Policy Instruments Research Articles

Anticipatory climate policy mix pathways: a framework for ex-ante construction and assessment applied to the road transport sector

ABSTRACT Globally, climate policy implementation is failing to deliver on the ambitions outlined in the Paris Agreement and countries’ Nationally Determined Contributions. We argue that a more strategic and anticipatory approach to policy mix design and implementation can help contribute to realizing these ambitions. Policy mixes need to co-evolve as energy transitions progress, in order to effectively target multiple transition challenges as these change over time. Accordingly, policy assessments need to both consider interactions between instruments and adopt a dynamic perspective, in terms of design logics and evaluative criteria. We highlight the need for a construction and assessment methodology for designing policy mix pathways which explicitly considers durability risks which could weaken support and lead to dismantling, and anticipatory design principles which can help mitigate these risks. Our paper addresses this gap by proposing and illustrating a novel framework for policy instrument mix pathway construction and ex-ante assessment. We identify generalizable durability challenges for effective anticipatory design: dynamic cost effectiveness, the distributive impacts and acceptance of pathways, along with fiscal and governance requirements for effective implementation. We demonstrate the value of the approach by application to the German light-duty vehicle sector transition. We construct and comparatively assess three illustrative pathways promising to deliver the German LDV sector 2030 GHG targets. The pathways differ in logic, and which of three main market dynamics driving a diffusion-stage transition they emphasize: battery electric vehicle (BEV) purchase, vehicle stock usage, and internal combustion engine (ICE) vehicle scrappage. Accordingly, the pathways utilize different instrument combinations, design features and calibrations. We also assess the illustrative pathways and discuss trade-offs. We argue that this approach can help improve climate policy planning and implementation processes, and increase the likelihood attaining ambitious mitigation targets.

Governmental strategies for municipal amalgamations: evidence from 24 European countries

ABSTRACT For several decades, European governments have pursued amalgamations of local governments, mainly to improve municipal service provision, efficiency and governing capacities. Some reforms resulted in comprehensive territorial restructuring; others had little impact. This study investigates the strategies and policy tools European governments implemented to achieve municipal amalgamations. I propose a new three-fold typology of reform strategies and analyse the policy instruments used in each strategy throughout the reform periods, using comparative evidence on 29 amalgamation reforms implemented by central and regional European governments since 2000. I assess the outcomes of each strategy and discuss the findings’ implications for multi-level reform governance.

Better data for budgetary surveillance: EU law on statistics as key to unlocking the potential of public sector accounting

The quality of the data available for monitoring budgetary discipline of the Member States has been a hot topic within the European Union (EU) institutions and in the literature ever since the beginning of the economic crisis in 2008. The COVID-19 pandemic has shown the inadequacy, not only of the data, but also of the policy instruments available for coordinating efforts and decision-making. In this paper, we attempt to unlock the potential of public sector accounting (PSA) for contributing to the improvement of EU surveillance mechanisms. We look beyond the idea of standardised accounting rules for the entire EU public sector (European Public Sector Accounting Standards) into a less controversial area of EU competence, and we explore the conditions for introducing reporting obligations based on PSA data as part of EU law on statistics. Points for practitioners The current succession of crises might create momentum for a change in EU fiscal policy-making. New instruments for the monitoring of the budgetary situation in the Member States could become necessary. The EU institutions cannot impose the European Public Sector Accounting Standards. However, a new standardised reporting instrument could become binding EU law if it would come in the shape of a statistical methodology. Basic principles of EU law guarantee that any new statistical reporting obligations are limited to what is necessary, proportionate and cost-effective.

Regulatory Effects of the Combinations of Aggregate and Structural Monetary Policy Instruments: an application of New Keynesian DSGE model to China

This paper selects Chinese macroeconomic data from the first quarter of 2009 to the first quarter of 2020 and employs a New Keynesian dynamic stochastic general equilibrium model that incorporates the financial accelerator mechanism, price stickiness, and invisible government guarantees. The regulatory effects of different combinations of monetary policy instruments are compared from five perspectives: the shock effect of monetary policy, the magnitude of economic volatility of non-monetary policy shocks, the Central Bank loss function, the gap in the distribution of household income, and the heterogeneous firm external financing premium. Our findings indicate that the regulatory effects of the aggregate price-based and structural quantity-based monetary policy instrument combination are optimal, a conclusion that is further supported by the robustness test. It is therefore recommended that the Central Bank consider the potential benefits of a combined approach to aggregate and structural monetary policy instruments, with a view to enhancing credit availability for the real economy. This paper represents a significant contribution to the field, as it is the first to explicitly propose four distinct monetary policy instrument combinations, thereby overcoming the limitations of previous studies that have focused on a single instrument or a narrow range of instruments. The paper also contributes to the theoretical understanding of monetary policy instruments.

Linking Tourist Willingness to Pay and Beach Management: A Travel Cost Analysis for Balandra Marine Park, Mexico

Balandra, one of the most popular beaches in La Paz, Baja California Sur, was declared a flora and fauna protection area in 2012, and in 2019, the Mexican government chose it as the best beach in Mexico during the Tianguis Turistico celebrated on that year. Because of this latter distinction, this beach currently faces overcrowding. Formulating effective management policies depends, to a certain extent, on the knowledge of their recreational value and visitor characteristics. Recreational value allows us to know the benefits of the tradeoffs among the ecosystem services and society and exhibit the value of possible damages to marine ecosystems, like the one caused in 2022 by the fire of a tourist boat inside Balandra. Using the individual travel cost method and applying 159 questionnaires to site visitors, the individual willingness to pay to access Balandra Beach was estimated, resulting in USD 11.11/day/visitor. Recreational economic value (REV) for Balandra was estimated using two essential criteria: first, the total visitors registered in 2021, and second, the daily maximum carrying capacity. Welfare recreational loss was also calculated, derived from the site’s two-month closure, using REV as a proxy. Finally, beach management options and possible environmental and economic policy instruments that could be implemented are discussed.

Vulnerability and Critical Human Security in the Era of COVID-19 and Beyond in the UK and South Korea

The COVID-19 pandemic destabilised the political, social, and economic life of countries as it spread around the world. It posed multiple threats to individuals, societies, and across different domains of life, highlighting their intersectionality and uneven impacts. The paper focuses on the UK and South Korea, countries which took very different paths in framing and addressing the crisis. It draws on secondary data and an integrated critical human security and state capacity approach to compare how state responses, institutional capacity, and the mobilisation of policy instruments themselves construct constellations of insecurity which intersect with human security and vulnerability. It will demonstrate the structural constraints that have continued to shape vulnerability and the dynamics of human security and insecurity in turbulent times.

Crafting Combinations to Govern Groundwater: Knowledge, Motivation, and Agency

Groundwater is a vital common pool resource for water supply, irrigation, and ecosystems, but can be difficult to govern due to invisibility, conflicting interests, and limitations of available institutions. While there are many policy and technical instruments (tools) available, efforts to apply them are often ineffective. This special issue of the International Journal of the Commons presents a set of papers with insights into policy instruments and other methods for groundwater governance. The relevance and effectiveness of tools and combinations of tools (toolboxes) in addressing problems that emerge from groundwater use is related to how they fit with diverse physical and social contexts. Drawing on research and applied experience, including that presented in this issue, we outline a conceptual framework for groundwater governance that emphasizes attention not just to knowledge, but also to motivations, and to agency for effective coordination among key actors. Articles in the special issue analyze groundwater governance in areas of Africa (east, south, and north), Central Asia, India, and the United States. The articles cover a range of scales from small groups playing experiential games to international agreements about transboundary aquifers. Several papers illustrate the crucial role of knowledge about groundwater, and the need for governance instruments and interventions to go beyond only changing knowledge. Three papers focus on groundwater games and their use to understand and change behavior, especially when combined with other tools that facilitate collective deliberation and action. Several papers illustrate how understanding of the ways people care about and practice care for groundwater illuminates examples and capabilities for groundwater governance. Highlights There are many institutional tools for governing groundwater, but no panaceas, and successes are rare Effective groundwater governance requires that key stakeholders have combinations of knowledge, motivation, and agency to act together effectively Groundwater co-management can combine stakeholders’ knowledge, values, and collective action with external science, resources, and authority Participatory processes can craft combinations of tools to fit contexts and pursue shared gains

Political Economy of Agriculture and Food Policy in Africa

This article reviews the literature on the political economy of agricultural and food policy in sub-Saharan Africa. In doing so, it first presents a conceptual framework highlighting that agricultural and food policy decisions are contingent on the intersection between governance structures, the preferences and pressures from societal interest groups, and international dynamics. The interrelations among these three factors are then examined across several different sets of policy instruments that have been the focus of traditional political economy research in the region: trade, tax, and marketing policies; public investments and regulations; input and food subsidies; and cross-cutting policies for value chain development. Recognizing several broader demographic, technology, and governance transitions in the region, the article also highlights key areas for future analysis that examine the role of cities in food policy, the possibilities presented by expanded mobile phone and Internet access, and the efficacy of new public administration modalities for policy implementation.

Renewable Energy in Sub-Saharan Africa: A Prescriptive Analysis of Ghana

This study assesses the state of play of renewable energy in Sub-Saharan Africa through the lens of the Ghana renewable energy sub-sector. Adopting a sector diagnostic approach, the study assesses the legal framework, institutional arrangements, emerging developments, and challenges of renewable energy development in Ghana. The study further prescribes key renewable policy instruments necessary to propel Ghana to achieve its 10% renewable energy target by 2030. Recommended amendments for the Renewable Energy Act are also proffered in this paper. The study provides innovative directions for policymakers and regulators while revealing new perspectives to the renewable energy puzzle in Africa.

Decarbonising primary industries with geothermal heat – a pathway to greater direct use

ABSTRACT This paper discusses the opportunities and policy levers to increase the use of low-temperature geothermal resources in New Zealand for decarbonising primary industries, in particular, covered crops. Geothermal heat (geoheat) is a local, reliable, resilient and sustainable energy source. Low-temperature geothermal energy (220°C) is available in the Taupō Volcanic Zone with low awareness of the nationwide availability of lower temperature resources. Covered crop growers in New Zealand, needing to decarbonise their operations, are investigating the potential of utilising geoheat, following the example of the Netherlands. The Netherlands has strategically invested in low-temperature geothermal energy, utilising 80 °C water resources, from ∼ 2 to 3 km below the surface to heat greenhouses. Internationally, risk mitigation schemes and insurance programmes have proven pivotal policy instruments for fostering geothermal adoption. This paper discusses the opportunities that the adoption of using low-temperature geothermal provides to New Zealand drawing upon successful models from other countries.

Can government-guided funds promote corporate technology innovation? Evidence from the new energy automobile industry

A government-guided fund is a crucial policy instrument for fostering innovation in the new energy automotive industry. This article examines the stimulating impact and underlying mechanisms of government-guided funding on A-share new energy automotive listed firms from 2012 to 2022, using a difference-in-differences (DID) model. The finding suggests that government-guided funds can effectively stimulate corporate technology innovation activities. Mechanism tests reveal that government-guided funds can encourage corporate innovation by alleviating financial constraints and attracting research and development experts. Additionally, government-guided funds have varying effects on the technology innovation of different types of enterprises within the new energy automobile industry chain, including upstream, midstream, and downstream companies. The study's findings have specific policy implications for increasing government-guided fund assistance and optimizing fund investment direction.

Analysis of the Impact of Monetary Policy Instruments on Economic Growth in Indonesia by 2013 to 2023

Based on quarterly data by 2001Q1 to 2017Q2, this research and study covers theoretical debates and empirical studies on the factors that affect economic stability and their effect on the financial sector's performance. This study applies the Ordinary Least Square (O.L.S.) method to the Cointegration and Engle Granger-Error Correction Model (E.C.M.) methods. E.C.M. is done to assess the long-term validity and balance of the research model and foresee potential flaws and discrepancies among the theoretical and statistical models. Even while the M2 variable has no discernible effect on G.D.P. during the observation period, the research findings demonstrate that, over the long run, there is a balance among changes in G.D.P. and monetary variables, such as interest rates, Inflation, M2, and the rupiah value. On the other hand, the E.C.T. variable has a significant short-term effect on fluctuations in G.D.P. Interest rates, Inflation, M2, and exchange rates had no discernible effect on G.D.P. throughout this time. Thus, changes in monetary variables, particularly interest rates, Inflation, and M2, tend to effect G.D.P. The average quarterly financial deepening in Indonesia for the observation period was 3.80 per cent, according to the outcomes of the financial performance study. Furthermore, M2 growth during the same period was 3.03 per cent, compared to Indonesia's average quarterly economic growth of 1.36 per cent.

Wood-based policies as a driver for the climate transition

Abstract In the context of global accelerating urbanization, the total floor area of buildings is expected to double by 2060, with a significant impact on the environment. While cities made consistent progress towards increasing energy efficiency, accounting for, and reducing embodied emissions for new and renovated constructions represents one critical priority for mitigating this impact and reaching genuine carbon neutrality. Wood is a renewable and carbon-positive material, which can have a meaningful contribution to changing paradigms on net-zero carbon ambitions of cities, but still faces the challenge of an immature integration into urban development policy framework. Through the Horizon 2020 “Build-in-Wood” project we addressed the challenge of translating novel wood building systems, pilots, wood value chains for the construction of multi-storey wood buildings, and promising practices into policy. As a result, we formulate transferable lessons learned, recommendations, and criteria that can serve as guidance for municipalities and policymakers who aim to channel their efforts toward creating a more sustainable built environment by prioritizing wood, either implicitly or explicitly. We achieved this by working on understanding the real needs of cities and territories, the drivers, and the key entry points and preconditions for new policies supporting multi-storey wood buildings and genuine carbon neutrality. Specifically, the findings are based on the close collaboration with seven affiliated cities (Early Adopter Cities in Europe), outlining and integrating the results of (i)Multi-criterial urban planning, strategic and regulatory context analysis, (ii)Participatory and co-design approaches implemented with their local stakeholder ecosystem from the wood construction value chains and (iii)Research of different best practice policies at national, regional and local level from different parts of the globe, that incentives through informative, financial, research or regulatory instruments building with wood. The entire process is presented in the form of a Build-in-Wood Policy Catalogue [1], offering insights on working with Early Adopter Cities and guidance for improving policy, governance, and the decision-making process for subnational governments. The research was not intended to be exhaustive in documenting all existing policies because of the field’s dynamics, but rather to provide an overview and understanding of different policy instruments’ applicability and potential impact.

Environmental Taxes as a Path to a Green Transition

The integration of sustainability elements into all spheres of human activities is one of the primary initiatives of policymakers in individual European countries, but also in a broader international perspective. The transition towards more sustainable production-consumption models is now becoming a challenge for European countries. This shift is an essential part of the commitments and goals that the European Union has set itself in the medium and the long-term horizon. The future economic orientations of European countries will depend not only on the willingness and effort to use classical tools in the process of creating a green future, but especially on the level of knowledge of their appropriate implementation in practice. The paper is focused on the issue of the evaluation of selected economic instruments of environmental policy (environmental taxes) in the European area in the context of the transition to a green economy. The aim of the paper is to evaluate the use of taxes with an environmental aspect across European countries and to analyse the similarities in the process of their application towards green transformation. The need for a deeper knowledge and understanding of this area is essential in the context of the implementation of the Sustainable Development Goals in the countries involved in the 2030 Agenda. Keywords: environmental taxes, sustainability, energy, transport, green transition

Macroprudential policy and systemic risk in G20 nations

Using a panel of 496 banks from the G20 nations, the study assesses the role of macroprudential policies in reducing systemic risk. The study further assesses the utility of these policies in conjunction with monetary policy instruments and bank and country-specific characteristics and finds the significant impact of macroprudential policies in curbing systemic risk and promoting economic stability. The study finds this relationship to hold regardless of economic conditions like inflationary pressure and financial distress. The result highlights that easing macroprudential policies during financial distress can help banks cope with systemic losses. We split the macroprudential policies into policies targeting the demand and supply of loans and find complementarity among the policies to reduce systemic risk. Our results demonstrate the heterogenous effect of macroprudential policies in limiting systemic risk, with the effect varying with bank size, leverage, liquidity, and concentration of loans. Finally, we find a moderating role of these policies in limiting the impact of uncertainties on systemic risk.

Fostering organizational performance through innovation: The roles of environmental policy instruments, organizational learning supports, and intellectual capital

This study aimed to examine the key factors that influence entrepreneurial innovation and organizational performance, specifically focusing on the impact of environmental policy instruments, intellectual capital, and organizational learning. In the context of the resource-based view and institutional theory, the authors developed a comprehensive research model to establish hypotheses about the relationships between these factors. Utilizing a survey-based technique with random sampling, this study analyzes the complex relationships between variables by employing structural equation modeling. Data were obtained from 323 members of management teams from Vietnamese firms. The results emphasize the significant advantage of accruing intellectual capital and fostering organizational learning in response to the impact of environmental policy instruments on entrepreneurial innovation. Furthermore, integrating intellectual capital, entrepreneurial innovation, and organizational learning is shown to improve organizational performance. Entrepreneurial innovation plays a role in connecting organizational performance with intellectual capital and organizational learning. The study’s findings provide valuable insights for scholars and professionals, enhancing comprehension of complex interactions among various elements. Entrepreneurs can utilize these observations to develop inventive tactics that harness both internal and external resources to effectively promote innovation and improve business performance.

Russian counter-sanctions and smuggling: Forensics with structural gravity estimation

Trade and other economic sanctions are a common foreign policy instrument, but their imposition may induce smuggling. We develop and implement procedures to study smuggling after the food embargo imposed by Russia on Western countries after the annexation of Crimea in 2014. We construct predicted trade flows for the post-sanctions period using an estimated structural general equilibrium gravity model with many industry sectors and compare those predictions with actual trade flows. We identify a substantial value of suspicious trade flows which we associate with smuggling; especially importing banned goods through third countries such as Belarus. The structural gravity model systematically under-predicts trade volumes for country-product combinations used as channels for smuggling of the banned goods. We identify a quantity of smuggling equivalent to approximately 11 to 17 percent of the pre-embargo trade flows.

Types of learning and varieties of innovation: how does policy learning enable policy innovation?

Policy innovation is considered important for addressing major challenges such as climate change and the sustainable energy transition. Although policy learning is likely to play a key role in enabling policy innovation, the link between them remains unclear despite much research on both topics. To address this gap, we move beyond a binary treatment of policy innovation and differentiate policy problem innovation from policy instrument innovation and policy process innovation. Subsequently, we synthesise the literature on policy learning with the research on the multiple streams framework (MSF), a well-known lens for explaining policy innovation. Like earlier policy learning studies, we distinguish several types of learning by posing the key questions of learning, but in the context of each stream of the MSF: who learns (actors), what (beliefs), how (modes), and to what effect (ripening). This new conceptualisation clarifies the relationship of each type of policy learning to the varieties of policy innovation. Further, it indicates that policy learning is likely to result in policy innovation if and only if it influences the coupling among the three streams during a window of opportunity – through policy entrepreneurship – and not otherwise. We conclude with the implications of this study for future research on policy innovation, policy learning, and the MSF.

Pakistan-US relations: examining sustainable bilateral cooperation via civil society collaboration

Pakistan and the United States (US) have struggled to form mutually beneficial foreign policies that withstand volatile political phases. In the current global context, there is an urgent need for innovative and practical approaches to enrich the field of international relations, allowing policymakers to overcome diplomatic deadlocks. This research examines the potential role of a sustainable development approach with civil society organisations (CSOs) as the implementing instrument of foreign policies. Through case studies of successful CSO initiatives across economic, social, and environmental pillars, specifically covering SDGs 3, 8, 13 and 17, the study observes and empirically examines the multisectoral operations of US-based civil society in Pakistan, highlighting its comprehensive impact on the people as well as uncovering the resilient nature of civil society-led cooperation between states. The research finds that integrating civil society into foreign policy can create resilient and sustainable development-oriented bilateral relations, offering a practical strategy for enhancing collaboration and achieving sustainability. This model presents a pathway for countries to transcend transactional ties and establish lasting, mutually beneficial partnerships. The study also opens doors for further research in IR to welcome the sustainable development paradigm in bilateral studies.

Особенности торговой политики Китая: текущее состояние и направления развития

This article analyzes the current state, main instruments, and directions of development of China's trade policy in the context of the confrontation between the two global economic leaders, China and the USA. Understanding the meaning that China embeds in the concept of "trade policy" will enable Russia to perceive the logic of China's decisions and effectively build cooperation with China in the economic sphere and the related ones. The aim of this study is to identify the peculiarities of China's trade policy. To achieve this, the article examines the main indicators and instruments of China's trade policy, considers the current viewpoints of Chinese economists on trade policy, and analyzes activities concerning its implementation. Particular attention is given to the methods China uses to increase its influence in the global economy. The findings demonstrate that through its trade policy, China aims not only to enhance its economic power but also to shape new global rules and standards, reflecting its aspiration for leadership in international economic relations. China’s tariff system and the enforcement of non-tariff measures effectively protect its domestic market from foreign competition and encourage investments in the development of competitive high-technology production on the global market. The article shows that in China, the concept of "trade policy" encompasses a broader set of tools and measures than the commonly accepted tariff and non-tariff measures. Within its trade policy framework, China addresses a range of tasks, from the internationalization of the national currency to uniting developing countries and gaining priority in setting technical standards for goods and services. It is shown that China has been working in this direction for several decades, specifically since the early 2000s.