Strategic Interaction and Donor Policy Determination in a Domestic Setting

aid effectiveness, political processes, endogenous policy formation

Indivisibility, Fairness, Farsightedness and their Implications for Security

fair division, commitment, peace treaties, terrorist motivation

Tax Competition, Globalization and Declining Social Protection

Tax competition, Fiscal policy, Social protection, Political processes

Conditionality and Endogenous Policy Formation in a Political Setting

aid conditionality, fiscal policy, political processes, endogenous policy formation

On the Non-Contractual Nature of Donor-Recipient Interaction in Development Assistance

This paper analyses three issues in strategic donor-recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out their designated task. The second is to do with the fact that effort associated with ensuring aid effectiveness may concern both principal and agent; the optimal solution to which requires difficult to design cooperative behaviour. Consequently, the contractual type principal-agent relationship between donors and recipients is inappropriate. We need to consider models that signal recipient quality or commitment to reform. A simple model of signalling with commitment problems is presented, along with extensions to multiple types of agents and time periods, as well as possible solutions involving mechanism design.aid, conditionality, contracting, signalling quality, mechanism design

Beyond Institutionalism: There Lies a Good Set of Trade Policies

The purpose of this paper is to empirically examine the contribution of trade liberalisation to differences in the level of prosperity across nations. We compare this with the relative contribution of institutional capacity to prosperity, as well as the role of human capital accumulation in that respect. We employ several concepts of institutional quality, trade policy and openness variables following various definitions prevalent in the literature. Unlike in the comparable study by Rodrik et al (2004) we have (a) included a role for human capital, (b) employed six institutional variables compared to one only in Rodrik et al (rule of law), (c) included trade policy variables, and not just openness indicators and (d) expanded the set of openness measures employed. We discover that opening up domestic markets to foreign competition by removing trade restrictions and barriers may be good for economic performance. Secondly, developing human capital is as important as superior institutional functioning for economic wellbeing. We find that openness counts for little per se in explaining income differences across countries. This is because it is an outcome and not a cause. Trade policies, and liberalisation, on the other hand, are not insignificant in explaining cross-country per-capita income variation. With regard to trade policies, export taxes are the most important in explaining cross-country per-capita income differences.Economic Growth, Institutions, International Trade

Trade Policy, Openness, Institutions

This paper examines the importance of institutions vis-à-vis openness and trade policies in determining per capita income differences across countries. Recent literature has tried to demonstrate that more open economies grow faster. On the other hand, it has also been asserted that it is not openness per se but institutions and good governance that matter in promoting growth. This paper attempts to test this hypothesis across a crosssection of nations. Unlike other papers in the field, we have tested not only for the degree of openness but also for trade policy indicators, as well as a fuller set of six institutional variables. Our broad finding is that although institutions matter, trade policies are also relevant to promoting growth, whereas openness per se has little impact on growth.International Integration, Economic Development

Identity and Islamic Radicalization in Western Europe

This paper argues that both socio-economic disadvantage and political factors, such as the West’s foreign policy with regard to the Muslim world, along with historical grievances, play a part in the development of Islamic radicalized collective action in Western Europe. We emphasise the role of group identity based individual behaviour in organising collective action within radicalized Muslim groups. Inasmuch as culture plays any role at all in radicalization, it is because individuals feel an imperative to act on the basis of their Muslim identity, something to which different individuals will attach varying degrees of salience, depending on how they place their Muslim identity based actions in the scheme of their multiple identities. We also emphasize the role of the opportunistic politician, from the majority European community, in fomenting hatred for Muslims, which also produces a backlash from radicalized political Islam. We present comparative evidence on socio-economic, political and cultural disadvantage faced by Muslim minorities in five West European countries: Germany, the UK, France, Spain and the Netherlands.Peacekeeping; Identity, Radicalization, Clash of civilizations, Terrorism