Designing intergovernmental fiscal transfers for conservation: The case of REDD+ revenue distribution to local governments in Indonesia

A REDD+ scheme would involve the transfer of financial resources to forested developing countries taking part in it. This paper simulates different approaches to the design of intergovernmental fiscal transfers (IFTs), a possible means to channel a REDD+ international payment to local governments which, in several countries, have a certain degree of authority over forest management. Using Indonesia as a case study, the cost-reimbursement and the derivation approaches are tested. It is demonstrated that both approaches could be used. Using the cost-reimbursement approach, localities with more degraded forests would receive a higher compensation per unit of carbon emission reduction than districts with primary forests. Avoiding further conversion of logged-over areas is associated with higher opportunity costs when compared with preventing the conversion of primary forests. In contrast, the derivation approach sets a fixed percentage and rate to distribute REDD+ revenues and ignores the opportunity costs of REDD+ incurred by local governments. The distribution of REDD+ revenues to eligible local governments is based on an assumed market price of carbon credits from REDD+. This paper concludes by discussing the implications of the findings for designing the distribution of REDD+ revenues, both for Indonesia and more generically for other developing countries.     

Port system evolution – the case of Latin America and the Caribbean

The explosion of global container trade in the last two decades has significantly influenced the port geography of Latin America & the Caribbean (LAC), leading to a concentration of container traffic at selected ports. Theory suggests that, as port systems become mature, they tend to deconcentration, partly due to the emergence of secondary ports. Previous research has examined the region’s dominant ports, but an unanswered research question is how the evolution of this port system is influencing and being influenced by the actions of those ports currently occupying a secondary rank in the LAC port hierarchy.The methodology is based primarily on analysis of time series data on container movements between 1997 and 2012, revealing patterns of cargo flows and transhipment location choices. The institutional context of devolution processes and new investments in the region provides additional insight into the performance of selected ports. From a theoretical perspective, this analysis is situated within the context of recent institutional approaches that examine the port’s ability to act through critical moments and junctures, in order to deepen understanding of which of the various factors influencing port system deconcentration are the most sensitive to successful institutional adaptations.Results show that the manufacturing of strategic locations can be successful and may have driven the emergence of secondary ports in the LAC system. This finding demonstrates how path dependence can be challenged by new developments, the identification and success of which are nevertheless contingent on factors such as the first mover advantage, port planning regimes and diversification of port roles. The paper identifies some of the key factors influencing the transition of a port system from concentration at a few dominant ports to a deconcentrated system of primary and secondary ports, which can be applied to other port systems in future research.     

Integrating decentralised land administration systems with traditional land governance institutions in Ghana: Policy and praxis

The aim of the Land Administration Project (LAP) policy reform for supporting the establishment of the Customary Land Secretariats (CLSs) is to formalise and strengthen customary land administration and management within the context of decentralised land administration. With the prospects of the CLSs becoming the legal local land administrative units, the paper assessed how traditional land governance institutions may have contributed to the decentralisation of land administration in Ghana. The research used case study strategy within the qualitative research paradigm and un-structured questionnaires were used to collect data. The analyses show that, simple land registries exist with traditional local governance institutions through the CLSs. The maintenance and effectiveness of this however depends on continuous improvement of records keeping, quality of office personnel and suitable office accommodation. This should be devoid of local power struggles among current and successive chiefs. Also, collaboration with public land sector agencies especially in areas of sharing information on rights, uses, disputes and preparation of planning layouts is paramount. These registries are mere extension of the state land administration apparatus as service units under the deconcentration of land administration powers. The paper concludes that the current policy focus on strengthening decentralised land administration through the CLSs may fail if attention is not given to the maintenance of the local registries. Revenue generation capacities of the CLSs need to be enhanced in order for them to recruit and maintain quality office staff, and acquire technical logistics. Decentralising land administration to the CLSs under the deconcentration of powers should be maintained in the interim because of the teething problems identified with this current system.     

Evolutionary governance in mining: Boom and bust in peripheral communities in Sweden

This study investigates the consequences of dramatic price fluctuations on the global iron ore market between boom and bust for the Swedish communities Kiruna and Pajala, located above the polar circle, in the years 2006-2018. It focuses on the impact of the Swedish state’s reorientation towards neoliberal policies that have entailed reduced state involvement in peripheral communities still dependant on heavy industry. This reorientation was manifested in the Mineral Strategy presented by the liberal-conservative government in 2013, in which the state was prescribed a role as facilitator of investment of foreign and private capital in the Swedish mining sector, but not as an active owner or developer of mining enterprises. The neoliberalisation of Swedish mining has established a fundamental conflict of interests between communities whose economic, social and cultural wellbeing depends on long-term state commitment, and the state whose main interests are aimed at global capital flows rather than the maintenance of industrial production in peripheral regions. This conflict remained latent as long as global mineral prices were high, but as boom turned to bust around 2012, it was activated in a way that highlighted asymmetric relations of power and economic development between the sparsely populated and resource-rich northern parts of the country and the densely populated south.     

Taxation and social protection under governance decentralisation

Governments do not have perfect information regarding constituent priorities and needs. This lack of knowledge opens the door for groups to lobby in order to affect the taxes they pay the government. We examine the political economy of a decentralised revenue-raising authority in light of social protection expenditures by constructing a theoretical model of hierarchical contests and comparing the implications of centralised with decentralised governance. Increasing information available to the government may generate additional expenditures by constituencies trying to affect government taxation decisions.     

The Game Form Approach to Redistribution

This paper reviews the game form approach to redistributive policies. This approach provides a justification for studying tax systems as good institutional arrangements for reallocating resources in a heterogeneous society. After situating the problem of asymmetric information for public policy, the paper provides a short overview of the main concepts and results in implementation theory. Next, these tools are used to inquire about the possibility to decentralise the reallocation of resources in a production economy with the help of tax/transfer systems. Finally, the paper deals with some recent extensions of the theory. A simple example is used throughout to illustrate the different results.     

Learning and Bounded Rationality

Sargent, Thomas J., Bounded Rationality in Economics Kirkman, Alan and Salmon, Mark, Learning and Rationality in Economics     

Harnessing artificial intelligence (AI) to increase wellbeing for all: The case for a new technology diplomacy

The field of artificial intelligence (AI) is experiencing a period of intense progress due to the consolidation of several key technological enablers. AI is already deployed widely and has a high impact on work and daily life activities. The continuation of this process will likely contribute to deep economic and social changes. To realise the tremendous benefits of AI while mitigating undesirable effects will require enlightened responses by many stakeholders. Varying national institutional, economic, political, and cultural conditions will influence how AI will affect convenience, efficiency, personalisation, privacy protection, and surveillance of citizens. Many expect that the winners of the AI development race will dominate the coming decades economically and geopolitically, potentially exacerbating tensions between countries. Moreover, nations are under pressure to protect their citizens and their interests—and even their own political stability—in the face of possible malicious or biased uses of AI. On the one hand, these different stressors and emphases in AI development and deployment among nations risk a fragmentation between world regions that threatens technology evolution and collaboration. On the other hand, some level of differentiation will likely enrich the global AI ecosystem in ways that stimulate innovation and introduce competitive checks and balances through the decentralisation of AI development. International cooperation, typically orchestrated by intergovernmental and non-governmental organisations, private sector initiatives, and by academic researchers, has improved common welfare and avoided undesirable outcomes in other technology areas. Because AI will most likely have more fundamental effects on our lives than other recent technologies, stronger forms of cooperation that address broader policy and governance challenges in addition to regulatory and technological issues may be needed. At a time of great challenges among nations, international policy coordination remains a necessary instrument to tackle the ethical, cultural, economic, and political repercussions of AI. We propose to advance the emerging concept of technology diplomacy to facilitate the global alignment of AI policy and governance and create a vibrant AI innovation system. We argue that the prevention of malicious uses of AI and the enhancement of human welfare create strong common interests across jurisdictions that require sustained efforts to develop better, mutually beneficial approaches. We hope that new technology diplomacy will facilitate the dialogues necessary to help all interested parties develop a shared understanding and coordinate efforts to utilise AI for the benefit of humanity, a task whose difficulty should not be underestimated.     

Regional development policies: an assessment of their evolution and effects on the Spanish tourist model

This paper assesses the incidence of regional development policy on the evolution of the Spanish tourist model. Spain's tourist boom took place within the framework of an authoritarian, centralist regime in which no true regional policy existed. Macroeconomic interests prevailed and planning was relaxed in front of the limited economic resources available and the urgent need to earn foreign currency and give coastal areas economic dynamism, all within a favourable context of international demand growth. The country's democratisation process entailed a politico-administrative decentralisation that was more suitable for the development of an effective regional policy.Spain's entry into the European Community increased the economic resources available and largely improved regional policy principles and instruments. While the centralist policy is associated with the sun-and-beach tourist model concentrated on the coast, the new regional policy represents an essential, though sometimes unnoticed, element in the current process of diversification and spatial spread of the Spanish tourist supply.     

Doing more harm than good? Community based natural resource management and the neglect of local institutions in policy development

Approaches to natural resource management emphasise the importance of involving local people and institutions in order to build capacity, limit costs, and achieve environmental sustainability. Governments worldwide, often encouraged by international donors, have formulated devolution policies and legal instruments that provide an enabling environment for devolved natural resource management. However, implementation of these policies reveals serious challenges. This article explores the effects of limited involvement of local people and institutions in policy development and implementation. An in-depth study of the Forest Policy of Malawi and Village Forest Areas in the Lilongwe district provides an example of externally driven policy development which seeks to promote local management of natural resources. The article argues that policy which has weak ownership by national government and does not adequately consider the complexity of local institutions, together with the effects of previous initiatives on them, can create a cumulative legacy through which destructive resource use practices and social conflict may be reinforced. In short, poorly developed and implemented community based natural resource management policies can do considerably more harm than good. Approaches are needed that enable the policy development process to embed an in-depth understanding of local institutions whilst incorporating flexibility to account for their location-specific nature. This demands further research on policy design to enable rigorous identification of positive and negative institutions and ex-ante exploration of the likely effects of different policy interventions.