrastructure for a long time. This has been hindering economic growth and trade competitiveness in the region. To achieve the goal of an integrated Africa and support continental trade, it is essential to address this gap. The challenge is made more difficult by the aging infrastructure, rapid population growth, and urbanization, which require significant investments of $130-170 billion annually until 2030, with$24.3 billion allocated for the transport sector. Traditional financing alone is not sufficient to meet this need, and innovative approaches like public-private partnerships (PPPs) are necessary. Governments should explore new funding mechanisms and build partnerships with the private sector to effectively bridge this infrastructure gap. This policy brief advocates for PPPs as the optimal solution to strengthen West Africa's transport infrastructure, which is crucial for unlocking the region's economic potential and fostering overall development.Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them

Essays on firm heterogeneity and its implications for macroeconomic policy

Defence date: 13 May 2024Examining Board: Prof. Ramon Marimon (Universitat Pompeu Fabra; BSE; European University Institute, supervisor); Prof. Russell Cooper (European University Institute, co-supervisor); Dr. Julian di Giovanni (Federal Reserve Bank of New York and Columbia University); Dr. Ernesto Pastén (Central Bank of Chile; Toulouse School of Economics)This thesis contains three independent essays studying the role of firm heterogeneity in the transmission of macroeconomic shocks and policies to the economy. In the first chapter, written jointly with Johannes Fischer, we analyse the effect of monetary policy on mergers and acquisitions (M&A) activity in the U.S. We provide causal evidence that contractionary monetary policy reduces aggregate M&A activity. In the cross-section of U.S. publicly listed companies, we show that this effect is particularly pronounced among financially constrained firms, leading to a change in the composition of firms conducting M&A in response to monetary contractions. As a result of this selection effect, contractionary monetary policy increases the quality of M&A deals taking place since fewer financially constrained firms engage in M&A. Finally, we provide evidence that following a monetary tightening, acquirers match with relatively smaller and younger target firms. The profitability of targets firms, relative to acquiring firms, does not change. In the second chapter, written jointly with Russell Cooper and Leonardo Indraccolo, we study the effects of Covid-19 on manufacturing output, employment and productivity across a set of European countries. Using a quantitative firm dynamics model with endogenous entry and exit, we estimate the key parameters of adjustment costs and market power to match the country-specific responsiveness of firms to exogenous shocks. We then use the estimated model to simulate the effects of the Covid-19 shock, with and without policy support measures. As seen through counterfactual exercises, the main impact of the policy interventions, treated here as work-sharing schemes targeted to low profitability firms and “no-firing" obligations, was to mitigate the drop in aggregate employment by keeping firms in business. We calculate that the aggregate drop in employment would have been between 1.0 and 1.9 percentage points higher across countries without policy support. We do not find evidence of adverse productivity effects from these interventions. Building on these counterfactuals, we, furthermore, establish the importance of targeted subsidies and the sensitivity of employment responses to firm beliefs. In the third chapter, I study the implications of public procurement for the transmission of monetary policy to asset prices and firm-level investment. I document that, among publicly listed U.S. companies, contracting with the government dampens the response of both stock returns and physical investment to monetary policy shocks. I provide novel evidence suggesting that federal procurement is less responsive to monetary policy shocks than private sector demand, providing an additional channel of insurance to government contractors against the adverse effects of monetary policy on final demand. I find only limited evidence for a weaker credit channel among government contractors.-- 1. Monetary Policy and Mergers and Acquisitions -- 2. Covid and Productivity in Europe: A Responsiveness Perspective -- 3. Monetary Policy and Public Procurement -- References -- A. Appendix to Chapter 1 -- B. Appendix to Chapter 2 -- C. Appendix to Chapter

The origins and development of Article 16 of the Charter of fundamental rights

Published online: 25 March 2024When the Charter of Fundamental Rights was published in 2000, it was the first time that an international human rights instrument had recognised the freedom to conduct a business. To understand how conducting a business came to occupy the status of a fundamental right, I undertake an examination of the drafting process of Article 16 in Section 2. Early drafts protected the freedom to pursue an occupation, before the freedom to conduct a business eventually became a freestanding entitlement. This was thanks to the influence of Convention members associated with the European People’s Party who were instrumental in ensuring Article 16 was added to the draft Charter. In Section 3, I critically assess the claim contained in the Explanations to the Charter that Article 16 was simply a codification of pre-existing entitlements deriving from the case law of the Court of Justice. In Section 4, I examine the impact of Article 16 Many of the limitations that constrain the scope of Article 16 have been weakened, or have not proved to be the limitations that were originally envisaged. The Court of Justice’s defence of select areas, such as consumer protection, has shielded the deregulatory potential of Article 16 from view. Yet Article 16 has had a real and damaging impact on workers’ rights across the Union. Protecting the freedom to conduct a business in Article 16 means that a remarkably broad range of actions taken in the course of running a business are now accepted as the exercise of a fundamental right.This article was published Open Access with the support from the EUI Library through the CRUI - CUP Transformative Agreement (2023-2025

How to survey hard-to-reach populations : a practical guide to app-based respondent-driven sampling

Target populations that are hidden, elusive, and marginalized are usually hard-to-reach for (sur-vey) research. To overcome the difficulties in reaching such target groups, we propose an inno-vative digital adaption of respondent-driven sampling (RDS). This paper introduces a novel fully app-based RDS approach for collecting high-quality data on particularly hard-to-reach target groups. Based on specific examples from our own research with rejected asylum seekers from West Africa living in Germany, we offer practical guidance along four steps of implementing an RDS smartphone app, from getting to know one’s target group, over the formative assessment, app development, and data collection and analysis. Thereby, we reflect practical, technical, and ethical challenges that need to be considered. Proposing feasible solutions for others to implement this innovative approach, we advance the methods for researching particularly hard-to-reach groups

Multilateralism and potential European Union intervention in the Indo-Pacific : co-ordination of geopolitical and commercial interests

This policy brief examines the European Union's (EU) increasing strategic interest in the Indo-Pacific, highlighted by the EU Strategy for Cooperation in the Indo-Pacific (2021) and the Strategic Compass for Security and Defence (2022). The brief argues that the EU strategy continues to prioritise economic leverage and commercial power while incorporating a security dimension, reflecting a less confrontational approach to China, unlike the US strategy. This entails strengthening ties with regional actors, reflecting a cooperative stance shared by partners like the UK, US, Japan, and India. Differing from the US approach of direct containment, the EU focuses on partnership and economic engagement, prioritizing trade and investment over geopolitical confrontation. Despite the challenge of coordinating the diverse interests of its 27 member states, the EU has achieved a certain level of consensus, with countries like Italy and France enhancing their commercial and strategic presence in the Indo-Pacific. However, the brief calls for the development of a coherent framework to manage the EU’s current ‘tripartite’ approach to China with its strategic stance in the Indo-Pacific

Open innovation under authoritarianism : the case of the Soviet Union

Published online: 12 July 2024The Soviet Union was a productive and technologically developed economy. It achieved a remarkable transformation from a feudalistic society to an advanced industrial society. How was it able to do this? This article argues that such rapid industrialisation was possible because the Soviets invested in legal institutions that created a special kind of open and highly coordinated innovation system confined to national borders. These legal institutions remain underappreciated in Western intellectual property scholarship. The article reassesses the Soviet legal institutions, by explaining their functions and effects on knowledge flows. It also conceptualises the Soviet reward system as having elements of an ‘economy of esteem’. The article is informative not only as a revisited historical account on the Soviet regulation of innovation, but also as one that teaches much about the modern models of innovation in market economies.This article was published Open Access with the support from the EUI Library through the CRUI - Wiley Transformative Agreement (2024-2027

Sometimes it is the little things : a meta-analysis of individual and contextual determinants of attitudes toward immigration (2009–2019)

Available online 29 January 2022Attitudes toward immigration have attracted much scholarly interest and fuelled extensive empirical research in recent years. Many different hypotheses have been proposed to explain individual and contextual differences in attitudes towards immigration. However, it has become difficult to align all of the evidence that the literature has produced so far. The present article contributes to the systematization of political science empirical research on public attitudes toward immigration in the last decade. Using a simplified combined-tests technique, this paper identifies the micro- as well as macro-level factors that are consistently linked to attitudes toward immigration. It reports findings from a meta-analysis of the determinants of general attitudes toward immigration in published articles in thirty highly ranked peer-reviewed political science journals for the years 2009–2019. The results warrant a summary of factors affecting attitudes to immigration in a systematic, measurable and rigorous manner

Regulatory framework relevant for int:net

Published online: 30 May 2024Lack of interoperability is increasingly becoming a significant issue in the electricity sector. The need to integrate a growing amount of distributed resources, such as renewable energy sources and electric vehicles, means that interoperable energy services will play an increasingly vital role in maintaining the stability of the electricity system and enabling consumers to benefit from the energy transition. Much has been done to create a regulatory framework that can support the development of these new services and the related flexibility markets. However, the journey towards a completely digitalised electricity system which operates in a seamless way is still long. In light of this, this deliverable aims to provide policymakers and regulators with a series of considerations that may prove relevant when deciding how to improve the current regulatory framework. To develop these considerations, the main barriers to the development of interoperable energy services were identified through two main activities: a stakeholder analysis and an analysis of Horizon projects focused on the development of new flexibility services.The research leading to these results has received funding from the European Union’s Horizon Europe Research and Innovation Programme, under Grant Agreement no 101070086

New modes of European macroeconomic governance

This contribution was delivered on 24 May 2024 in Badia Fiesolana (EUI) on the occasion of the hybrid 2024 edition of EUI State of the UnionNew forms of European macroeconomic governance The European Union has reinvented macroeconomic governance over the past fifteen years – by rewriting the rules for fiscal policy coordination, creating new institutions for macroeconomic and financial stabilization, and, through Next Generation EU, developing a new pattern for promoting country-specific reforms by tying them to common European projects backed by common European resources. The result is an unprecedented form of cross-border macroeconomic policy coordination that does not look like a ‘federation’ but is certainly much more than exists in any international organization. The purpose of this panel is to take stock of the current arrangement – which is based to a large extent on instruments that are either officially ‘temporary’ or that have yet to be tested – and to explore what it tells us about the nature and direction of European integration