Research

Description

The study is concerned with foreign trade promotion instruments (TPI) and deals with the question: To what extent can an economic policy framework be created in Germany by using TPIs in African states, which reduces the financing and investment risks of German, especially medium-sized enterprises (SMEs), to a marketable level and subsequently enables a stronger commitment?

With this question, the study will be divided into three parts. The first part takes stock of investment activities of private enterprises from different (non-African) countries in different (African) countries. The second part looks at existing and potential new TPIs. In addition, the eligible TPIs are listed and their impact on (foreign direct) investment will be estimated empirically. The third part deals with the developmental impact (growth stimuli) of the instruments resulting from these investments.

Project staff

Univ.-Prof. Dr. Andreas Freytag
Dr. Luong Thang Tran

Project partner

Prof. Gabriel Gelbermayr, Ph.D.
Prof. Dr. Erdal Yalçin

Sponsor

KfW

Duration

Dec. 2018 – June 2019

Description:

In recent years private operators of security services have been gaining more and more importance, in Germany and internationally. Roughly speaking this is caused by an increasing demand as well as by new technical and organizational means. Such a development can be considered as functional against the background of new and diverse security challenges in Germany and a productive supplement to the "classical" public task of providing civil security. However, entering such a new territory requires a good analysis of the actual economic good "security" not least because these services are related to sensitive societal questions. On the basis of such a profound analysis this project intends to evaluate the development of the security market and to find appropriate institutional answers: to bring out the potential productivity of private security markets, and to avoid potential risk on the other hand. It is observable that trends of a larger involvement of the private sector are more advanced in other countries. Thus the main task of the Jena group is to analyze security markets namely of the United Kingdom, the United States, and Sweden. The research goal is to identify and to evaluate the impact of social, cultural, and institutional factors on the demand for security. For that purpose a qualitative concept of causality should be created as well an according quantitative (econometric) model.

Project staff

Prof. Dr. Andreas FreytagExternal link

Dr. Wolfgang BretschneiderExternal link

Partners:

Association of German Security Industry (BDSW)External link

Brandenburg Institute for Society and Security (BIGS,External link CoordinatorExternal link)External link

Fraunhofer Institute for Open Communication Systems (Fraunhofer FOKUS)External link

University of PotsdamExternal link

Viadrina Compliance Centre (VCC)External link

 

Sponsor:

Federal Ministry of Education and ResearchExternal link

Duration of the project:

October 2016 – August 2019

 

For more information please click here.External link 

Description:

This dissertation project aims to contribute to the understanding of factors determining the success of international agreements. How can international cooperation and compliance with international agreements in particular be achieved? Based on the research concrete proposals for the optimization of international agreements shall be derived. So far, the research focus lies on determinants of compliance with International Environmental Agreements (IEA) and is approached from two perspectives - an international and national Perspective. First, within a literature survey (What drives compliance with International Environmental Agreements? A political economy analysis of international and national determinants) reputational effects and IEA design (including transparency and inducement instruments) on the international level and domestic institutions and actors on the national level could be identified as major determinants of IEA compliance. Specific country characteristics such as employment situation, household incomes or level of education influence national preferences and interests. Additional preliminary results include econometric insights on the design of IEAs (International Climate Policy: Does it matter?) and the influence of domestic interest groups (Democracy, interest groups and compliance with international environmental agreements. An Empirical Assessment on the Example of the Kyoto Protocol) on compliance with the Kyoto Protocol.

Partner:

Konrad Adenauer StiftungExternal link, Graduiertenprogramm "Soziale Marktwirtschaft"

Envisaged final date:

First half of 2019

Description

In this project we examine the relationship between inclusiveness (participation of broad society in the economic and societal processes) and the economic capabilities, the state of development of countries, and which policies and institutions can advance inclusiveness.

Project staff

Univ.-Prof. Dr. Andreas Freytag
Prof. Peter Draper LinkExternal link
Christoph Dörffel
Sebastian Schuhmann

Publications

Peter Draper, Andreas Freytag, Christoph Dörffel, Sebastian Schuhmann, "Trade, Inclusive Development, and the Global Order", Global Summitry, Volume 4, Issue 1, Summer 2018, Pages 30-49, https://doi.org/10.1093/global/guz001External link

Description:

The G7 comprises seven of the world's largest and powerful countries. Although their resolutions are not binding, the annual summits have a major signal effect. Nevertheless, the role of the G7 is repeatedly up for debate, most recently due to system competition with China and the relationship with Russia. This brings up the question of legitimacy of the G7, especially with regard to development policy in Africa.

A current project wants to answer the question of G7 effectiveness with regard to economic development and social welfare in Africa. It examines various G7 initiatives, as well as investments, development assistance, debt relief and trade of member countries with Africa. It aims to evaluate the impact of these factors in the past and to derive policy recommendations for the future.

In addition, there is a book project by Andreas Freytag with Peter Draper on the occasion of the 50th anniversary of the G7 in 2025. The book reviews the history of the group and discuss various topics and different relationships with international actors, all with respect to global governance.

 

Project staff:

• Andreas Freytag
• Moritz Wolf

 

Project partner:

• Peter Draper

Description:

Economic development and climate change represent two of today’s predominant challenges. Policy makers have addressed matters of development cooperation for decades already. Actual development cooperation yet mainly focuses on financing single projects linked to certain – often isolated – objectives. Empirical evidence suggests that the effectiveness of the efforts has remained disappointing. As a consequence, many developing countries face serious problems, mainly with respect to governance. Such a pattern also affects their ability to master current challenges such as climate change.

This is all the more relevant, as current trends in international climate cooperation follow a similar non-comprehensive approach. Countries thus follow national strategies to combat climate change and focus on single policy actions, thereby neglecting the big picture. Developing countries often even lack the resources to combat climate change, although they may be affected most by it. If it cannot be ruled out that ineffectiveness observed in development cooperation islikely to occur in international climate cooperation similarly, political efforts may proof insufficient to meet designated objectives. This can cause high costs for countries across the world.

Therefore, we suggest a global Emission Trading Scheme that addresses both policy fields jointly. Compensating for inequalities in historic emissions, free allowances can be given to developing countries. Those can use the allowances to facilitate incentives from domestic development or sell the allowances to realize financial returns that can be used for investments purposes. This scheme can ensures economic efficiency, ecological effectiveness and social sustainability. The political feasibility of the ETS as a – primarily – climate tool can be increased by issue linkage with development policy.

 

Project staff:

• Andreas Freytag
• Sebastian Schuhmann

 

Projektpartner:

• Matthias Menter
• Jan Hauke Montag

Description

The study has the goal of assess the regional significance of the MV Werften by analyzing there intersectoral linkages in the regional economy. To this end, the regional linkages of the MV Werften with Mecklenburg-Vorpommern, East Germany and overall Germany is analyzed. For the analysis of regional economic importance for Mecklenburg-Vorpommern, the counties, which locate the shipyards will also be considered. These counties are Nordwestmecklenburg (Wismar), Vorpommern-Rügen (Stralsund) and Rostock and the independent Hanseatic City of Rostock. To evaluate the regional economic importance of MV Werften the focus are effects on the labor market as well as effects on the production capacity, output and value added in the region.

Project staff

Univ.-Prof. Dr. Andreas Freytag
Christoph Dörffel, M.Sc.
Dipl.-Volksw. Susanne Fricke
Dr. Wolfgang Bretschneider

Sponsor

MV Werften Wismar GmbH

Duration

June – Dec. 2017

Description

The project deals with current developments in international trade and their economic impact and comprises specifically issues concerning global (and regional) value chains (GVC, resp. RVCs) and their implications for developing and emerging economies with a specific focus on Sub-Saharan African (SSA) countries. Issues which are addressed comprise both the preconditions and challenges for developing countries for GVC integration (see "The potential of ACP countries to participate in Global and Regional Value Chains: A Mapping of Issues and Challenges"External link, with Andreas Freytag and Peter Draper) and implications and new challenges arising from mega-regional trade agreements (see "TTIP: Chancen für Europa, Stimulus für die Welt?"External link, with Andreas Freytag and Peter Draper). In ongoing studies the role of public and private standards in GVCs is scrutinized ("Compliance with appropriate international standards and market access to the European Union: A case study of sub-Saharan countries", with Geoffrey Chapman) and the impact of trade policies on spatial price transmission of maize, rice and wheat in Cameroon, Kenya and Tanzania is assessed ("Spatial price transmission at different levels of the agricultural value chain - evidence from selected sub-Saharan African countries", with Lodovico Muratori). Within the study on the impact of standards in GVCs we analyze the impact of public EU standards on exports from Sub-Saharan-African countries to the EU and the question what determines market access for SSA countries. The market access for SSA countries to the EU is of developmental significance (important determinant of income per capita and average wages) what amplifies the relevance of this research question. Our study on the impact of trade policies on spatial price transmission has its focus on the impact of both tariff and non-tariff barriers on the spatial price transmission of the analyzed products. In particular, the research question is whether trade policies were able to insulate the chosen countries from the price shocks on the international markets during the food price spike crisis.

 

Project staff

Prof. Andreas FreytagExternal link

Susanne FrickeExternal link

Lodovico MuratoriExternal link

Geoffrey ChapmanExternal link

 

Partners

South African Institute of International Affairs (SAIIA)External link (Peter DraperExternal link), Pretoria

Tutwa ConsultingExternal link, Pretoria, Peter DraperExternal link

African Economic Research Consortium (AERC)External link, Nairobi

ACP MTS ProgrammeExternal link, Brussels

International Centre for Trade and Sustainable Development (ICTSD)External link, Geneva, Harsha Singh

Description:

The aim of the Study is to assess the characteristics of Namibian Housing Market and to examine the
possibility of building from 20.000 to 200.000 affordable homes in Namibia in the next five years, as a part
of the Namibian nationwide campaign to fight poverty.
Final goals of the project are: establishing Special Economic Zone in Okahandja (Otjozondjupa Region)
where the facilities for the production of innovative bricks, that are made out of sand and polyester resin,
will be placed and the education of the Namibian workers to operate brick production machinery and
build houses, as well as their education in fields such as electricity, plumbing etc. in training centres.
Furthermore, we are engaged in possible electrification of newly built communities with the help of
renewable energy power sources. Finally, the study addresses the chances for unemployment reduction
and the creation of new sources of income for Namibian families as a side-effect of house building project.

 

Project staff

Prof. Dr. Andreas FreytagExternal link

Morten MüllerExternal link

Dejan DragutinovićExternal link

 

Partners:

Ambassady of NamibiaExternal link

Respective infrastructure ministries of Thuringia and Namibia

PolyCareExternal link Research Technology GmbH & Co. KG from Gehlberg TH

Faculty of Civil EngineeringExternal link, Bauhaus University Weimar

Chair of Economic Policy, Faculty of Economics and Business Administration, Friedrich-Schiller-University Jena

Description:

Social Scientist from various fields search for the understanding of tax evasion. The starting question was: why people evade taxes. This was answered with a rational choice model taking into account the possible gains from evasion together with the detection rate and possible penalties. Later research questioned that view by arguing that with the given auditing rate in our modern societies tax evasion has to be much higher if it is a pure rational choice. So they turned the question into: why people pay their taxes in the first place and put attention to the concept of tax morale. One part of this project is to bring both traditions together by including them in a comprehensive three step model of explanation as a modification of earlier approaches. In this model the three steps are: willingness, opportunity and decision. The last step covers the traditional rational choice view. The willingness step takes into account the idea of tax morale. A big part of this project is to go deeper into the evolution of the willingness to evade. It could be shown that this has something to do with perceived fairness. Three lines of argumentation are especially important. First, people are more likely to be willing to evade taxes if the perceive the tax code as unfair. Second, if people think that tax evasion is widespread they have a higher disposition to do the same. And third, if people feel treated unfair by the government in other ways than the tax code their willingness is increased too. Examples for that are limitations to the business opportunities or economic freedom and repressive system of controls.

 

Partners:

Prof. Dr. F. Schneider

Dr. Alexandra Kloss

 

Beginning and End of Project:

October 2013 – October 2017

Description:

The field of entrepreneurship development in Sub Saharan Africa has been increasingly caught attention in academic as well as policy making. There is evidence that stronger private sector involvement can be the competitive edge and bring about significant and positive change in fighting unemployment. Small and Medium Enterprises (SMEs) as the main driver of job provision should be given more opportunities and initiatives to develop in number and quality. The promotion of entrepreneurship is at the heart of the Social Market Economy model in Germany. Therefore, we want to test application of certain elements of the German economic model with adjustments to the conditions in African countries and ask whether or not they could favour the development of SMEs and thus improve economic efficiency and lay the ground for institutional changes. The research consists of paper-based questionnaires conducted in spring 2016 in two countries, Ghana and Kenya in West and East Africa respectively, to find out how formal and informal institutions affect the performance of business owners, thus paving the way for policy makers to enhance the quality and quantity of SMEs in Africa.

 

Partner:

Konrad-Adenauer-StiftungExternal link, Graduiertenprogramm "Soziale Marktwirtschaft"

Final date:

Nov. 2018

Description:

Governments usually promote trade and globalization as key for development, especially for developing- and under-developed countries. However, previous studies showed that trade would be either better or worsen human life, depending on regions and nations. The question "How trade affects human life?" was an unclear and debatable question for a long time, since theoretical and empirical evidences provided mix results, uncertainty for under-developing area and only partly image in world economy as a whole. This study aims to identify and provide intensive analyses how trade changes life in all aspects in 21st century; not only concerning economic aspects, but also society, politics, environment and psychology. We focus on Sub-Sahara African - the poorest region in the world, with 233 million people suffering from hunger. Base on the fundamental idea of Maslow's hierarchy of needs and The Stiglitz-Sen-Fitoussi dimensions, using advanced econometric instruments, the project will determine impacts of trade liberalization and globalization on essential fields of human life such as income, income distribution, food security, employment, health, environment, human rights. It furthermore suggest solutions for human development. Further, by working intensively on institutional factors, the project will provide more empirical evidences to explain how instituions influence devopment of nations.

Partner:

DAADExternal link

Description:

Most countries in Africa are endowed with abundant natural resources; Southern Africa is no exception. However, ineffective governance and poor management have caused the abundance of resources being a curse. The Sustainable Development Goals (SDGs) are difficult to meet against this background. Amongst the notable resources that serve as sources of foreign exchange earnings for most countries in Southern Africa is tobacco, which is grown in almost all countries in this region. The stream of income from the production and trade of this commodity has helped to cushion the paucity of income at the disposal of governance, and contributed to an improved level of development and livelihood sustainability for the citizens.
Recent calls for the ban on tobacco production and trade by the World Health Organization, through its Framework Convention on Tobacco Control (FCTC) has triggered much directed attention to the question, how the attainment of the 17 SDGs can be achieved without tobacco.
In this project, therefore, we are exploring the role of tobacco production and trade in cushioning the income stream of these countries and the sector's potential contribution to the attainment of the SDGs. The countries in focus are: Malawi, Mozambique, Tanzania, Zambia and Zimbabwe. The project proceeds in three steps:

1. A review of the SDGs, the metrics, the state of the respective countries in the attainment and the contribution of Tobacco Companies towards attaining these goals.
2. The project constructs the Input-Output tables by aggregating the sectors into three (Agriculture, Manufacturing and Services) to determine the interflow and interdependency amongst the sectors. The goal of the Input-Output analysis is to ascertain the role of agriculture in the economy its flows to other sectors.
3. It shows the bilateral trade of the five countries in tobacco production and trade revealing their competitive advantage and the need to sustain the production and trade of commodity. We are deeply interested in the question of whether and to what extent the tobacco industry can contribute to meeting the SDGs in these countries.

Project staff

Prof. Andreas FreytagExternal link

Kehinde MedaseExternal link

Partner:

Tutwa Consulting GroupExternal link

Time frame:

August – November 2016