Coalition Of Countries Research Articles

Contagion and interdependencies between BRICS-plus Countries on the Markets of Commodities and Derivative Financial Instruments

Purpose: This study was started on the main macroeconomic data (2010-2019), coming from the countries of the BRICS-plus group. While a significant contribution of these emerging economies to global economic output has generally been observed, this has also been accompanied by persistent domestic imbalance. Design/Methodology/Approach: Regarding the model, we state and contextualize the (long-term) risk co-incidence of the set of macroeconomic variables for this coalition of countries. Particular attention was paid to a valuation, description and forecasting model based on the calculation of the Dynamic Conditional Correlation (DCC) in a Generalized AutoRegressive Conditional Heteroscedasticity (GARCH) process on the time series of credit default swaps (CDS). Findings: The empirical analysis and calculations carried out have verified the significance of the parameters and confirmed the conditional dynamic correlation between the economies of the Brics “expanded”, especially in the presence of shocks, which also involve mutual contagion (temporary increase in DCC) and even interdependence (increasing DCC leads to new, less unstable levels). Implications/Originality/Value: The research offers a look at the most current trends in terms of international economic balances and the entire global system, focusing on commodity markets, financial derivatives and the impacts of trade at the dawn of the new BRICS-plus coalition.

Self-Enforcing International Environmental Agreements and Altruistic Preferences

This paper analyses the effects of altruism on the formation of climate coalitions in the standard two-stage game of self-enforcing international environmental agreements with identical countries. Altruism implies that each country values, to some extent, every other country’s welfare when deciding on its coalition membership and emissions policy. In the Nash [Stackelberg] game, the fringe [coalition] countries exploit the altruism of the coalition [fringe] countries so that altruism decreases [increases] the coalition size. In any case, global emissions and global welfare are close to the non-cooperative values. However, altruism narrows the gap between the individually optimal emissions and the socially optimal emissions, so altruism increases global welfare. The effects of altruism on the formation of climate coalitions crucially depends on its modelling: If altruism affects the membership decision but not the policy decision, or if each coalition country is more altruistic toward other coalition countries than toward fringe countries, altruism can stabilise large coalitions up to the grand coalition. Finally, altruism can stabilise small coalitions but destabilises large coalitions with asymmetric countries.

Political influence on international climate agreements with border carbon adjustment

We study the influence of industrial lobbying on national climate policies and the formation of an international environmental agreement if the coalition countries use border carbon adjustments to protect domestic producers. We find that the effects of this political influence crucially depend on the distribution of carbon tax revenues. If these are transferred to the households, lobbying distorts carbon taxes downwards to reduce the tax burden and does not affect coalition sizes. This leads to higher emissions and lower welfare. By contrast, if tax revenues are given back to the firms, lobbies in the outsider countries favor carbon taxes, whereas lobbies in the coalition countries favor carbon subsidies to raise the international commodity price. This reduces the tax difference and the welfare difference between the countries, which reduces the free-rider incentives. Then, lobbying stabilizes the grand coalition and reduces global emissions compared to a “perfect” world without lobbying if the political influence is sufficiently strong.

On breadth and depth of climate agreements with pledge-and-review bargaining

This paper analyzes the effects of partial cooperation on the breadth and depth of climate agreements in dynamic games in which countries emit, invest in green technology, decide to participate in a climate coalition and participants negotiate the contract duration. When choosing emissions reductions (pledges), coalition countries apply Harstad’s (2023a) pledge-and-review bargaining and partially cooperate. We distinguish between stock-independent and stock-dependent investment costs. It is shown that narrow-but-deep agreements may be welfare superior to broad-but-shallow agreements for signatories. In addition, if the degree of partial cooperation is sufficiently high, broad-and-deep agreements and even first best can be achieved.

On the design of effective sanctions: the case of bans on exports to Russia

Abstract We build on Baqaee and Farhi (2019, 2021) and derive a theoretically grounded criterion that allows targeting bans on exports to a sanctioned country at the level of ∼5,000 six-digit HS products. The criterion implies that the costs to the sanctioned country are highly convex in the market share of the sanctioning parties. Hence, there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia reveals that sanctions imposed by the European Union and the United States in response to Russia’s invasion of Ukraine are not systematically related to our arguments once we condition on Russia’s total imports of a product from participating countries. We discuss drivers of these differences and then provide a quantitative evaluation of the export bans to show that (i) they are very effective with the welfare loss typically ∼100 times larger for Russia than for the sanctioners; (ii) improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 80% with little to no extra cost to the sanctioners; and (iii) there is scope for increasing the cost to Russia further by expanding the set of sanctioned products.

Strictly unofficial business: Australia’s trade policy towards the People’s Republic of China, 1951 to 1966

Between 1951 and 1966, Australia engaged in an expanding trade with China without extending diplomatic recognition. The Liberal–Country Coalition government not only allowed, but encouraged this connection, mostly by facilitating the exchanges of private citizens and even officials and, increasingly, providing export subsidies. It did so selectively, balancing between the eagerness of businesses and some officials, the pressure from the United States, and domestic critiques seeking either a more total containment of China or to pursue diplomacy with Beijing. By the end of the period, Canberra settled on the formula of making a sizable trade surplus with China without taking the political risk of either conducting formal diplomacy or modifying existing trade restrictions. The coincidence of needs saw the trade relationship assuming some significance in Australia’s agricultural sector, especially wheat production. But the political limitation to this trade also became clear, as did the constraints suffered by its Labor critics.

A NEW EURASIAN BLOC? CHARACTERIZING THE ACTIVITY OF FORMER SOVIET AND TURKIC COUNTRIES AT THE UN GENERAL ASSEMBLY

Soviet countries were the most cohesive bloc in the UN General Assembly (UNGA) during the bipolar era, after which the East-West cleavage was replaced by a North-South division. Hence, the Soviet space fell out of the attention of UN research in the post-Cold War era. However, this North-South polarization arises mainly from voting analyses that ignore other interstate activities at the UN. An analysis of sponsorship patterns of draft resolutions from the last decade, in contrast, reveals alternative groups, including a cluster with former Soviet, Eastern European, and Turkish-speaking countries, suggesting some unity among Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Türkiye, Turkmenistan, and Uzbekistan. In light of such evidence, this exploratory paper uses data on UNGA sponsorship between 2009 and 2019 to descriptively characterize this newfound coalition of Eurasian countries, probing what their pattern of UNGA activity is and what topics bind them together as a group.

Features of economic sanctions as a tool to protect the strategic interests of the United States

The widespread use of economic sanctions as an instrument of foreign policy has caused a growing interest in assessing the effectiveness of their use to achieve the strategic goals of the initiator state. The article summarizes the main characteristics of economic sanctions as an instrument of foreign policy. The features of modern U.S. sanctions policy are presented. Special attention is paid to the conduct of anti-Russian sanctions by the coalition of countries led by the United States in 2022 and the assessment of the achievement of the stated goals.

Adaptation of the Russian enterprises activities to sanctions restrictions

Anti-Russian sanctions represent a large-scale range of restrictions imposed by the coalition of countries. They include blocking financial, investment, import, and export operations with Russia. The sanctions have affected almost all economic entities, even those not directly dependent on foreign markets. The purpose of the study is to identify main areas of the sanctions impact on Russian enterprises in combination with a set of adaptation measures to the restrictions imposed. The study is based on the methods of comparative analysis, generalization, and systematization. The article considers difficulties faced by enterprises after the sanctions introduction and ways of building new business relationships with counterparties from “friendly” countries. The results obtained can be useful for enterprises of various activity spheres when solving issues of increasing commodity flows and improving economic results under the current conditions.

Multinational Joint Task Force’s counterinsurgency in the Lake Chad Basin and the consequences of Chadian exit for the Northeast, Nigeria

ABSTRACTThe Multinational Joint Task Force (MNJTF), comprising soldiers from the Lake Chad Basin countries (Cameroon, Chad, Niger, Nigeria, and Benin), has been countering insurgency in the region since 2015. Frictional relationships resulting from mutual distrust affected the commitments of MNJTF contributing countries in counterinsurgency operations in Lake Chad. Chad, notably, considered itself an arrowhead in the counterinsurgency due to the laxity of other coalition countries. The devastation its soldiers suffered and the waxing strength of the operation of Boko Haram and allied groups in the region motivated the late Chadian President Idriss Déby to declare in December 2019 the exiting of his soldiers from the MNJTF to concentrate on protecting the borders of the country. The study relied on extant literature and explorative qualitative techniques to investigate the consequences of such exit on northeast Nigeria. At the very least, it reveals that Chad’s exit betrayed the MNJTF counterinsurgency coalition and has negative consequences for the security complexity in northeast Nigeria.

Charting success for the Plastics Treaty

Charting success for the Plastics Treaty

Should fiscal policies be centralized in a monetary union? A dynamic game approach

In this paper we analyze dynamic interactions in a monetary union with three fiscal players (the governments of the countries concerned) and a common central bank in the presence of exogenous shocks. The model is calibrated for the euro area and includes a fiscally more solid core block denoted as country 1 as well as a fiscally less solid periphery block represented by countries 2 and 3. Introducing two periphery countries allows us to capture different attitudes of the periphery countries towards the goal of sustainable fiscal performance. Moreover, different coalition scenarios are modelled in this study including a fiscal union, a coalition of periphery countries and a coalition of fiscal-stability oriented countries. The exogenous shocks are calibrated in such a way as to describe the last major crises in the euro area, namely the financial crisis, the European sovereign debt crisis, the Covid-19 crisis, and the Ukraine war (energy price) crisis. Using the OPTGAME algorithm we calculate a cooperative Pareto and non-cooperative feedback Nash equilibrium solutions for the modelled scenarios. The fully cooperative solution yields the best results. The different non-cooperative scenarios allow insights into the underlying trade-off between economic growth, price stability and fiscal stability.

Transformation of Russian Oil Sales Markets Taking Into Account Sanctions Pressure

Against the background of the sanctions pressure of the coalition of G7 countries, the European Union and Australia (hereinafter referred to as the coalition) on the Russian energy sector, the introduction of a “ceiling” of prices for the sea transportation of Russian oil, starting from December 5, 2022, it is necessary to transform the traditional flows of oil cargo from Russia to the countries of the Asia-Pacific region. In this regard, in order to identify the potential for the growth of supplies to friendly countries, it is important to assess the existing capacity of pipeline capacities and Russian sea terminals for oil transshipment. In the article, the author analyzes the cargo flows of oil from Russia in the direction of the countries that are part of the coalition, formed proposals for changing the markets for Russian energy resources, taking into account the sanctions pressure, and drew conclusions about the possibilities of diversifying the existing cargo flows of Russian oil. According to the author, Russia could build a dialogue, without violating the sanctions regime, with friendly countries, in order to actually take the share of OPEC countries in the Asia-Pacific market, while OPEC countries will reimburse the supplies of fallen Russian resources to the EU countries at market, not “ceiling” prices.

NORTH KOREA'S NUCLEAR THREAT TO UNITED STATES SECURITY DURING THE LEADERSHIP OF DONALD TRUMP

This paper attempts to look at the North Korean nuclear threat to the security of the United States during the presidency of the United States President Donald Trump by using the Security Dilemma, which is one of the concepts in realism theory that arises as a result of a country's actions to improve its country's security. Still, on the one hand, it creates a reaction. Other countries also want to improve their security, which will lead to a decrease in safety in the first country. In addition, the author also uses Balance of Power which underlies his view that every government or alliance of countries that feel threatened by increasing the military power of a country or a coalition of other countries will respond by increasing the strength of their country as a balancing effort. North Korea is again in the global spotlight for developing its nuclear program. This has created a reaction in the form of a security threat to the United States, so under the leadership of Donald Trump, various efforts have been made to offset this. This paper finds the results that the U.S. security dilemma is based on fear and threats due to the increasing power of North Korea. U.S. President Donald Trump tries to stop this by carrying out a Balance of Power. The forms of activity by Donald Trump include trying to combine diplomatic and sanctions with extreme measures in cutting economic resources, stopping food supplies, and diplomacy of isolation. Using military instruments to force Pyongyang to halt its nuclear weapons development program is also possible.

Designing ‘optimal’ sanctions on Russian imports

AbstractRestricting Russian imports is an important instrument in Allies' sanction toolbox. Rather than arbitrarily choosing the set of targeted imported products and the level of import tariff increases (as is typically done in the literature), we follow the recent contributions on ‘optimal sanction’ strategies. We apply a workhorse computable general equilibrium (CGE) model, GTAP, in a way that enables us to endogenise the scope of sectors targeted, the magnitude of tariff increases and the disbursement of tariff revenues. This allows us to identify sets of Allied import restrictions that best achieve the Allies' objectives of inflicting the highest economic pain on Russia while at the same time keeping self‐harm to Allies as low and as equitably distributed as possible. With regard to scope, we find that, instead of targeting Russian imports across the board, the Allies fare better when limiting their import sanctions to products from the eight most‐imported Russian sectors. Regarding optimal tariff levels, we find that, rather than imposing all‐out import bans, tariff increases in the range of 20–25 percentage points best achieve the Allies' objectives. Finally, the Allied coalition could benefit from a burden‐sharing arrangement in which proceeds generated from the additional tariff rents are redistributed among Allies, and other cash transfers are allowed for. Doing so would result in a more equitable distribution of economic losses among Allied countries—at hardly any additional ‘cost’ to the coalition (in terms of extra losses to Allies or reduced losses to Russia). Such arrangement could significantly strengthen cohesion, resilience, and longevity of the Allied coalition, and thus ought to become a component of an optimal sanction strategy. As an alternative to redistributing tariff rents among coalition countries, Allies could consider using those funds towards supporting Ukraine directly. Doing so would involve a small sacrifice by Allies and would scarcely compromise the effectiveness of Allied sanctions. However, it could greatly help mitigating the human catastrophe unfolding in and around Ukraine.

Optimal Dynamic Control of Proxy War Arms Support

A proxy war between a coalition of countries, BLUE, and a country, RED, is considered. RED wants to increase the size of the RED territory. BLUE wants to involve more regions in trade and other types of cooperation. GREEN is a small and independent nation that wants to become a member of BLUE. RED attacks GREEN and tries to invade. BLUE decides to give optimal arms support to GREEN. This support can help GREEN in the war against RED and simultaneously can reduce the military power of RED, which is valuable to BLUE also outside this proxy war, since RED may confront BLUE also in other regions. The optimal control problem of dynamic arms support, from the BLUE perspective, is defined in general form. From the BLUE perspective, there is an optimal position of the front. This position is a function of the weights in the objective function and all other parameters. Optimal control theory is used to determine the optimal dynamic BLUE strategy, conditional on a RED strategy, which is observed by BLUE military intelligence. The optimal arms support strategy for BLUE is to initially send a large volume of arms support to GREEN, to rapidly move the front to the optimal position. Then, the support should be almost constant during most of the war, keeping the war front location stationary. In the final part of the conflict, when RED will have almost no military resources left and tries to retire from the GREEN territory, BLUE should strongly increase the arms support and make sure that GREEN rapidly can regain the complete territory and end the war.

The Strategic Rivalry between Saudi Arabia and Iran in the Yemeni Conflict: Towards an Ending?

The conflict in Yemen, ongoing since 2015, between the Houthi movement and the internationally recognized central government, presents an international dimension, as part of the military campaign carried out by a coalition of Sunni countries led by Saudi Arabia, in support of the President Abd Mansur al-Hadi in fighting houthi forces; and the tactical and military assistance given to the Houthis by Iran. In that way, a proxy war was established by the two major powers of the Middle East region, in the context of a geopolitical rivalry, characterized by a fierce competition for the status of regional hegemonic power. However, Riyadh´s offer of a ceasefire in Yemen, and the diplomatic overtures granted to Saudi Arabia by the new Iranian President, Ebrahim Raisi, have represented a reversal of the status quo. Keywords: Yemen; Conflict; Saudi Arabia; Iran

Exacerbation of trade and economic relations between the United States and China at the present stage

The coming to power in the United States of the democratic administration of D. Biden did not lead to a change in the strategic course of the United States in relation to the PRC, which is considered as the only and main geopolitical competitor of the United States in world politics and economics. On the contrary, a number of measures have been taken in the framework of protecting the interests of US national security to significantly tighten bilateral relations, destructively link trade and economic cooperation between the two countries with the political issue of observing human rights in China and direct interference in the internal affairs of the PRC in official Washington's approach to the issue of Taiwan. The policy of active opposition to the development of China's economic potential by the Biden administration is carried out mainly due to the desire to restrain the development of advanced technologies and breakthrough innovations in China by introducing all kinds of prohibitions and restrictions in the field of technology transfer. Unlike the Republican administration of D. Trump, which focused on “trade wars” with China, President D. Biden is consistently implementing the task of counteracting Kiai through the joint efforts of the coalition of US-friendly countries, NATO and EU states being formed by the democratic administration. At the same time, the goal is also to hinder or limit as much as possible the possibilities of economic cooperation between these countries and China in the interests of maintaining the leading position of the United States in world politics and the global economy, especially in the world markets for advanced technologies. In a number of cases, the US policy of providing unilateral advantages in geopolitical competition in the modern world to a large extent contradicts the strategic national interests of the economies of the countries involved by Washington in countering China.

Финансово-бюджетная политика как инструмент реализации страте-гических приоритетов США

The relevance of the article is due to the transitional period of the development of the world community in modern conditions, when Western states are mak-ing all possible, often illegitimate attempts to maintain their dominance in the world. The instrument for implementing the strategic plans of Western coun-tries in the long term is mainly the US federal budget as a means of implement-ing strategic priorities, regardless of which party wins the US presidential elec-tion. The subject of the article is the system of financial and economic relations in the United States, aimed at implementing the strategic priorities of U.S. economic policy for a long time. In modern conditions, this is the reindustrialization of the national economy along with the fulfillment of tasks to ensure social sup-port and protection of the population, as well as to maintain dominance in the world community, and at any cost, including by rewriting the so-called no-where approved rules of the world order and the formation of coalitions of countries that share the political views of American politicians and economists who advocate planting a "moral" economy in the world and promoting its val-ues. The article analyzes the strategic economic priorities of D. Trump's policy and the last budget message of President J. Biden in 2023, identifies elements of continuity and reflects the specifics of the reindustrialization of America. Con-clusions are drawn about the continued growth of the US federal budget deficit, indicating the continuation of the implementation of the "life on loan" model in the economy, which is based on the dollar performing the functions of the world currency, a means of settlement and accumulation.

ENERGY POLICIES OF POLAND AND THE EU: A SEARCH FOR CONVERGING INTERESTS

The strong dependence of Poland’s energy system on coal, as well as the relatively prominent role of the coal mining industry in the country’s economy, are features that distinguish the Polish economy from other EU states. Over the past decade and a half, EU countries have put forward increasingly stringent requirements for limiting greenhouse gas emissions in order to combat global climate change. Against this background, the Polish authorities tried to determine their own line within the Union. Using the example of Poland, we can see exactly how a country that differs sharply from other EU members in a number of important parameters is looking for opportunities to defend its interests, how Brussels and other member countries react to this. In addition, Warsaw is the object of their criticism not only for opposing climate plans, but also for violating the rule of law. The EU is inclined to link these subjects together, which may indicate the universalization of its approach to the existing contradictions. Nevertheless, Poland is able to effectively resist certain requirements of the EU energy policy, forming coalitions of countries concerned about its social consequences.