Distributional Conflicts Research Articles

The Political Economy of Exchange Rates and Export-Led Industrialization in South Korea*

ABSTRACT South Korea’s economic trajectory has been one of the most successful stories of post-war catch-up industrialization. The Korean developmental state has used various tools, including the exchange rate, to become an export powerhouse in the twenty-first century. However, the export-led growth strategy has had a distributive conflict with Korea’s working class. Based on post-Keynesian and structuralist economics, this paper assesses the political economy of exchange rate depreciation and export-led industrialization in South Korea. I show that exports as a share of GDP have constantly risen to become the most important growth engine in the Korean economy. This long-term trend, however, has coincided with a decline in the labor income share in South Korea. I formulate the structuralist macroeconomic model to explain dynamics of real wages, real exchange rates, exports, and output. I finally use a vector autoregression (VAR) analysis to show that exchange rate depreciations during modern South Korea (1989Q1–2023Q1) are inflationary and contractionary in the short run. Currency depreciations have ambiguous effects on exports, but they clearly reduce output gaps. On the other hand, an increase in nominal wages is expansionary or varies positively with output gaps.

Industrial democracy between neocapitalism and postfordism. The political and intellectual trajectory of Bruno Trentin (1926-2007)

During his long political trajectory Bruno Trentin (1926-2007) never ceased to question the relationship between work and democracy. The Italian intellectual and trade union leader denounced the domination of the «productivist ideology» of scientific management over the entire social and political Left. According to this ideology, trade union action was reduced to the animation of distributive conflict, while the political struggle was played out outside the economic sphere, through the conquest of the state. Contrary to this vision, the 1960s were the source of a new self-management political culture, born of the encounter between the Marxist, Christian and libertarian traditions of the labour movement, which aimed to make workers and their unions «political subjects» in their own right by gaining real decision-making power over the organisation of work. The decline of Fordism offers an opportunity for a new "contract" in which work can achieve its political recognition and autonomy within the workplace and not from outside. It is from this history that Trentin draws to defend the actuality of a project of liberation from subordinate «work». In this article I reinscribe Trentin's reflections in the long history of his career as an intellectual, trade unionist and political activist, as well as in the controversies and the impasses that have shaped his life and the history whole Italian and European labour movement during the twentieth century.

Whose negative emissions? Exploring emergent perspectives on CDR from the EU's hard to abate and fossil industries

Net zero targets have rapidly become the guiding principle of climate policy, implying the use of carbon dioxide removal (CDR) to compensate for residual emissions. At the same time, the extent of (future) residual emissions and their distribution between economic sectors and activities has so far received little attention from a social science perspective. This constitutes a research gap as the distribution of residual emissions and corresponding amounts of required CDR is likely to become highly contested in the political economy of low-carbon transformation. Here, we investigate what function CDR performs from the perspective of sectors considered to account for a large proportion of future residual emissions (cement, steel, chemicals, and aviation) as well as the oil and gas industry in the EU. We also explore whether they claim residual emissions to be compensated for outside of the sector, whether they quantify these claims and how they justify them. Relying on interpretative and qualitative analysis, we use decarbonization or net zero roadmaps published by the major sector-level European trade associations as well as their statements and public consultation submissions in reaction to policy initiatives by the EU to mobilize CDR. Our findings indicate that while CDR technologies perform an important abstract function for reaching net zero in the roadmaps, the extent of residual emissions and responsibilities for delivering corresponding levels of negative emissions remain largely unspecified. This risks eliding pending distributional conflicts over residual emissions which may intersect with conflicts over diverging technological transition pathways advocated by the associations.

Cohesive Institutions and Political Violence

Abstract Can revenue sharing of resource rents be a source of distributive conflict? Can cohesive institutions avoid such conflicts? We exploit exogenous variation in local government revenues and new data on local democratic institutions in Nigeria to study these questions. We find a strong link between rents and conflict. Conflicts are highly organized and concentrated in districts and time periods with unelected local governments. Once local governments are elected these relationships are much weaker. We argue that elections produce more cohesive institutions that help limit distributional conflict between groups. Throughout, we confirm these findings using individual level survey data.

What is the Problem with Investment Disputes? The Case of the Draft Legislative Guide on Investment Dispute Prevention and Mitigation

Embedded in any policy proposal is a set of assumptions about the problem that the policy is intended to solve.1 As policy processes play out, some of these assumptions are contested by the actors involved, while others remain latent. Policy discussion about institutionalizing investment dispute prevention reflects a set of assumptions concerning the problem of investment disputes. In this contribution, I examine assumptions embedded in the development of, and the response to, the United Nations Commission on International Trade Law (UNCITRAL) Secretariat's 2023 Draft Legislative Guide on Investment Dispute Prevention and Mitigation. The Draft Legislative Guide represents the high-water mark of efforts to develop a model of investment dispute prevention that could be rolled out at the domestic level. I make three main arguments. First, both the Draft Legislative Guide itself and wider policy discussion assume that investment disputes develop independently of the cognitive and institutional environment in which they occur. As a result, policy discussion overlooks the extent to which dispute prevention initiatives can, counter-intuitively, produce investment disputes. Second, policy discussion of investment dispute prevention assumes that investment disputes have their roots in coordination failures across government, rather than democratic processes, distributive conflicts, or tensions between the interests of investors and wider public interests. This premise, and its implications, deserve much closer critical scrutiny. Third, institutionalized models of investment dispute prevention of the sort envisaged by Draft Legislative Guide are almost exclusively found in developing states. The dispute prevention agenda needs to grapple openly with the fact that advice is being given to developing states to establish dispute prevention institutions that have no equivalents in the domestic systems of developed states.

Indigenous and traditional communities’ ways of knowing and being in planetary justice

ABSTRACT This article contributes to the recent discussion on planetary justice by analyzing two environmental justice struggles around mining projects that impact indigenous peoples and traditional communities in Brazil and South Africa. Though locally based, these ecological distribution conflicts are connected to global chains, impacting the whole planet. We focus on peoples’ demands and to what extent their ways of knowing and being were considered in public consultation and litigation. Moreover, we reflect on what we can learn from these struggles. Our argument goes beyond distributive or procedural justice claims as these peoples are resisting the ontological erasure of their worlds, demanding to be consulted and participate in their own terms. These cases teach us that a deeper understanding of planetary justice entails diverse considerations of time, space, and the relations between human and non-humans. Assessing these struggles offer concrete ways to reimagine just relations, for many worlds in one planet.

Rentiers and distributive conflict in Brazil (2000–2019)

Abstract The paper examines the determinants of rentier income in contemporary financialised capitalist economies by analysing the case of Brazil. It argues that different drivers of rentier income may have comparable potential to channel a substantial share of aggregate income to asset owners. The paper estimates an expanded functional income distribution for Brazil for the period between 2000 and 2019, which distinguishes between rentier income, wages, profits of enterprise and government income. In the last two decades, the share of rentier income in Brazilian GDP has fluctuated around an approximately stable trend even though its composition has changed profoundly. The estimation presented allows for an analysis of the role played by financial expropriation (i.e. interest payments out of wage income) in this expanded functional income distribution, which points to alternative results concerning the recent trajectory of the wage share of income and of the distributive conflict.

From guano to green hydrogen: food security and fertilizer disputes in international energy law

Abstract Russia’s invasion of Ukraine triggered energy and food crises, driven by demand for natural gas as fuel and fertilizer feedstock. By adopting a recent framework for analysing the diverse ways in which international law regulates energy transactions, I extend the category of end-use energy products to include food for human consumption, given the economic importance of dietary energy and the entangled agendas of energy and food security. To highlight the intermediate roles played by international law in securing resources for conversion into dietary energy, I show how rules allocating entitlements over fossil fuels were inherited from an earlier generation of international disputes over fertilizer resources, including the taxation of nitrate exports, alien entitlements to guano discoveries, and the well-known confiscation of a factory at Chorzów. Many of these disputes between States and commercial actors prefigured the reliance of the modern energy industry on investment arbitration and retain currency in case law. Yet, the fertilizer trade also informed the development of offshore resource entitlements, the local regulation of global externalities, and the belated recognition of the rights of peoples over natural resources. Despite this normative evolution, dispute settlement in the energy sector is still driven by States and commercial actors, although the underlying transactions may have profound implications for food security. By reframing food as energy and integrating fertilizer disputes into a long history of international energy law, the anticipated transition from fossil fuels towards green hydrogen as a dual-use fuel and fertilizer feedstock may generate familiar sites of distributive conflict over resources for the production of dietary energy, calling for closer attention to whether food security may be enhanced by the entitlements of collective subjects (food sovereignty), individuals (right to food), corporations (investment protection), and States (economic regulation).

Land/Labor Ratios, Citizenship, and Migrants: Exploring the Hidden Links in the Political Economy of Immigration Regimes

Within sovereign states citizenship is arguably the most important political marker of in- and outsiders. As a result, questions about who gets to reap the benefits of citizenship often result in distributional conflict. This conflict becomes inflamed when a country goes through a period of significant inward migration. Given that citizenship is so important and so contentious, from where do the rules governing its acquisition come? Our starting point is the acknowledgment that migrants are mobile labor. From this perspective, countries in which elites benefit from an increased supply of productive labor—that is, those with high land/labor ratios—will be more likely to adopt policies that attract migrants, such as easier naturalization rules, including birthright citizenship. We illustrate the plausibility of our argument with some statistical evidence and suggest some avenues to further explore this crucial question.

Tri‐layer low‐carbon distributed optimization of integrated energy systems based on hybrid games under stochastic scenarios

AbstractThe low‐carbon development of integrated energy systems is achieved via the sharing of multiple energy interactions by park‐level IES (PIES).However, coordinating profit distribution conflicts among complex interactive stakeholders in stochastic scenarios is challenging. Accordingly, this study proposes a novel tri‐layer framework that aggregates different game mechanisms to investigate the interactions between PIESs and coupled energy markets. First, a linkage trading mechanism is proposed by integrating carbon emissions trading and green certificate trading, which establishes a coupled electricity‐carbon‐green certificate market. Consequently, a park aggregation operator acts as an intermediary between PIESs and the coupled market, setting upper‐level purchase and sale prices to guide unit generation in each PIES using the Stackelberg game theory. Subsequently, the Nash game theory is applied to realize cooperative bargaining among PIESs for a fair revenue distribution. Further, the impact of uncertain environments is considered by utilizing stochastic scenario methods and the conditional value‐at‐risk theory. To protect the privacy of each participating agent while improving the convergence speed, a differential evolutionary method is combined with analysis target cascading to solve the framework. Finally, the proposed scheduling method is validated by utilizing a typical case to optimize conflicting PIES interests in multiple scenarios and realize decarbonisation.

Left in the dark: Colonial racial capitalism and solar energy transitions in India

India is globally renowned as a burgeoning solar energy superpower. Solar park development is occurring in the Indian context of an ascendant Hindu nationalism (Hindutva) that is violent and oppressive to minority populations, particularly against Muslims and Dalits. Yet it remains unclear how Hindutva influences solar-related land politics and resource access. Utilizing original data from extensive mixed methods fieldwork to examine the case studies of the Bhadla Solar Park and the Fatehgarh Solar Park in Rajasthan, we document a clear pattern of dispossessionary forces driving solar development, compounding the harms of climate coloniality. Drawing on literature from political ecology and racial capitalism, we ask the following research questions: 1) How do distribution conflicts arising from uneven solar development vary between projects?; 2) To what extent does solar park development perpetuate colonial production relations and the racialized dispossession of local populations? Solar park development in Rajasthan has not translated into the upliftment or empowerment of marginalized peasants struggling with energy poverty. On the contrary, solar coloniality is perpetuating and compounding the harms of climate coloniality, mitigating carbon emissions through the landed extraction of photons and the erasure of racialized peasants. Hindutva influences solar development in ways that reproduce marginality and vulnerability of racialized groups burdened by the dispossession of land and resources for solar park development for the benefit of domestic and international firms. Emancipatory and redistributive solar interventions are vital for ensuring the survival of those left in the dark within sustainable sacrifice zones by dispossessionary and destructive energy transitions.

Energy price shocks, conflict inflation, and income distribution in a three-sector model

The paper presents a model of conflict inflation to investigate the distributional effects of energy price shocks. We argue that periods of high inflation are always periods of significant redistribution of income. We analyse how such redistribution occurs along two dimensions: between workers and firms and between sectors of the economy. To study the distributional outcomes of the recent inflationary episode, we build a three-sector model comprising a domestic energy sector which provides inputs for a goods and a services sector. The model is calibrated to US sectoral data with the Method of Simulated Moments. While energy prices are set internationally, non-energy prices and nominal wages are set by firms and workers, giving rise to conflicting claims over the distribution of income. We consider three shocks that trigger inflationary distributional conflict: an energy price shock combined with demand and supply shocks to the goods sector. We find that the recent inflationary episode constitutes a price-wage rather than a wage-price spiral. The combined shocks induce non-energy firms to raise prices, which undermines real wages, and redistributes income towards firms. The sectoral demand shift towards goods in combination with pandemic-related supply bottlenecks further raises mark-ups, accelerating inflation and leading to divergence in sectoral profit margins. We compare three anti-inflationary policies: redistributing windfall profits to workers, nominal wage restraint, and aggregate demand contraction through monetary or fiscal policy. The redistribution of profits via a windfall tax is most effective in reducing inflation without reinforcing reductions in employment and labour shares.

Who’s afraid of more ambitious climate policy? How distributional implications shape policy support and compensatory preferences

ABSTRACT Nation states need to strengthen domestic climate policies to address global climate change. As more ambitious climate policy shapes the material interests of different societal groups, distributional conflict about who wins and loses will likely intensify over the coming years. I use the recent complete revision of the Swiss CO2 law as an example of a change towards more ambitious climate policy and experimentally test whether distributional implications resulting from this policy change affect both people’s policy support and redistributive preferences. I establish that learning about negative impacts on some societal groups significantly decreases support, while information about groups profiting also increases support. Moreover, being informed about the negative consequences of ambitious climate policy makes people more likely to support redistributive schemes, even if they are not personally affected. These results show the centrality of distributional implications for the political feasibility of progressive climate policy.

Valuation struggles in the Ecuadorian Amazon: Beyond indigenous people's responses to oil extraction

Conflicts resulting from oil extractivism can be seen as ecological and cultural distribution conflicts, and have involved Latin American indigenous movements attached to their land and environments as providers of livelihood and cultural identity. In Ecuador, some have argued that this has become a 'standard narrative', essentializing the struggles of indigenous people. And the various agreements found historically between indigenous people and large companies operating in their territories seem to legitimize such criticism. But how to understand the choices of indigenous groups, with incommensurable needs, values, and claims, in the presence of extractive projects involving incommensurable local outcomes? Through an analysis of the different claims of indigenous people who voted in favor of oil extraction projects in their territories in the ITT fields of the Ecuadorian Amazon, I show how oil extraction coupled with 'social compensation' might create non-conflictive, but problematic situations, rather than conflicts. Indeed, the perception of an incommensurable loss, related to ecological and cultural difference, does not necessarily translate into opposition to mining or drilling. This is especially important in countries where the right to prior consultation could legitimize the expansion of oil activities in indigenous territories.

Kein Wachstum ist auch keine Lösung: Eine Kritik an Degrowth- und Postwachstumsansätzen

Abstract In the face of climate change and other ecological problems, the degrowth and post-growth approaches are gaining more and more supporters. However, these growth-critical approaches have many problems. While the critique of growth is justified in many areas, the contraction or stagnation of production is associated with negative social and political consequences, as it would most likely lead to massive distributional conflicts. Moreover, a shrinking or stagnating GDP could make the necessary decarbonisation of the economy more difficult, because the investment required for decarbonisation would be much harder to implement in such an economy than in a growing economy.

A NORTH-SOUTH ECONOMIC GROWTH MODEL: THE ROLE OF INCOME DISTRIBUTION

The main objective of this article is to present in a balance of payment constrained growth (BPCG) model the role of income distribution and technological progress in the growth pattern of a developing economy. For this purpose, an index of the quality of exports and the existence of distributive conflict in the labor market are taken into consideration. The technological progress of the South depends on income distribution and the technological gap. Based on this framework, four types of growth patterns —such as those explained in Fajnzylberg (2000)— are possible: 1) dynamic and disarticulated, 2) integrated and stagnant, 3) disarticulated and stagnant, and 4) dynamic with social equity. Several equilibrium possibilities (including multiple equilibria) were discussed. Furthermore, the South catching up conditions were highlighted.

THE BRAZILIAN DISTRIBUTIVE CONFLICT IN THE EARLY 21ST CENTURY AND THE ROLE OF THE FOREIGN SECTOR

The first two decades of the 21st century in Brazil were characterized by an increase in the wage share, which was largely associated with the higher workers’ bargaining power that resulted from institutional changes and lower unemployment. We show that the foreign sector also played a key role in this process and explore how its effects on the domestic income distribution changed over the years. We highlight the importance of the industry and, in particular, the manufacturing sector to the higher wage share. At the beginning of the period the depreciated domestic currency did not compromise the profit share due to the low bargaining power of workers, while during the years of appreciated domestic currency the distributive conflict was attenuated. Yet, the currency depreciation after 2011 occurred in an economic structure more dependent on imports and with high workers’ bargaining power, thus pressuring downwards profit margins.

The EJAtlas and the Making of the World Movement for Environmental Justice. A “Sociology of Absences”?

The EJAtlas is an archive of environmental conflicts. It is a collective endeavor. Both academics and activists contribute to it. It will reach 4,000 entries by 2023 allowing much new research on comparative political ecology and making visible the global countermovement for environmental justice. Growth in social metabolism (flows of energy and materials) and the abundance of environmental conflicts are seen as two sides of the same coin. Revealing the enormous circularity gap or “entropy hole” at the center of the industrial economy, the EJAtlas explores the geographies of resistance and the social protagonists of “ecological distribution conflicts” across the world. Environmental defenders display diverse valuation languages. Although the local complaints depend on local social and political cultures, there are common patterns of felt grievances and environmental activism at the frontiers of commodity extraction and waste disposal.

Backsliding by surprise: the rise of Chavismo

AbstractHow do elected autocrats come to power? Prominent explanations point to distributive conflict. We propose instead that some candidates advertise democratic deconsolidation as “deepening democracy,” which can have cross-cutting appeal. We evaluate this proposal through the election of Venezuela's Hugo Chávez, an emblematic elected autocrat. Using original data, we find that historical voting patterns and political rhetoric are consistent with our proposal: Chávez came to power with the cross-class support of voters from across the traditional political spectrum, and his campaign emphasized rather than obscured his plan to remake political institutions.

The primacy of the European Central Bank: Distributional conflicts between theory and practice in the pursuit of price stability

Whether fighting inflation or deflation, it has been a decade since the European Central Bank (ECB) managed to successfully attain its Treaty-mandated objective, that is, price stability. This is defined by the Bank itself as maintaining an inflation target of ‘below but close to 2% over the medium term’ and, since 2021, as ‘2% over the medium term’. The further reality has veered from policy, the more attention has been brought to the redistributive choices, both implicit and explicit, in the ECB’s pursuit of price stability. The current article analyses this debate in the context of the legal terms stipulated in the Treaty on the Functioning of the European Union, conceptualised as a function of monetarist theory. It claims that the ECB’s failure to deliver on its price stability objective has contributed to intensifying the re-politicisation of monetary policy, cast doubt on the presumed legitimacy of foundational monetarist theory and caused a legal struggle within EU constitutionalism to sustain a stable distinction between economic and monetary policy.