Policy Coordination Research Articles

Are there financial stability gains from international macroprudential policy coordination?

AbstractWe construct a core‐periphery theoretical model based on the cross‐border spillover effects of macroprudential policies, to calculate the financial stability gains from macroprudential policy coordination between the two countries. Numerical simulation results show that the gains from coordination between the core and the periphery are zero when facing reverse monetary policy shocks, when macroprudential policy coordination is not needed; however, in the case of high simultaneous loosening (tightening) of monetary policies in both countries, the macroprudential policy coordination mechanism can reduce the negative externalities of cross‐border financial spillovers and increase the total gains from financial stability; the total gains from macroprudential policy coordination increase as the peripheral macroprudential policy operating space decreases, the degree of cross‐border financial spillovers increases, and the degree of cross‐border spillovers from core monetary policy increases. Therefore, the international coordination of macroprudential policies has certain possibilities and necessities.

Interdependence and Complementarity of a Multi-Dimensional Concept of Sustainable Development and the Integrated Approach to Urban Governance—Case Study City of Zagreb

Modern cities bear the entire burden and responsibility of operationalizing the concept of sustainable development, since they are the ones that represent the greatest threat to its implementation. The sustainability of cities largely depends on the form of public governance and decision making; in fact, this interdependence is a prerequisite for all the relevant progress in sustainable development that many European cities strive to achieve. An approach to governance in European cities that has proven to be the most effective in achieving urban sustainability is an integrated one, as it encompasses the coordination, cooperation and integration of sectoral policies and the participation of different actors at all levels of governance. Considering the prominence that the concept of sustainable development holds in public policies and concepts of urban development nowadays, the aim of this paper is to present the interdependence and complementarity of a multidimensional concept of sustainable development and the integrated approach to urban governance. The empirical section of the paper is focused on the analysis of documents used as a normative basis for providing answers to the research question: Are there elements of an integrated governance approach in the City of Zagreb, and is the interdependence of the two concepts acknowledged in the normative framework?

Characteristics and evolution of hierarchical fishery policies in China – A textual analysis based on 5311 policies from 2003 to 2022

The innovative, uncertain and external nature of the fishing industry dictates that industrial policy plays an important role in its development. Rapid development through policy support has led to excellent results and leadership, while contributing to China's economic growth. Using text mining techniques, this paper conducts a hierarchical association mining of China's fishery policies based on three dimensions of policy keyword co-occurrence, policy themes and policy tools, and employs visualization methods to better reveal the dynamic evolutionary patterns of policies. Based on 5311 fishery policy texts at the national, provincial and municipal levels from 2003 to 2022 in China, three techniques of co-occurrence analysis, LDA topic modelling and similarity calculation were used to mine the texts respectively, and CiteSpace, LDAvis and ThemeRiver methods were used to visualize and analyze them. The following conclusions were obtained: (1) In terms of co-occurrence of policy keywords, there are patterns of "progressive evolution", "hierarchical lag" and "hierarchical lagged evolution". (2) In terms of policy themes, there is an evolutionary development of industries, enterprises, technologies and products from the macro to the micro level, and the "hierarchical stage correlation" feature is more obvious. (3) In terms of policy instruments, there are obvious "environmental policies are the most numerous, demand-based policies are the second most numerous, and supply-based policies are the least numerous", "the hierarchy lags behind development", "the role of central policies is strong, but the role of local policies is weak ", and "emphasis on project construction, but not on public services". Further, this paper puts forward policy recommendations in terms of shortening the time lag of industrial policies, strengthening policy coordination and improving policy content, aiming to improve the market-oriented mechanism of fishery policies, optimise public services and promote development.

"Big Triangle" No More? Role Expectation and Mutual Reassurance Between China and Russia in the Shifting US-China-Russia Relations

Abstract: I examine how mutual perception and role expectation evolve over time between China and Russia on each other's position in the international system and on bilateral relations in the context of shifting perceptions of the "Big Triangle" between the United States, Russia, and China since the late 1990s. Building on Role Theory in international relations, I use official texts, and experts' opinions during a series of key policy episodes to demonstrate that constantly adjusting role expectations and role enactment has become an important part of official Sino-Russian inter-state relations. Such relations have evolved from a more conservative, mutual role expectation of "do-no-harm" to more proactive expectations of joint efforts and policy coordination. This changing role expectation comes along with mutual reassurance against role mismanagement when both seek to substantiate the role of "significant others" beyond traditional military allies. During the 2010s, Sino-Russian bilateral relations started to be increasingly shaped by a discussion about the salience of US-China-Russia "Big Triangle."

Multilevel governance of energy transitions in Europe: Addressing wicked problems of coordination, justice, and power in energy policy

AbstractConcerns about energy transition and policies to achieve a clean energy Europe are omnipresent in all European discourses. A transformation dynamic has captured all European states, whereby the extent, scope, and direction of this transition vary between different (EU member‑) states and political levels (European, national, federal, local). Likewise, governance dynamics and policies vary between the different European governance and regulatory systems. This Special Issue aims to take stock and discuss approaches in governance and policy research to assess, analyse and evaluate this variance from a theoretical, methodological, and empirical perspective. Of particular interest are recourses to investigate concepts describing and analysing the formation of new policy fields. Within the framework of the Special Issue, the role of specific architectures in which the energy transformation in Europe is embedded (e.g., federalism and multi-level structures, institutional constellations of actors, multi-sector networks, etc.) are analysed to explain the energy transition policies and their transformative properties. Linking the empirical results back to basic research concepts and relating the results to the existing approaches in policy and governance research facilitates a better understanding of the energy transition as a classic and/or new transformation policy.

Assessing policy co-ordination in government: Text and network analysis of the UK's economic strategies

Lack of consistency has long been noted as a weakness in government policy-making, but it has previously been difficult to assess the extent of the absence of strategic co-ordination. This paper investigates this shortcoming by applying computational linguistics and network tools to provide some evidence on the lack of policy co-ordination in the UK. We use two key economic strategy documents produced during the Johnson administration—the 2021 Plan for Growth and the 2021 UK Innovation Strategy—to analyse all subsequent policy documents produced by the same administration. The extent of linguistic discontinuity provides some indication of the extent of the absence of policy co-ordination in that administration's economic policies, reinforced by analysis showing a similar lack of ‘joining up’ in government departmental networks.

Separate units for incarcerated people who committed sexual offenses: luxury or necessity?

The policy on treatment of people who commit sexual offenses (PSOs) varies greatly across countries, creating different treatment environments. This study was conducted in Flanders (i.e., the Dutch-speaking part of Belgium) where PSOs receive their treatment in the community. Before this transfer takes place, many PSOs spend time inside prison together with other offenders. This raises the question to what extent PSOs are safe in prison and whether this period would benefit from an integrated therapeutic program. This qualitative research study focuses on the possibility of separate housing for PSOs by examining the current experiences of incarcerated PSOs and contextualizing those with the professional experience of national and international experts in the field. Between 1 April 2021 and 31 March 2022, 22 semi-structured interviews and six focus groups took place. Participants were comprised of 9 imprisoned PSOs, 7 international experts on prison-based PSO treatment, 6 prison officer supervisors, 2 prison management delegates, 21 healthcare workers (both inside and outside prison), 6 prison policy coordinators, and 10 psychosocial service staff members. Nearly all interviewed PSOs reported suffering at the hands of fellow inmates or prison staff because of the nature of their offenses, varying from exclusion and bullying to physical violence. These experiences were corroborated by the Flemish professionals. Consistent with scientific research, the international experts all reported working with incarcerated PSOs who reside in living units separate from other offenders and the therapeutic benefits to this approach. Despite this growing evidence, the Flemish professionals remained reluctant to implement separate living units for PSOs in prisons because of the perceived risk of increased cognitive distortions and further isolation of this already stigmatized group. The Belgian prison system is not currently organized to create separate living units for PSOs, which has important ramifications for the safety and therapeutic opportunities of these vulnerable prisoners. International experts emphasize a clear benefit for introducing separate living units where a therapeutic environment can be created. Although this would have significant organizational and policy-oriented implications, it would be useful to explore whether these practices could be implemented in Belgian prisons as well.

Evaluating the Outcomes of Monetary and Fiscal Policies in the EU in Times of Crisis: A PLS-SEM Approach

The asymmetric level of integration within the European Union (EU) regarding membership in the European Monetary Union (EMU) has resulted in inconsistent responses to crises such as the Great Recession of 2007–2009 and the European sovereign debt crisis of 2010–2013. Furthermore, it has led to varying outcomes of monetary and fiscal policies implemented across EU countries. This paper aims to investigate the impact of monetary and fiscal policies on economic development and employment through the inflation channel in the EU between 2007 and 2015, using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that the outcomes of monetary policy have been mixed between EMU and non-EMU countries, resulting in different measures and negative spillover effects of the European Central Bank’s (ECB) policy on countries outside of the EMU. Meanwhile, the ability of fiscal policy to lower inflation and boost economic growth and employment has been limited, which means that the impact of fiscal policy on both economic development and employment and inflation has been minor. Based on the findings of this study, there should be better coordination of monetary and fiscal policies at the EU level to support the macroeconomic stability of the Union during times of crisis.

Does china’s national carbon market function well? A perspective on effective market design

The emissions trading scheme (ETS) has piqued substantial interest among economists and policymakers. China officially launched the electricity sector’s national carbon emissions trading market in 2021, making it the world’s largest compliance carbon market. In contrast to the cap-and-trade (C&T) system prevalent in other economies, China’s national carbon market employs a rate-based mechanism that implicitly subsidizes the output of regulated entities; however, is it effective? This study uses a market-design theoretical framework to explore whether China’s national carbon market functions effectively and, more critically, what leads to its (slight) underperformance. We discover that policy design, policy conflicts, policy uncertainty, inexperienced market regulation, and excessive or inappropriate government intervention are the primary constraints on this emerging market, resulting in shrinking market thickness, congested market transactions, and lack of safety. For China to establish a better national carbon market, stronger market-oriented rules, appropriate market regulation, improved policy coordination, and greater electricity market reforms are required.

Facing yet another crisis? Gender-based violence policies at the Spanish local level during COVID-19

Analyses show that crises like the Covid-19 pandemic had gendered effects. This paper explores its impact on gender-based violence (GBV) policies in Spain. We carry out an empirical analysis addressing the case of Information Centres for Women, a local institution in the region of Galicia aimed at promoting equality and tackling GBV. We use a survey to gather information on three key dimensions of GBV policies (resources, actions and coordination) before, during, and after the pandemic. The study shows that there were no significant setbacks in terms of funding and personnel during lockdown. Yet, resources were not enlarged despite increasing levels of violence. Actions had to focus on priority issues and preventive measures were mostly paralyzed, while coordination with other institutions became more difficult. Data gathered for the post-pandemic period indicates that some of these changes remained in place. The article contributes to academic debates by delving into an understudied policy issue: the impact of the pandemic on equality policies at the local level.

Economic and environmental impacts of agricultural non-tariff measures: evidence based on ad valorem equivalent estimates

Non-tariff measures as hidden barriers to agricultural trade would not only result in production and welfare distortions due to the international relocation of activities along the agricultural value chain, but also yield subsequent consequences to both the scale and distribution of carbon emissions from the agri-food system. This paper estimates ad valorem equivalents of non-tariff measures using a gravity model in combination with detailed bilateral trade data of 2001-2019, and incorporates the estimations in the Global Trade Analysis Project model and a multi-regional input-output table of Eora26 to quantify economic and environmental impacts of non-tariff measures. We show that while tariff equivalents are on average positive for all types of non-tariff measures, there are substantial heterogeneities across countries and products. The extra trade barriers imposed by these measures would increase the scale of domestic agriculture-related sectors for most agriculture importing countries, and vice versa for major exporters. Meanwhile, they would reduce the global welfare at amount of 16 millions US dollars on average and in particular, the welfare of key imposers and targeting markets of non-tariff measures. Carbon emissions from the agri-food system tend to increase about 1% around the world, especially due to the larger food processing industry in developed countries. Our paper confirms that non-tariff measures lead to both welfare distortions and carbon emissions in the agri-food system. It thus calls for urgent needs to promote further reforms of the agricultural trade regime and the policy coordination across countries to facilitate agri-food system transformation with more integration and sustainability.

Ramification of information asymmetry on a green supply chain management with the cap-trade, service, and vendor-managed inventory strategies

The competition in the supply chain business has become considerably challenging. The environment protection is another problem adjacent to the competitive business. The supply chain players follow carbon policies to reduce carbon emissions along with profit maximization. But, asymmetric information sharing among supply chain players affects supply chain profit. This information asymmetry may be profitable for a few supply chain players but not beneficial for an entire supply chain and it may cause a non-coordination within them. A green supply chain management is developed with carbon tax & cap and trade regulations, where information asymmetry is reduced by the technology support through a radio frequency identification. This study finds the best service and distance between radio frequency identification readers to reduce asymmetry, and the optimum order quantity to obtain the maximum total profit for coordination or non-coordination policy. The objective function becomes a non-linear function with inequality constraint and the optimum solutions are derived using Kuhn–Tucker conditions. The optimum values of the objective function are found by using two subproblems because of the alternative scenarios of the cap and trade policy. Results indicate that a non-coordination policy is a better strategy than a coordination policy when information and product security play a major role in a green supply chain management. The effects of changes in cost parameters are identified via sensitivity analysis. The profit of the non-coordination policy is 6.07% more than the coordination profit.

Macro-prudential policy, its alignment with monetary policy and house price growth: A cross-country study

We study how the alignment or mis-alignment between macro-prudential policy and monetary policy influences the effect of macro-prudential policy on mitigating booms in housing markets. The results based on a panel dataset consisting of 41 countries over the period of 2000–2014 show that when the two policy tools change in the same direction (loosening or tightening), the effect of macro-prudential policy on house price growth strengthens. When they change in the opposite directions (one loosening and the other tightening), the effect of macro-prudential policy weakens. Our findings also point out the heterogeneous nature of the impact showing that these effects occur mainly in emerging economies and are particularly strong for policy tools that are designed specifically for housing market. Our findings contribute to the understanding of how coordination of macro-prudential and monetary policies helps to combat house price growth and carry important policy implications.

Global banking, financial spillovers and macroprudential policy coordination

AbstractThe transmission of financial shocks and the gains from international macroprudential policy coordination are studied in a two‐region, core–periphery model with a global bank, a two‐level financial structure and imperfect financial integration. The model replicates the stylized facts associated with global banking shocks, with respect to output, credit, house prices and real exchange rate fluctuations in recipient countries, as documented empirically. Numerical experiments, based on a parametrized version of the model, show that the gains from coordination increase with the degree of financial integration, which raises the scope for spillback effects from the periphery to the core, through trade and private capital flows. However, even when coordination is Pareto‐improving, the resulting gains may be highly asymmetric across regions.

Bangkit Lebih Cepat: Melalui Program Pendampingan SDM dan Perencanaan Usaha Dengan Memanfaatkan Aplikasi Marketplace di Masa Pasca Pandemi Covid-19 pada Toko Sembako “Winda Jaya” Surabaya

As a result of the Covid-19 pandemic that hit Indonesia in 2020, it has resulted in a decline in the economy and activities in various sectors and regions of Indonesia. In 2023, the economic condition, which was in shock due to the Covid-19 pandemic, is gradually improving in line with the stability of the domestic financial market and the stretching of several economic sectors. The Government of Indonesia has declared that this year our economy must recover more quickly by making policy steps to strengthen the economy accompanied by transparent prioritization and proper policy coordination and synchronization. The community service team at the Faculty of Economics and Business, Surabaya University of Technology feels compelled to participate in the success of government programs by creating HR assistance programs and business planning by utilizing marketplace applications in the post-Covid-19 pandemic for business development and increasing sales turnover. The accompanying partner this time is the "Winda Jaya" Surabaya staple food shop, which sells various basic household needs such as rice, sugar, coffee and others. The community service team at the Faculty of Economics and Business tries to identify problems based on the collected data. After further analysis, the community service team formulated the problem as follows: (1) Lack of partner's understanding of management functions and how to manage HR, (2) Lack of partner's understanding of making good business plans, (3) Partner's lack of understanding about tips and tricks for successfully utilizing marketplace applications. The method used is divided into 3 (three) stages, namely the preparation stage, the activity implementation stage and the closing stage. The results of this community service activity are an increase in understanding by companion partners of management science material, procedures for managing human resources, making a good business plan and how to use marketplace applications for business development. This community service activity (PkM) is in the framework of implementing the Tridharma of Higher Education and also supports the Surabaya City Development Synergy Program

Political polarization and international cooperation

We analyze the consequences of political polarization between domestic policymakers for international policy coordination or delegation to a common agency. Coordination is preferred under political polarization if it allows to constrain the policy of policymakers with different policy targets, while delegation allows to determine policies in the future by selecting the appropriate agent. Policymakers have different preferences concerning international coordination and which form it should take. These differences are increasing in political polarization. They agree on delegation if election outcomes are close to being random.

Optimal macroprudential and fiscal policy in a monetary union

The link between the financial system, economic activity, and fiscal sustainability is increasingly evident, making the joint study of fiscal and macroprudential measures a promising area to investigate. This paper provides a novel analysis of the coordination of optimal fiscal and macroprudential policies regarding welfare maximization through a two-country model for a monetary union. I find that the advisability to coordinate macroprudential and fiscal policy depends on the kind of shock that hits the economy. After financial shocks, macroprudential-fiscal coordination at the national level entails the greatest welfare improvements. Under supply and demand shocks, the best option regarding welfare implies macroprudential-fiscal coordination to stabilize union aggregate variables.

Government debt deleveraging in the EMU

We build a Two-Country Open-Economy New-Keynesian DSGE model of a Currency Union, with a debt-elastic government bond spread and incomplete international financial markets, to study the e ects of government debt deleveraging. We evaluate the stabilization properties and welfare implications of di erent deleveraging schemes and instruments, under a range of alternative shocks and under alternative scenarios for fiscal policy coordination, bringing to policy conclusions for the proper government debt management in a Currency Union. We find that: a) coordinating on the net exports gap and consolidating budget constraints across countries when deleveraging provides more stabilization, b) taxes are a better instrument for deleveraging compared to government consumption or transfers, c) by backloading the deleveraging process one can achieve greater stabilization over time, d) deleveraging government debt increases the volatility and persistence of the economy after other shocks. Our policy prescriptions for the Eurozone are to reduce government debt more gradually over time and less during recessions, to do so using distortionary taxes, while concentrating on reducing international demand imbalances and maybe creating some form of fiscal union.

Socially responsible agencies*

Should agencies confine their role to their main duty or should they embrace new and desirable societal objectives? This article first discusses two emblematic examples of mission expansion: socially responsible competition authorities and green central banks. It then sheds light on the ongoing debate using contributions to bureaucratic design in economics and political science. On that basis, it warns against the risks associated with the loss of accountability, institutional conflicts, and the lack of policy coordination.

CAUSES OF MIGRATION AND ITS IMPACT ON THE ECONOMY

Migration is a process with multi dimensions, which ambiguously effects on various components and individual parameters of the economic life of the host society. Furthermore, direction and intensity of this influence may be importantly different in each concrete case. Due to the specific of immigration, evaluation of its results is difficult task, which requires comprehensive and balanced analysis. It was traditionally considered that immigration provides host society with lost labor recourses and it significantly contributes in their economic development. Migrants often settle within their home region. However, a significant part of international migration takes place over long distances and, in particular, from emerging market and developing economies toward advanced economies. A major reason why people migrate is income differences between origin and destination countries. Richer countries attract more immigrants, especially from countries with younger populations. There is difficulty to evaluate effect of immigration on economic. This is impact on tax incomes and expenses of government. On one side, immigrants pay taxes, helping cover the cost of government. On the other side, they impose costs on the government, because their cars need roads to drive on, their children need schools to study in, and so on. Because many immigrants earn low wages and hence pay low taxes, some estimates suggest that immigrants cost more in additional spending than they pay in. Despite the above international policy coordination is needed to tackle the challenges from refugee migration. This includes sharing the costs from hosting refugees and fostering their integration with emerging and developing economies, such as language training and easier validation of professional titles, can help build even better outcomes from immigration in recipient countries. Keywords: War, labor migration, former international students as labor migrants, unemployment, specialization of agricultural production, protected schemes, increase of incomes.