Domestic Policy Change Research Articles

GLOBALIZATION AND DOMESTIC POLICY CHANGE: THE CASE OF MANDATORY PALM OIL CERTIFICATION POLICY IN INDONESIA

Indonesia has gained its reputation as the one of the largest oil palm producer. The sustainability of Indonesian palm oil, however, being argued since the expansion often created various impacts. For instance, the draining and burning peatland for palm oil plantation were sent huge amount and carbon emissions which responsible for climate change and global warming. These climate change and global warming, however, deeply linked with the globalization process, which in the end influencing the domestic policy making. This paper aims to improve the understanding on how various transnational actors, institutions, and norms influence domestic policy change. As a case study, we examine the influence of globalization on the initiation of the Indonesian Palm Oil Standard (ISPO) standards policy, which was published by the Indonesian Ministry of Agriculture in 2011. As the theoretical framework. the four paths of globalization and domestic policy change proposed by Bernstein and Cashore (2000) are applied. Our case study suggests that economic globalization, which produces high palm oil demand, is the primary catalyst for this policy change. Secondly, we note the influence of transnational actors, who exert market pressure, on the extant Indonesian palm oil industry policy. The other notable influence triggering ISPO initiation was from international institutions and norms. Our case study, did not, however, find support for transnational actor direct access to the policy process. Nevertheless, following to the ISPO official publication, the four pathways started to evolve again through various constellations.

Poland’s Foreign Policy Under the Rule of the Law and Justice Party

Poland was the first country in Central Europe to start dismantling the political system of ‘real socialism’ in 1989 and has become a pioneer of democratic and market reforms. After 10 years it was admitted to NATO and after 15 years to the European Union. Then, gradually, populism, nationalism and Euro-skepticism began to grow in Poland, which was evident in the years 2005-2007, during the first edition of rules of the conservative-nationalist Law and Justice (PiS) party. After the next eight years of the pragmatic approach of the Polish governments towards European integration, the PiS assumed full power in the country in 2015. The new president and the PiS government began systematic changes in domestic and foreign policy. Populism, illiberalism and authoritarianism began dominating in Polish internal politics, and nationalism and Euro-skepticism in foreign policy. The most important new phenomena in the foreign policy of the PiS government are: (a) the bi-lateralization and militarization of security policy based on the strategic partnership with the US; (b) Euroskepticism: anti-Brussels posturing and disputes with Germany and France; (c) Poland’s nationalistic and great-power approach to Russia; and (d) Three Seas Initiative as a dream of Poland’s greatness. The consequences of this Poland’s politics are detrimental to itself and to the international environment. It has reduced the importance of Poland as a state in Europe and the world. The world’s perception of Poland is increasingly unfavorable among democratic countries, and more favorable among other illiberal countries. But it is not favorable with all illiberal countries, because the nationalism that accompanies Polish illiberalism makes it impossible to improve relations with other not fully democratic or downright undemocratic countries, especially Poland’s eastern neighbors. Poland’s foreign policy is facing serious challenges, some of which Poland created on its own and is unable to address effectively. This means that there is a growing problem of incompatibility between Poland’s policies and the changing international order.

Research on China’s Higher Education Delivery Offshore in the Post-Pandemic Era

Offshore education, as an effective way to enhance the international flow of education service and an efficient platform for the higher education interconnection and knowledge sharing all around the world, is a significant part of the “opening-up” strategy of education made by China’s Ministry of Education. However, Chinese universities and colleges which plan to run school offshore are currently facing challenges such as the great changes of global governance, the spread of Covid-19 pandemic, the changes in domestic laws and policies and the greater participation of vocational colleges. This should be attached more importance by researchers and policy makers in order to find an innovative and appropriate mode of international cooperation and exchange in the post-pandemic era. Based on the analysis of definitions of higher education delivery offshore and the theoretical and practical causes of the challenges, Chinese universities should clarify the orientation and direction, attach importance to the development of vocational schools offshore, promote overseas schools to become offshore platform for innovation and international exchange, and enhance the international competitiveness of oversea schools by full advantages of government, universities, enterprises and industry organizations.

Does economic policy uncertainty undermine stability of agricultural imports? Evidence from China.

China is the world’s largest importer of agricultural products. Stability of agricultural imports directly affects domestic food availability, and hence influences national food security. This study is important to gauge effects of uncertainty resulting from global and domestic economic policy changes on the stability component of food security in China. Though many studies have explored the determinants and consequences of Chinese agricultural trade, research focusing on stability of agricultural imports is lacking. To fill the gap, this study calculates duration length and survival probability of China’s agri-food imports, and estimates effects of economic policy uncertainty (EPU) on the stability. Results show that trade duration of the agri-food imports is 12.07 months in China. However, 51.69% of disrupted trade relationships would resume after 2 months and 92.68% of temporarily interrupted trade relationships return to the market after 12 months. Empirical estimations show that global EPU has a larger impact on the stability of agricultural imports than Chinese EPU. Although Chinese EPU has heterogeneous effects on imports of different agri-food products in China, global EPU does not. Stabilized domestic food price and improved domestic agricultural productivity would improve stability of the imports significantly. The study concludes that China’s agricultural imports are less dynamic than previous studies claimed. However, EPU significantly erodes the trade stability. To offset negative effects of EPU on the stability, government should pay more attention on stabilizing domestic food price volatility and increasing food productivity, and therefore improve food security in China.

Policy translation and dynamics: The role of Dutch ideas in developing South Korea's coastal management policies

In the literature on coastal land reclamation and ecological restoration policies, the role of policy translation has received limited attention vis-à-vis domestic political factors. This paper addresses this knowledge gap by clarifying the role of Dutch actors in developing South Korea's coastal management policies. To do so, we first develop an analytical framework that operationalizes the ‘policy translation’ concept into distinguishable components. This framework is used in the analysis of Korean land reclamation and wetland restoration policies. Our analysis reveals that in both cases no full-fledged policy transfer has occurred but that powerful domestic actors used other countries' policy elements to shape national discourses. Based on our analysis, we discuss the role of policy translation in understanding domestic policy change. We conclude that developing large water management projects is inherently political and the input of external ideas are no exclusion to this. Therefore, our paper makes a case for a more combined and integrated assessment of the role of both foreign and domestic factors in future studies on the development of coastal management policies.

EUROPEAN INTEGRATION: ADVANTAGES AND THREATS TO UKRAINE’S FOREIGN TRADE

Background. In terms of unfavorable external conditions and a significant deterioration of the socio-economic situation, the Ukrainian market has stagnated. Russia’s actions, including its unilateral suspension of the Free Trade Agreement, have led to a reduction in Ukraine's bilateral foreign trade operations. The processes of globalization and integration issue new challenges to the economy of any country, in particular, the questions of evaluation and stimulation of foreign trade of enterprises emerge in the conditions of constant transformation. Therefore, the aim of this study is to identifytrends and features of Ukraine’s foreign trade in the context of globalization and integration. Materials and methods. The article is based on a synthesis of research results of domestic and foreign scientists to determine the main influencing factors of cooperation with the EU on the state of development of Ukraine’s foreign trade. Research on this issue was conducted using the methods of theoretical generalization, analysis and synthesis. Results. Ukraine’s position in world trade is determined by the main factors: the dynamics of GDP, rating and index of economic freedom. The peculiarities of Ukraine's foreign trade over the last decade have been studied, the main partner countries; the main challenges that arise in our foreign trade as a result of European integration processes have been identified. It is proved that in the analysis of GDP it is expedient to use the indicator of GDP calculated on purchasing power parity. It is established that in the conditions of the world crisis, the war in the east caused the greatest damage to the economy of Ukraine. It was clarified that Ukraine needs to expand the geography of foreign trade relations, at the same time there is a significant unrealized potential for the development of bilateral relations with EU countries. Conclusion. Ukraine must follow the chosen course of European integration, but at the same must also develop other partnerships with countries on other continents. Unfortunately, Ukraine exports more raw materials and goods with low added value. Therefore, there is a need: to change the content of exports, to introduce tax and customs instruments to support exports, to amend the Association Agreement in terms of international trade. The structure of foreign trade does not stimulate Ukraine's economy to innovative development, so there is an urgent need for domestic policy reforms and changes in external priorities.

NATO – a Key Platform of Ukrainian-Canadian Security Cooperation

The assessment of the state of security cooperation between Ukraine and Canada on the NATO platform is carried out in the context of the study of Ukraine's role in Canada's actual security policy. The importance of such a study is determined by the priority of solving urgent problems in the field of international support for national security and the implementation of the foreign policy course for Euro-Atlantic integration of our state. The existence of significant threats to the national security of Ukraine in the context of conflict with Russian Federation determines the relevance of studying the theoretical and practical aspects of cooperation with key foreign partners to counter security challenges. Canada remains a staunch supporter of Ukraine’s state sovereignty, regardless of temporary changes in domestic and foreign policy. Such a consistent position of Ottawa defines the significance and effectiveness of the special partnership of this state with Ukraine, in particular, in the field of security policy. The article reviews the main aspects of Ukrainian-Canadian cooperation within NATO as the main multilateral security platform for Ukraine. An important component of Canadian support for Ukraine is the desire to bring Ukrainian military, social and democratic standards in line with the standards of NATO member countries. In this context, Canadian practical and expert experience is extremely important for our country. We are constantly confirming this in the process of meaningful Ukrainian-Canadian political dialogue within international organizations and NATO in particular. Thus, Ottawa actively supports Ukraine's efforts for Euro-Atlantic integration and plays an important role in filling the practical content of Kyiv's cooperation with the Alliance in the military-political and humanitarian spheres.

The Covid-19 Pandemic and the Political Situation in France before 2022 Elections

The article explores the political situation in modern France the year before the next presidential election. It is revealed that during Emmanuel Macron’s presidency, a social divide between wealthy and poor social groups has taken root in the country manifested in the “yellow vests” movement and a wide-range public disagreement with the reforms proposed by the government. The negative impact of the Covid-19 pandemic, which overlapped with the previous contradictions and aggravated them, is discussed. The article also shows that, apart from the “National Rally”, no other political forces now represent a real opposition to Macron’s policy, thus helping him to keep relatively high chances for re-election. This is especially true in case of two traditional parties – the Republicans and the Socialists – which have suffered from a profound internal crisis. In conclusion, regarding a likely contest between Macron and Le Pen in 2022, prospects of changes in domestic and foreign policy of France after the election are formulated. The author concludes that even in the “Le Pen wins” scenario, any innovations will have a limited impact, taking into account the role of continuity in the French state policy and the growing moderation of the far right platform.

The New Saudi Leadership and Its Impact on Regional Policy

ABSTRACT The radical transformation of the Saudi Kingdom underway since early 2015 raises the core issue of Crown Prince Mohammad Bin Salman’s legitimacy. By balancing his defiance of the royal family through the popular support of Saudi youth, the Crown Prince seeks to consolidate his power, which reverberates in substantial changes in domestic governance and foreign policies. The assertive regional policy under King Salman and his heir also revealed tensions arising from their divergent world visions due to a generational gap. This has resulted in an incoherent and downgraded Saudi leadership in the Middle East and North Africa (MENA) region. This illustrates how domestic decision-making affects actors’ choices in foreign policy, contributing to the theoretical debate that integrates foreign policy analysis into International Relations (IR) theory.

Рождение американской прессы: исторический опыт и проблемы развития

The article reviews the origin of American press as an essential idea in genesis of the state power. The author demonstrates a strong correlation between domestic policy and evolutionary changes in local press, also analyzes the key events in chronicle order: printing the first paper “Publick Occurrences”, the Trial of Zenger, consequences of the Stamp Act and the acting of “Sons of Liberty”. The conclusion is made that American press is one of the most influential moments in organizing the national democratic liberation movement over the British Empire, which could not stop or assume control of expansion in the number of printing offices. The article states that the most important factor which leads colonies to unite is the fight against the Stamp Act. It is gone through in attempts to regulate the press and overcome the budget deficit, generated by The Seven Years’ War. As a result American press becomes the main attribute in the American Revolution.

Sudden stop: When did firms anticipate the potential consequences of COVID-19?

Abstract COVID-19 hit firms by surprise. In a high frequency, representative panel of German firms, the business outlook declined and business uncertainty increased only at the time when the spread of the COVID-19 pandemic led to domestic policy changes: The announcement of nation-wide school closures on March 13 was followed by the largest change in business perceptions by far. In contrast, the data provides no evidence for the relevance of other potential sources of information on business perceptions: Firms did not learn from foreign policy measures, even if they relied on inputs from China or Italy. The local, county-level spread of COVID-19 cases affected expectations and uncertainty, albeit to a much lesser extent than the domestic policy changes.

EU’s Norm Diffusion Entrepreneurship: Case Study on EU-Turkey Interactions on Ethnic Rights Policy

Turkey has witnessed the change in domestic ethnic policy in terms of Kurdish issue from negation of a separate Kurdish identity to granting Kurdish ethnic rights during the 1990s. The author argued that policy change in Turkey stemmed from Turkish efforts in pursuing the membership of the European Union (EU) and thus had to meet the Copenhagen Criteria of domestic ethnic rights for an EU membership state. Moreover, EU was also active in using the Copenhagen Criteria to shape Turkish ethnic policy through controlling the process of membership negotiation. Using the theoretical framework of norm diffusion, the article illustrated how Turkey changed its Kurdish ethnic policy through the “top-down process” of EU intervention and the “bottom-up process” of Turkish domestic politics.

Global sustainability agenda and institutional change

The concept of sustainability has become a global agenda penetrating from global institutions to diverse forms of domestic policy making. This dissertation focuses on how, and to what extent, the global sustainability agenda and the actors involved influence domestic policy change. The Indonesian palm oil sector, particularly the Indonesian Sustainable Palm Oil (ISPO) policy, provided the case study for the research. Three independent studies were conducted using multiple data collection strategies with both qualitative and quantitative approaches. The first study examines power relations amongst stakeholders in the Indonesian the palm oil sector supply chain. The second study investigates historical development of the institutions that lead towards a vision of sustainability for governing the Indonesian palm oil sector. The third study, uses discourse analysis to explore the main factors that trigger initiation of the new ISPO policy under the influence of transnational negotiations. The research revealed that international stakeholders have tried to exert influence on the national sustainability agenda in the Indonesian palm oil sector, using power held at the global level. However, institutional change in the Indonesian palm oil sector resulted from power contestation within the government’s national coalitions and occurred as a form of sovereignty. The findings reveal that institutional change was not mainly a response to exogenous influence from global institutions, but resulted from the interplay of endogenous factors that changed the perspectives of national actors. The state, nevertheless, is undergoing a transformation and is enhancing national institutional capacity through the publication of the ISPO policy instead of being ‘hollowed-out’ by the rise of transnational actors operating at the global level. The dissertation presents novel insights on the interaction between globalization and domestic policy making. From a theoretical perspective, new insights contribute to knowledge of the links between institutions, sustainability, globalization and the processes of domestic policy change. From the practical perspective, the research results can help the palm oil sector stakeholders understand power relations between actors; development of institutions contributing to the national sustainability vision; and components of the discourses on the ISPO and oil palm sector that need to be focused to enhance sustainability.

Modeling the potential impacts of climate change and adaptation strategies on groundnut production in India

Groundnut is one of the significant sources of oil, food, and fodder in India. It is grown in marginal arid and semi-arid agro-ecosystems with wide yield fluctuations due to spatial variability of rainfall and soil. Climate change, which is predicted to increase the intra- and inter-annual rainfall variability will further constrain the groundnut economy in India besides the global and domestic economic, social and policy changes. Through this study we aim to examine the biophysical and social economic impacts of climate change on groundnut production and prices to provide a comprehensive analysis of how agriculture and the food system will be affected. Using projected climate data for India, we estimated the biophysical impacts of climate change on groundnut during mid-century using representative concentration pathway (RCP 8.5) scenario. We examined the impacts of changes in population and income besides environmental factors on groundnut productivity. This is to highlight the importance of holistic assessment of biophysical and socioeconomic factors to better understand climate change impacts. Modelled projections show that by 2050, climate change under an optimistic scenario will result in −2.3 to 43.2% change in groundnut yields across various regions in India when climate alone was factored in. But the change in groundnut yields ranged from −0.9% to 16.2% when economic (population and income) and market variables (elasticities, trade, etc.) were also considered. Similarly, under pessimistic climate change scenario, the percent change in groundnut yields would be −33.7 to 3.4 with only the climate factored in and −11.2 to 4.3 with the additional economic and market variables included. This indicates the sensitivity of climate change impacts to differences in socioeconomic factors. This study highlights the need to take into account market effects to gain a holistic understanding of how economic and environmental factors impact agricultural food systems and economies.

Russian-Uzbek Cooperation: Risks and Development Potential

In the context of tough geopolitical and economic competition, the development of Russian-Uzbek economic cooperation is of particular importance in terms of promoting Eurasian integration and forming the economic partnership belt of Russia. The economic potential, the level of diversification of industries and their technological effectiveness, and a balanced strategy of foreign economic cooperation of Uzbekistan contribute to the achievement of these goals to the greatest extent. In this context, the article aims to identify promising areas for the development of economic cooperation based on a comprehensive assessment of the state, risks and potential of economic cooperation. The study uses methods of economic analysis, systematic assessment of the state and prospects of development of various areas of cooperation between countries. The main factor in increasing the intensity of trade and economic cooperation between Russia and Uzbekistan is the new track of political and economic guidelines, changes in domestic economic policy, and the liberalization of currency exchange operations. Internal reforms have become a stimulating platform for activating bilateral agreements on expanding cooperation, which is reflected in the growth of mutual trade turnover, promotion and activation of investment and industrial cooperation projects. The intensification of Russian-Uzbek economic cooperation will help balance the centers of power in regional integration.

Institutional Quality and Shadow Economy: An Investment Potential Evaluation Model

The article summarizes some arguments as regards the scientific challenge on improving approaches to evaluating the country’s investment potential. The main objective of the research is to identify the features and perspectives of applying the variables such as the shadow economy and the integrated institutional quality index into a model evaluating the country’s investment potential. To solve this task, systematization of the related theoretical and methodological materials has been done. The methodological tools of the research are carried out in the following logical sequence: systematization of existing statistical methods for estimating the shadow economy; time data series analysis; and regression analysis. The scope of the shadow economy could be estimated as a dependent variable, with both its determinants and indicators detected and measured. The macro methods, such as Multiple Indicators Multiple Causes (MIMIC) are suitable approaches from an econometric standpoint to evaluate the shadow economy. Institutional quality is crucially an important variable for empirical studies related to evaluating the country’s investment potential. The proposed approach considers significance and direction of the six Worldwide Government Indicators’ (WGI) impact on foreign direct investment net inflow, eliminating the issue of their multicollinearity. However, political instability and high frequency of foreign and domestic policy changes during the last decades distort statistical significance of the results obtained. FDI inflow, as well as the quality of governance, and the shadow economy, is influenced by many other factors, both internal and external, so to build a qualitative model for evaluating the country’s investment potential of the national economy it is necessary to expand the set of factors for analysis. The results of the research can be useful for a more accurate investment potential evaluation on the macroeconomic level, and forecasting foreign direct investment inflows for the following time periods.

The effect of US stress tests on monetary policy spillovers to emerging markets

AbstractThis paper explores the transmission of US monetary policy through US banks to emerging market economies (EMEs) and the role that stress tests play in this transmission. Data on US banks’ monthly commercial and industrial loan originations shows that: (a) US bank lending to EMEs was sensitive to domestic monetary policy changes during the zero‐lower bound period. (b) Effects of monetary easing were heterogeneous across banks and depended on banks’ stress test results, a proxy for their capital strength. Only banks that comfortably passed the stress tests issued more loans to EME borrowers. (c) Effects of monetary tightening were more similar across banks. (d) Banks shifted their lending to safer borrowers within EMEs in response to monetary easing, leaving the risk of their overall loan books unchanged. These results support the hypothesis that bank capital affects the transmission of easier monetary policy, including across borders. We conjecture that bank lending to EMEs during the zero‐lower bound period would have been even higher had the United States not introduced stress tests for their banks.

Проблема выбора приоритетов государственной политики: внутренние и внешние векторы

The purpose of the present study is to determine the priorities and imperatives of state policy, both domestic and foreign, from the standpoints of various methodological approaches. Traditionally researchers used only conservative and liberal approaches, rightly pointing out that the main determinants of the external and internal course of the state are material aspects, such as territory, social and political resources, military and technological power, economic potential. The scientific novelty of the study is as follows: the author suggest that the state policy should be analyzed from the standpoint of constructivism, which provides a more complete explanation of the role of foreign policy in the system of efforts made by the state. Based on examining the phenomena of identity and collective historical memory, constructivism proves that the state policy is determined by the place which the issues of domestic and foreign policy have in the structure of public opinion, as well as by the elite's ideas about national interests, by traditions of messianism or isolationism. Self-identification of the state, premised on the opposition “we” vs. “they”, builds a system of coordinates that serves a criterion for evaluating the current state policy and the level of realization of needs. Depending on how much reality corresponds to the fixed social images, the level of satisfaction with the current state of foreign or domestic policy changes. A high rate of inconsistency encourages a transition to a more active foreign policy, transforming it towards expansion. As a result of the study, it was revealed that the priority of an internal or external vector of the state policy is determined not only by military-economic and other material factors, but also by mental constructs that define nation self-consciousness and the place it fairly takes in the structure of international relations.

CURRENT TRENDS IN RISK MANAGEMENT OF AGRICULTURAL PRODUCTS

Introduction. Agricultural producers regularly face price and production risks. Moreover, the strengthening of global free trade and changes in domestic agricultural policy increase the likelihood of adverse events. As price volatility increases revenue volatility, manufacturers are realizing the importance of risk management as a component of their management strategies. One way to reduce these risks is to use commodity futures and other derivatives. Similar to car insurance, hedging potential costs as a result of a car accident, farmers can use commodity futures markets to hedge the potential costs associated with commodity price volatility. Just as if the profit from a car insurance claim cannot exceed the value of the total amount of insurance premiums, the profit from hedging may not cover the cost of hedging. The purpose of the article is to scientifically substantiate theoretical positions and methodological approaches and to develop alternative risk management strategies through stock exchange instruments, namely, its derivatives – futures and options. Results. The importance of theoretical bases formation of risks that can be faced by domestic producers is substantiated. The ways uncertainties occur, stages of their transformation, are explained. The theoretical approach to risk management through the use of futures contracts is systematized. The historical stages of development of using derivatives have been evaluated. Conclusions. In developed countries, any business activity is unthinkable without risks, so any manufacturer seeks to ensure its risk, including a fixed market. The very time market, on which a particular derivative operates, allows redistributing risks among market participants. The advantage of derivatives is the leverage that allows participants to operate large amounts of risk management funds, including hedging their own products. Keywords: risk, risk management, hedges, options, futures, derivatives.

Forgotten Integration: The Failure and Lessons of the Council of Mutual Economic Assistance

CMEA evolution is considered using the concept of a life cycle. Entry into individual stages of the life cycle depends on the compliance of integration institutions with internal and external development factors of the participating countries, the ratio of integration and national identity. The CMEA analysis allows us to assess the dynamics of modern integration projects important for Russia. The main reasons for the collapse of the CMEA were the overestimation of the role of planned instruments and the underestimation of the role of monetary instruments, collective import substitution (autarky) and technological weakness, primarily the USSR, as a leader in the integration process. To modernize their industry, the CMEA countries, under conditions of detente, increased imports of equipment from Western countries. The country’s budget deficit arising in connection with the growth of external debt was forced to solve by raising prices for consumer goods and services, which caused social discontent. Delays in market reforms exacerbated the situation. The “perestroika” that began in 1985 in the USSR, brought about drastic changes in domestic and foreign policy and gave a “green light” to market transformations in CEE countries. Despite the failure, CMEA made a significant contribution to the development of global regionalization processes. It was part of the bipolar world order and supported strategic stability in the world, contributed to the improvement of European integration institutions, especially in terms of planning the integration process and creating mechanisms for converging the levels of development and welfare of the participating countries. The CMEA experience has shown that in order to meet the growing complexity of the international economic, it is necessary to create the corresponding integration and national institutions of the participating countries. The central issue of the effectiveness of integration is the acquisition by the participating countries of such specialization, not only within the framework of the integration association, but also of the global economy as a whole, which will ensure their sustainable income. In the course of evolution, modern integration associations will change functions and institutions, the composition of participants, enter into larger alliances, but are unlikely to disappear from the world economy as CMEA.