nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2022‒11‒21
twenty-one papers chosen by

  1. Rallying around the EU flag : Russia’s invasion of Ukraine and attitudes toward European integration By Steiner, Nils; Berlinschi, Ruxanda; Farvaque, Etienne; Fidrmuc, Jan; Harms, Philipp; Mihailov, Alexander; Neugart, Michael; Stane, Piotr
  2. Monthly Report No. 04/2022 By Isilda Mara; Leon Podkaminer; Oliver Reiter; Maryna Tverdostup
  3. A Blind and Militant Attachment: Russian Patriotism in Comparative Perspective By Mikhail Alexeev; William Pyle
  4. Exposure to trade disruptions in case of the Russia-Ukraine conflict: a product network approach By Erik Braun; Emese Braun; András Gyimesi; Zita Iloskics; Tamás Sebestyén
  5. Rebuilding Ukraine: How the EU should support Ukraine's reconstruction and recovery By Bergmann, Julian; Romanyshyn, Iulian
  6. Wiederaufbau in der Ukraine: Wie die EU die Ukraine unterstützen sollte By Bergmann, Julian; Romanyshyn, Iulian
  7. Engaging with partners in the Global South in uncertain times By Klingebiel, Stephan
  8. The effects of sanctions on Russian banks in TARGET2 transactions data By Drott, Constantin; Goldbach, Stefan; Nitsch, Volker
  9. A new landscape for space applications: Illustrations from Russia’s war of aggression against Ukraine By Marit Undseth; Claire Jolly
  10. Ukraine: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for Ukraine By International Monetary Fund
  11. Эконометрический анализ факторов банкротств российских компаний в обрабатывающем секторе By Bekirova, Olga; Zubarev, Andrey
  12. War in Ukraine: The Rationale "Wait-and-See" Mode of Global Food Markets * By Nicolas Legrand
  13. House Price Bubble Detection in Ukraine By Alona Shmygel; Martin Hoesli
  14. Perspectives of Armenian: Iranian economic relations within Belt and Road Initiative By Grigoryan, Karen; Arpanahi, Ali
  15. Diplomatic Stance of the Japanese Business Community in the First World War: Focusing on relations with major warring nations and the concept of economic alliance, in the middle of the war (Japanese) By SAKAMOTO Masazumi
  16. Republic of Madagascar: Second Review Under the Extended Credit Facility Arrangement and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Republic of Madagascar By International Monetary Fund
  17. Managing bank liquidity hoarding during uncertain times : The role of board gender diversity By Davydov, Denis; Garanina, Tatiana; Weill, Laurent
  18. State-business relations and access to external financing By Tkachenko, Andrey
  19. Measuring Human Capital in Europe and Central Asia By Demirguc-Kunt,Asli; Torre,Ivan
  20. Revealed in transition : The political effect of planning’s legacy By Natkhov, Timur; Pyle, William
  21. Political Dividends of Digital Participatory Governance : Evidence from Moscow Pothole Management By Gorgulu,Nisan; Sharafutdinova,Gulnaz; Steinbuks,Jevgenijs

  1. By: Steiner, Nils; Berlinschi, Ruxanda; Farvaque, Etienne; Fidrmuc, Jan; Harms, Philipp; Mihailov, Alexander; Neugart, Michael; Stane, Piotr
    Abstract: This paper uses a survey among students at European universities to explore whether Russia’s invasion of Ukraine has affected attitudes toward European integration. Some respondents completed the survey just before Russia’s assault on February 24, 2022, and some did so just afterwards, thus delivering a quasi-experimental design situation, which we exploit. Our results suggest that the ominous news about the Russian attack increased the participants’ interest in EU politics, consolidated their attachment to the EU, and made them more mindful and appreciative of the benefits of deeper European integration. In effect, the war so close to the EU Eastern border provoked a rally around the supranational EU flag, with convergence of public opinion toward shared European values.
    JEL: F02 F5 H77 N44 Z18
    Date: 2022–10–24
  2. By: Isilda Mara (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw); Maryna Tverdostup (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Chart of the Month Eastern Europe at the forefront of the Ukrainian refugee crisis by Isilda Mara Opinion Corner Ukrainian refugees – will they stay in the EU long-term? by Maryna Tverdostup As EU labour markets face an inflow of refugees unseen since World War II, the question of economic and social integration is beyond urgent. With war developments still fluid, one cannot assess whether people aim for a permanent or short-term stay in the EU and thus, whether the policy focus should be on temporary or permanent employment. Yet a number of factors driving the intention to stay can be debated. Pre-war trade and value chain integration of Russia and Ukraine with the EU and EU-CEE by Oliver Reiter Both gross and value added exports from Russia to the EU have declined since 2014. By contrast, Ukraine’s trade integration with the EU has been on the rise. Still, Russian value added is a crucial input in some EU-CEE countries’ industries. The ‘Great Disinflation’ How important was the ‘China Factor’? by Leon Podkaminer Contrary to common belief, China’s integration into the global manufacturing system does not seem to have depressed wage shares in the advanced countries. If anything, it also failed to raise unemployment rates in the advanced countries. The ‘Great Disinflation’ theory advanced by Goodhart and Pradhan (2020) is unconvincing, and so is their conclusion that the approaching great demographic reversal augurs an inflation revival. Monthly and quarterly statistics for Central, East and Southeast Europe
    Keywords: refugees, labour market integration, gross exports, value added trade, sanctions, trade policy, advanced countries, China, ‘great disinflation’, wage share
    Date: 2022–04
  3. By: Mikhail Alexeev; William Pyle
    Abstract: Much of the literature on patriotic sentiment in post-Soviet Russia leans on the results of public opinion surveys administered to Russian citizens. Absent a comparison group, such evidence, while helpful, can leave one adrift in trying to assess the significance of any particular polling result. Here, we draw on a shared set of questions from multiple waves of the Inter-national Social Survey Program’s National Identity and Role of Government modules, as well as the World Values Survey, to benchmark the responses of Russians to those of citizens in a diverse group of middle and high income countries. This exercise highlights that while Russians are not unusual in the degree to which they have a benign attachment to and/or pride in their country, they stand out for espousing a patriotism that has remained consistently blind and militant since at least the mid-1990s. We speculate as to the underlying cause and highlight a potential consequence: the nature of Russian patriotism has lowered the cost to the Russian leadership of military aggression.
    Keywords: patriotism, Russia, post-imperial syndrome
    JEL: P00 P20
    Date: 2022
    Abstract: The recent outbreak of the Russia-Ukraine military conflict is expected to affect the world economy through global value chains due to sanctions imposed on the Russian economy and a severe decline in Ukrainian production. This study provides a first-cut analysis of the possible economic impact of this war on third countries. Using product-level export data from international trade statistics, we first identify the most important products exported by Ukraine and Russia. Then, applying a comprehensive indicator of exposure, we measure the dependence of third countries on products imported from Ukraine or Russia, taking into consideration indirect trade connections and the substitutability of imports with domestic production. The results show that Ukraine is dominant in global trade through exporting iron products and agricultural products, while Russia is important through exporting energy sources, raw materials, and iron products. Analysing countries’ total exposures, we found that the post-Soviet and European countries have high exposure to Russian imports, confirming the energy dependence of these countries. The Middle East and African countries heavily depend on Ukraine, especially for grain imports, possibly causing food security problems. Finally, the results explain why some European countries hesitate to apply sanctions on Russia in the field of energy sources.
    Keywords: International trade, Global value chains, Russia-Ukraine war, Network analysis, Exposure.
    Date: 2022–05
  5. By: Bergmann, Julian; Romanyshyn, Iulian
    Abstract: Russia's brutal war against Ukraine has disastrous consequences for the country. Although an end to the war is currently not in sight, it is already clear that a huge international effort will be required to support Ukraine's reconstruction. At the Ukraine Recovery Conference in July, the Ukrainian government presented a National Recovery Plan that envisions a deep modernisation of the country. The Ukrainian government's reconstruction priorities are well in sync with the European Union's (EU) ambition to promote Ukraine's transformation towards an EU member state and to foster the country's green and digital transition. The National Recovery Plan fully embraces the "build back better" principle and closely aligns the reconstruction plans with the EU's norms and standards. The EU, on its part, is willing to bear a major share of the international effort required for Ukraine's recovery. However, the same degree of unity and resolve that the EU showed when forging its initial response to the war will be needed to realise a strong EU leadership role in supporting Ukraine's long-term reconstruction. To provide a sustainable basis for Ukraine's recovery, the EU and member states need to combine ad hoc humanitarian assistance with predictable, long-term support for reconstruction. In doing so, they should consider the following key recommendations: Adopt a two-phase approach to reconstruction. The modernisation and transformation of Ukraine towards an EU member state will take several years. At the same time, the vast infrastructure losses that Ukraine is currently facing need to be addressed urgently, ideally before the winter sets in. Hence, international donors should prioritise the reconstruction of infrastructure related to basic needs, including schools, hospitals, housing, electricity grids and roads. In a second phase, deeper modernisation efforts and institutional reforms that are of relevance for eventual accession to the EU should follow. Set up adequate governance mechanisms for the joint management and oversight of reconstruction efforts. The Ukrainian government and the EU should set up a coordination platform that also involves other international partners and Ukrainian civil society actors. This platform should then develop institutional governance mechanisms for the management and oversight of projects, and ensure close coordination between the Ukrainian government and international partners. Negotiate a comprehensive agreement on the EU's contribution to the reconstruction of Ukraine. A timely agreement on the governance and funding of the EU's long-term assistance to Ukraine is needed. A mixed strategy that includes borrowing capital on behalf of the EU on the markets and funnelling additional contributions by member states to the EU's budget might be a potential way forward. In addition, the EU should swiftly examine legal possibilities to channel sanctioned Russian assets towards Ukraine's recovery. Continue and expand military assistance to Ukraine. Substantive investments in Ukraine's reconstruction should not come at the expense of necessary military aid. One priority should be to strengthen Ukraine's ability to protect its skies against Russian missile attacks. Moreover, the EU should realise its plans for an EU military training mission, provided that it creates real added value to existing efforts and matches Ukrainian needs.
    Keywords: Ukraine,European Union,EU foreign policy,Russia's war in Ukraine,Ukraine's reconstruction,development assistance,humanitarian aid,macro-financial assistance,European Peace Facility
    Date: 2022
  6. By: Bergmann, Julian; Romanyshyn, Iulian
    Abstract: Russlands brutaler Angriffskrieg auf die Ukraine hat katastrophale Folgen für das Land. Zwar ist aktuell kein Ende des Krieges in Sicht, doch ist bereits absehbar, dass es enormer internationaler Anstrengungen bedürfen wird, um die Ukraine beim Wiederaufbau zu unterstützen. Auf der Ukraine Recovery Conference im Juli stellte die ukrainische Regierung einen nationalen Wiederaufbauplan vor, der eine tiefgreifende Modernisierung des Landes vorsieht. Die Prioritäten, die die ukrainische Regierung für den Wiederaufbau setzt, lassen sich gut mit dem Ziel der Europäischen Union (EU) vereinbaren, die Ukraine fit für einen EUBeitritt zu machen und den grünen und digitalen Wandel des Landes voranzutreiben. Die EU ist ihrerseits bereit, einen großen Teil der für den Wiederaufbau der Ukraine erforderlichen internationalen Anstrengungen zu stemmen. Allerdings muss die EU, will sie beim langfristigen Wiederaufbau der Ukraine eine starke Führungsrolle übernehmen, genauso viel Einigkeit und Entschlossenheit zeigen wie zu Kriegsbeginn. Um eine nachhaltige Grundlage für den Wiederaufbau der Ukraine zu schaffen, müssen die EU und die Mitgliedstaaten humanitäre Ad-hoc-Hilfe mit verlässlichen, langfristigen Wiederaufbaumaßnahmen kombinieren. Dabei sollten sie die folgenden zentralen Empfehlungen berücksichtigen: Einen zweistufigen Ansatz für den Wiederaufbau verfolgen Die Modernisierung und Vorbereitung der Ukraine für einen EU-Beitritt werden mehrere Jahre dauern. Gleichzeitig müssen die enormen Infrastrukturverluste in der Ukraine dringend behoben werden, am besten noch vor dem Wintereinbruch. Daher sollten die internationalen Geber dem Wiederaufbau der kritischen Infrastruktur Vorrang einräumen, wie etwa Schulen, Krankenhäusern, Wohnungen, Stromnetzen und Straßen. In einer zweiten Phase sollten umfassendere Modernisierungsmaßnahmen und institutionelle Reformen für einen EU-Beitritt folgen. Geeignete Steuerungsmechanismen für den Wiederaufbau einrichten Die ukrainische Regierung und die EU sollten eine Koordinierungsplattform einrichten, an der auch andere internationale Partner und Akteure der ukrainischen Zivilgesellschaft beteiligt sind. Sie sollte dazu dienen, institutionelle Mechanismen zur Steuerung und Überwachung der Projekte zu entwickeln, und eine enge Koordinierung zwischen der ukrainischen Regierung und internationalen Partnern ermöglichen. Ein umfassendes Abkommen über den Beitrag der EU zum Wiederaufbau der Ukraine aushandeln Es braucht zeitnah ein Abkommen über die Steuerung und Finanzierung der langfristigen EU-Hilfe für die Ukraine. Möglich wäre eine kombinierte Strategie, die eine gemeinsame Kreditaufnahme durch die EU und zusätzliche Beiträge der Mitgliedstaaten zum EU-Haushalt umfasst. Darüber hinaus sollte die EU zügig rechtliche Wege prüfen, um eingefrorene russische Vermögenswerte für den Wiederaufbau der Ukraine einzusetzen. Die Militärhilfe für die Ukraine fortsetzen und ausweiten Umfangreiche Investitionen in den Wiederaufbau der Ukraine dürfen nicht zu Lasten der notwendigen Militärhilfe gehen. Zuallererst sollte die Ukraine dabei unterstützt werden, ihren Luftraum gegen russische Raketenangriffe zu verteidigen. Darüber hinaus sollte die EU ihre Pläne für eine militärische Ausbildungsmission verwirklichen, vorausgesetzt, sie schafft einen echten Mehrwert zu den bestehenden Bemühungen und entspricht dem ukrainischen Bedarf.
    Keywords: Ukraine,Europäische Union,EU-Außenpolitik,Russlands Krieg in der Ukraine,Wiederaufbau der Ukraine,Enwicklungszusammenarbeit,humanitäre Hilfe,makrofinanzielle Hilfe,European Peace Facility
    Date: 2022
  7. By: Klingebiel, Stephan
    Abstract: Having already been growing in importance for a number of years, geopolitics as it relates to the Global South has become tremendously more relevant following Russia's aggression in Ukraine in 2022. Rivalries with China are set to become even more influential in future, determining intergovernmental relations as a whole. Following the Russian invasion in February 2022, attention was initially concentrated on the stances adopted by states regarding the corresponding UN resolutions and UN debates. This focus alone illustrates the great significance attached to the positions taken by states and thus to strategic partisan thinking. At the same time, it would seem that none of the country alliances being formed to date differ fundamentally from those of recent years. Many developing countries are capitalising on their emancipated status gained in recent decades to formulate positions of their own, as well as to identify any double standards on the part of Western governments. It is important that German, European and other political players gain a better idea of the interests and perceptions of partners in the Global South. In development terms, Russia's war of aggression represents a watershed moment. It is important to note the following in this context: * At overall level, it will most likely be more difficult to achieve the 2030 Agenda, with its 17 SDGs (Sustainable Development Goals). The COVID-19 pandemic had already produced a huge socio-economic shock in the Global South, but this has now been dwarfed in many developing countries by the impact of the war. On top of this, the increasingly critical effects of climate change are proliferating all the time. * While the most severe consequences of the Ukraine war are being felt by the country itself (need for comprehensive humanitarian assistance; future need for large-scale reconstruction work) and the surrounding region (refugee care, etc.), the surge in food and energy prices resulting from the conflict is having a major impact on developing countries. * There are also other long-term challenges in regard to global sustainable development. Take innovative cooperation instruments for tackling climate change, for instance, the most prominent of which are just energy transition partnerships (JETP). The legitimacy of efforts to promote these ambitious cooperation initiatives could be undermined by European countries introducing short-term measures that involve a return to fossil fuel investment. * The growing need to overcome cross-border challenges could intersect with cutbacks being made by donor countries to their long-term development programmes. For example, some nations (particularly the UK and, in some cases, Germany) may scale back funding or increasingly charge for providing in-donor refugee costs and thus move to report a number of their activities as Official Development Assistance (ODA) (as planned by the Netherlands and Norway, for instance). * We can expect the Ukraine war to reinforce the general trend towards interest-based development policy and increase demand for approaches that deliver quick results. Nevertheless, it is not possible to derive a clear regional, thematic or country allocation pattern from this trend. * The issue of governance in developing countries is receiving greater attention in light of the risks posed by autocratic systems. The increase in cooperation with China and Russia, two nations employing their own global discourse in an attempt to promote what they refer to as 'real democracy', is especially indicative of the way China in particular is striving to influence global debate.
    Keywords: Development policy,Global South,West,Russia,Pandemic,Africa,China
    Date: 2022
  8. By: Drott, Constantin; Goldbach, Stefan; Nitsch, Volker
    Abstract: This short paper examines the effect of financial sanctions at the most disaggregated level possible, individual bank accounts. Using data from the Eurosystem's real-time gross settlement system TARGET2, we provide empirical evidence that sanctions imposed by the European Union on Russian banks following the country's military interventions in Ukraine in 2014 and 2022 have sizably reduced financial transactions with sanctioned Russian bank accounts. Among the various sanction measures taken, exclusion from SWIFT, a global provider of secure financial messaging services, turns out to have the largest effects.
    Keywords: financial flows,transactions,restrictions
    JEL: F38 F51 G28
    Date: 2022
  9. By: Marit Undseth; Claire Jolly
    Abstract: For decades, governments have relied on space systems for intelligence gathering and satellite connectivity in remote areas, but today’s situation marks a distinct break with the past. Extended coverage, advances in digital technologies and, importantly, free and/or commercial availability of space products allow many new uses by both government and non-government actors. This brings important benefits for users and citizens, but also leads to new challenges in terms of data management, infrastructure and supply chain resilience, and international co-operation. This paper uses illustrations from the war in Ukraine to highlight recent developments in the sector, placing them in a broader context of digitalisation and government space investments. It discusses the growing importance of space technologies for society and provides policy options and resources from other strains of OECD work.
    Date: 2022–11–04
  10. By: International Monetary Fund
    Abstract: The Russian invasion of Ukraine that started over seven months ago has caused large loss of life, large population displacement, and significant infrastructure damage. The impact on economic activity has been enormous: real GDP has severely contracted, inflation has risen sharply, trade has been significantly disrupted, and the fiscal deficit has ballooned to unprecedented levels. In the immediate aftermath of the invasion, the authorities quickly adapted monetary and exchange rate policies to preserve financial and exchange rate stability. More recently, and to help reverse significant international reserves loss, the exchange rate was devalued, helping to stabilize FX reserves and maintain overall macroeconomic and financial stability. Fiscal policy has been geared to priority spending on defense, social benefits, humanitarian needs, and where possible some fixing of critical infrastructure. Uncertainty around the size of financing needs remains extremely elevated and highly dependent on the length of the war and its intensity, and economic risks loom large, including those related to potential additional damage to critical infrastructure or new disruptions to the agricultural and energy sectors.
    Keywords: emergency financing needs; financing needs; financing gap; government institution; RFI support; Credit; Exports; Balance of payments need; Global
    Date: 2022–10–19
  11. By: Bekirova, Olga; Zubarev, Andrey
    Abstract: This work is devoted to the analysis of the factors influencing the bankruptcy of the Russian manufacturing industry companies for the period from 2012 to 2020. Logistic regression was used as an econometric tool for the modelling the probability of companies’ default. According to the results, financial indicators of profitability, liquidity and business activity play a significant role in explaining the probability of default of Russian manufacturing companies. Special attention was paid to the impact on the probability of bankruptcy of corporate governance and ownership structure factors. First, including these indicators into the model led to an increase in its predictive power. Secondly, CEO-duality increases the stability of the company, and too high maximum share of ownership increases the likelihood of bankruptcy.
    Keywords: probability of default, logistic regression, corporate governance.
    JEL: C25 C51 G32 G33 G34 L60
    Date: 2022–06
  12. By: Nicolas Legrand (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: Russia's invasion of Ukraine is a major shock at the heart of the breadbasket of Europe at a time when global stocks are running short. With inelastic supply and demand for such basic goods and lack of inventories to cushion the shock, the basic economics of storage arbitrage explain the commodity price spikes needed to ration the war-related supply shortage. In this paper, I show that to make sense of the chaotic price fluctuations requires a consistent empirical tool such as the storage model with rational expectations. Empirical analysis of the unfolding commodity shock using a storage model lens suggests that the global food market is currently in a "wait-and-see" mode, with price movements reflecting a loss in the size of the global share of caloric production from Ukraine. I show also that the supply and demand outlook for the next two years is aligned to the price expectations of market participants and send the signal that the world should prepare for a period of scarcer supply and high and volatile food prices, for as long as the conflict lasts. Sound policymaking in this context could rely on this normative device to ease the suffering of the most vulnerable populations who are at risk of hunger and malnourishment.
    Keywords: Storage,Volatility,Food security,Commodity price dynamics
    Date: 2022–10–10
  13. By: Alona Shmygel (National Bank of Ukraine); Martin Hoesli (University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Aberdeen - Business School)
    Abstract: The purpose of this paper is to build a framework for the assessment of the fundamental value of house prices in the largest Ukrainian cities, as well as to identify the thresholds, the breach of which would signal a bubble. House price bubbles are detected using two approaches: ratios and regression analysis. Two variants of each method are considered. We calculate the price-to-rent and price-to-income ratios that can identify a possible over- or undervaluation of house prices. Then, we perform regression analyses by considering individual multi-factor models for each city and by using a pooled OLS model with panel data. The only pronounced and prolonged period of a house price bubble is the one that coincides with the Global Financial Crisis. The bubble signals produced by these methods are, on average, simultaneous and are in accordance with economic sense.
    Keywords: house price bubbles, fundamental house prices, mortgage lending, systemic risk, regression analysis, Ukraine.
    JEL: R31 R38
    Date: 2022–10
  14. By: Grigoryan, Karen; Arpanahi, Ali
    Abstract: Armenia-Iran North South Transport corridor is vital for Iran and Armenia and also for all parties involved. Recently, India increased its interest in Armenia and would like to see the INSTC passing through the Armenian territories, keeping in mind that Armenia is also the only country in the EAEU that has a land border with Iran. Taking into account Iran's desire to become a full member of the EAEU in the future, as well as India's interest in the EAEU structure and possible future membership, Armenia's chances of joining regional trade projects would be high. North South Transport Corridor route via India, Iran, Armenia, Georgia and Russia. This route is 30% cheaper and 40% shorter than the current traditional route. A country with a small domestic market like Armenia, of course, needs to expand its economic and trade ties with other countries in the world. The "One Belt, One Road" initiative can provide such an opportunity. An opportunity will also be created for the development of the Armenian transport infrastructure. Armenia aimed to construct the "North-South" transport road, 550-km long, to facilitate communication with Iran and Georgia and beyond.
    Keywords: Belt and Road Initiative,Armenia,Iran,China,India,trade,transport infrastructure,Silk RoadRoute
    Date: 2022
  15. By: SAKAMOTO Masazumi
    Abstract: The history of Japan's foreign relations during the First World War can be thought of as having two currents: a diplomatic history centered on the Asia-Pacific region, mainly in terms of Chinese interests and relations with the United States connected with that history, and a trade history which is described as the term of economic growth. However, little attention has been paid to the relationship between the two, e.g., the business community's interests regarding Japan's foreign policy. The analysis of the tone of the major economic newspapers in the mid-First World War period and the trade chronology compiled by the Ministry of Finance reveal that the business community had certain diplomatic interests toward the major warring nations of the First World War, such as Britain, Russia, and Germany, depending on their trade situation. At the same time, they reveal that the business community had expressed significant concern about the concept of the inter-Allied economic alliance, including a postwar regime, and decoupling from antagonist countries, as discussed at the Economic Conference of the Allies in 1916. The results suggest that considering the intentions (interests) of the business community while determining Japan's foreign policy is significant at a time when trade and diplomacy are closely linked.
    Date: 2022–10
  16. By: International Monetary Fund
    Abstract: Madagascar has not yet recovered from the pandemic and is struggling with the aftermath of a severe cyclone season and the fallout of Russia’s war in Ukraine. After a sharp contraction of GDP in 2020 (-7.1 percent) and a modest recovery in 2021 (4.3 percent), growth is projected to stall in 2022. Lower demand from trading partners, higher fuel and food prices, and recent weather events are weighing on economic activity and leading to widening fiscal and external deficits in the short term.
    Date: 2022–09–23
  17. By: Davydov, Denis; Garanina, Tatiana; Weill, Laurent
    Abstract: This paper examines the effect of executive board gender diversity on the relationship between economic policy uncertainty (EPU) and bank liquidity hoarding (LH). We focus on the Russian banking sector, which, relative to most of the world, has a high share of women on bank executive boards. Using the news-based EPU index developed by Baker, Bloom, and Davis (2016) and LH measures proposed by Berger, Guedhami, Kim, and Li (2022), we exploit a unique dataset from the Russian banking sector. While higher economic policy uncertainty tends to increase liquidity hoarding, we find this effect diminishes as gender diversity of the board increases. We attribute this finding to the moderating influence of gender diversity on stability and overreaction in decision-making. Additionally, we find that the channel through which board gender diversity affects the impact of economic policy uncertainty on liquidity hoarding takes place via the hoarding of liquid assets. Our findings are robust to the use of alternative measures for economic policy uncertainty and gender diversity. As women are still significantly under-represented on bank boards in most countries, these results argue for policies to promote gender diversity of bank boards as a means of limiting detrimental effects of economic policy uncertainty.
    JEL: G18 G21 G34 P26
    Date: 2022–11–02
  18. By: Tkachenko, Andrey
    Abstract: Firms' contractual relations with a state may give lenders a positive signal and facilitate access to debt. This paper studies the impact of public procurement contracts on firms' access to debt using an extensive survey of Russian manufacturing firms combined with accounting and procurement data. It shows that earnings from state-to-business contracts increase the short-term debt twice as much as revenue from private contracts. Long-term debt is not affected by public contracts differently compared to private contracts. The debt sensitivity to public contracts is four times larger for politically connected firms, although it is still positive and significant for non-connected and small firms. The paper concludes that political connection does not entirely suppress the beneficial access to debt that public contracts create.
    JEL: G18 G32 H57
    Date: 2022–10–25
  19. By: Demirguc-Kunt,Asli; Torre,Ivan
    Abstract: This paper outlines an extension of the Human Capital Index that addresses the specificchallenges in education and health faced by countries in Europe and Central Asia. Good basic education will not beenough, as job markets today demand higher levels of human capital than in the past. As the region’s population becomesolder, it is important that adults remain healthy to ensure productive aging. The Europe and Central Asia Human CapitalIndex (ECA-HCI) extends the Human Capital Index by adding a measure of quality-adjusted years of higher education to theoriginal education component, and it includes the prevalence of three adult health risk factors -- obesity, smoking, andheavy drinking -- as an additional proxy for latent health status. This extension of the Human Capital Index could alsobe useful for assessing the state of human capital in middle-income countries in general.
    Keywords: Educational Sciences,Health Care Services Industry,Tertiary Education,Primary Education,Disease Control & Prevention
    Date: 2020–10–27
  20. By: Natkhov, Timur; Pyle, William
    Abstract: Decades of investment decisions by central planners left communist societies with structures of production ill-prepared for competitive markets. Their vulnerability to liberalization, however, varied across space. Similar to the effects identified in the “China shock” literature, we hypothesize that post-market-shock outcomes will reflect pre-market-shock structures of production. Tracking voting outcomes at the district level in Russia’s presidential elections, we document asymmetric reactions to the liberalization of markets in 1992. Electoral support for the pro-market incumbent declined most in areas with structural inheritances that made them most vulnerable to reforms. This finding sheds new light on an old debate about the importance of “initial conditions” (as opposed to policies) to the trajectories of post-communist societies.
    JEL: N14 N44 P00 P23
    Date: 2022–11–07
  21. By: Gorgulu,Nisan; Sharafutdinova,Gulnaz; Steinbuks,Jevgenijs
    Abstract: This study takes advantage of a publicly salient policy sphere -- road quality -- in the Russian Federation's capital city to explore the use of digital technologies as means of aggregating information and demonstrating government capacity and effectiveness. It focuses on the potential linkage between road quality based on citizens' complaints and electoral outcomes in two rounds of Moscow mayoral elections in 2013 and 2018. The data on more than 200,000 online potholes’ complaints were collected and combined with local election data. The causal relationship between these two processes is established, making use of an arguably exogenous variation in the differences across local weather conditions during the heating season that differentially affects pothole creation but is uncorrelated with electoral outcomes. The results indicate that greater use of digital technologies (measured by pothole complaints) results in an increased number of votes and a higher margin of victory for the incumbent. They highlight digital technologies' role as a tool to create participatory governance mechanisms and convey to the public an image of a transparent, responsive, and capable government.
    Keywords: Information Technology,Transport Services,Urban Housing and Land Settlements,Urban Governance and Management,Municipal Management and Reform,Urban Housing,De Facto Governments,E-Government,E-Government,Public Sector Administrative and CivilService Reform,Economics and Finance of Public Institution Development,Democratic Government,E-Government,Public Sector Administrative&Civil Service Reform
    Date: 2020–10–20

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