Project: FREE policy brief

Political Implications of the Rise of Mobile Broadband Internet

Posted on February 8, 2021 | Policy Brief

Image of 5g broadband tower representing implications mobile internet

In the last ten years, the world has experienced the dramatic rise of mobile broadband internet brought by third-generation (3G) and fourth-generation (4G) mobile networks. This has resulted in major political changes – reduced confidence in governments around the world, lower voting shares of incumbent political parties, and the rise of populists. The empirical evidence is consistent with both the optimistic view of 3G internet (the “Liberation Technology”) and the pessimistic one (the “Disinformation Technology”). 3G internet helps to expose actual corruption; however, it also contributes to electoral successes of populist opposition.

The Spectacular Rise of 3G

Communication technologies have undergone a dramatic change in the last 10-15 years. According to the International Telecommunications Union (ITU), there were only 4 active mobile broadband subscriptions per hundred people in the world in 2007, while this number reached 75 per hundred in 2020. The growth of mobile broadband internet – provided by the third and fourth generation of mobile networks (3G and 4G, respectively) – was the main driver of growth in broadband access. The number of fixed broadband subscriptions per hundred people has only increased from 5 to 15 percent in the same period of time.

Relative to the previous generations of mobile technology, 3G provides a qualitatively different way of using the internet. First, it is broadband access on the go, available wherever the user is rather than at a fixed point at home or in the office. Second, it allows for downloading and uploading photos and videos. Before 3G, mobile technology only allowed exchanging text messages along with limited and slow access to the web. Third, it is the technology that is best suited for social media. While social networks started before 3G and were initially accessed on fixed broadband, today most Facebook, Twitter and YouTube users are mobile.

Liberation Technology or Disinformation Technology?

What are the political implications of the spread of this new technology around the world? Initially, political scientists were excited about the internet as a “Liberation Technology”, especially after it played an important role in the Arab Spring. Internet – and in particular mobile internet –helped pro-democracy activists in autocratic states to disseminate critical information about the government, expose corruption, and coordinate protests.

Later on, however, it became clear that social media also provided a platform for the dissemination of false news and hate speech – thus supporting the rise of populists. This led to a rethinking of the role of mobile internet – and rechristening it into a “Disinformation Technology.”

Which view, the optimistic or the pessimistic one, is correct? In Guriev et al. (2021), we study the impact of the expansion of 3G around the world on attitudes to government and electoral outcomes.

Exposing Actual Corruption

In order to explore the effects on confidence in government, we use data from Gallup World Poll surveys of 840,537 individuals from 2,232 subnational regions in 116 countries from 2008 to 2017. In each region and year we calculate the population-weighted average access to mobile broadband relying on the network coverage data from Collins Bartholomew’s Mobile Coverage Explorer.

First, we find that increased access to 3G internet causes lower confidence in government, judiciary, honesty of elections, and a lower belief that the government is not corrupt. As shown in Figure 1, the magnitudes are substantial. In our paper, we show that a decade-long 3G expansion has the same effect on government approval as a 2.2 percentage-point rise in the national unemployment rate.

Figure 1. Mobile Broadband Access and Government Approval.

Source: Guriev et al. (2021), Table 1, authors’ calculations.

This effect is only present when there is no online censorship and stronger when traditional media are not free. Furthermore, the spread of 3G makes people think that the government is corrupt when the actual corruption is high. In the cleanest countries of the world, the effect is actually positive – better access to information may help citizens to understand that other countries are much more corrupt relative to their own. 

This positive impact is, however, limited to about 10% of the world’s countries. On average, the effect of 3G on the perception that government is clean is negative (see Figure 1). There are two potential explanations. First, as suggested by Gurriv (2018), before the arrival of the fast internet, the elites controlled the media and, as a result, the public was not fully aware of the elites’ corruption. 3G helped to expose this corruption and corrected the pre-3G positive bias. The second explanation is related to the negative bias of social media where critical messages spread faster and deeper (see the references in Guriev et al. 2021).

Another potential explanation is that social media promote overall negative and pessimistic attitudes. We show that this conjecture is not consistent with the evidence: the spread of 3G does not reduce life satisfaction or expected future life satisfaction.

Helping European Populists

The evidence above is consistent with the view that mobile broadband internet and social media help to expose misgovernance and corruption. These findings are in line with the optimistic view of mobile broadband internet as a “Liberation Technology.” However, it turns out that the pessimistic view of “Disinformation Technology” may also be correct.

We examine the impact of 3G expansion on the outcomes of 102 parliamentary elections in 33 European democracies between 2007 and 2018. Using subnational data, we show that the spread of 3G, not surprisingly, decreases the vote share of incumbents substantially (see Figure 2).

 Figure 2. The impact of 3G expansion on incumbent vote share in Europe.

Source: Guriev et al. (2021), Figure VIII.

Figure 3. The impact of 3G expansion on opposition vote share in Europe.

Source: Guriev et al. (2021), Figure IX.

If incumbents lose votes, who picks them up? We show that the main beneficiaries of 3G expansion are the populist opposition parties, both on the left and right (Figure 3). The non-populist opposition does not gain.

Why do populists benefit from the spread of mobile broadband and social media? One explanation is that social media is decentralized and has no entry barriers. It is not the first time in history that populist politicians have relied on new communication technology to circumvent mainstream media controlled by the elites (e.g. the US late 19thcentury populists used telegraph and railroads, the Nazis in Germany used radio). It may also be the case that populist messages may be simpler, and thus, better suited for a short and catchy communication on social media. For example, another pan-European family of anti-system parties, the Greens, do not benefit from the spread of the 3G internet at all (see Figure 3): their narrative is more complex, asking voters to take responsibility for the planet.

Fact-Checking Alternative Facts

Many populist politicians point to actual corruption of the incumbent elites, but some also spread false narratives or “alternative facts.” (It was Donald Trump’s Counselor Kellyanne who, in January 2017, when asked to comment on false statements by Trump’s Press-Secretary about his inauguration, famously said that these were not falsehoods but “alternative facts.”) What can be done to stop the dissemination of these falsehoods on social media? Can fact-checking by mainstream media and independent organizations help?

In two studies, Barrera et al. (2020) and Henry et al. (2021), we carry out two randomized online experiments to identify the causal effects of alternative facts spread by populist politicians and their fact-checking. The findings are as follows: (i) alternative facts are highly persuasive; (ii) fact-checking helps to correct factual beliefs – but do not change voting intentions; even though the voters understand that the populists misrepresent the facts, they still support their agenda; (iii) fact-checking, however, substantially reduces sharing of alternative facts on social media; (iv) the impact of fact-checking on sharing is equally strong regardless of whether the users are forced to view the fact-checking information or are simply given an option to click on a fact-checking link; (v) asking users to re-confirm their intention to share alternative facts with an additional click greatly reduces sharing.

Our results suggest that fact-checking may not be as effective as fact-checkers themselves hope, but can help slow down the dissemination of falsehoods on social media. Furthermore, our analysis delivers clear policy implications – both providing fact-checking (even in the form of accompanying alternative facts with fact-checking links) and requiring additional clicks before sharing can be very effective.

Conclusion

The findings from our analysis of the worldwide spread of mobile broadband internet in the last decade are consistent with both optimistic and pessimistic views. On the one hand, 3G internet does help expose actual corruption. On the other hand, it helps populist opposition to gain votes. Likely, the latter result is eventually due to the populists’ abuse of online platforms for spreading disinformation. We show that the propagation of falsehoods on social media can be at least partially slowed down by fact-checking.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Pollution and the COVID-19 Pandemic: Air Quality in Eastern Europe

Posted on February 1, 2021 | Policy Brief

Factory with chimney smoke representing air-quality Eastern Europe

The COVID-19 pandemic has drawn attention to a pre-existing threat to global health: the quality of air in cities around the world. Prolonged exposure to air pollution has been found to increase the mortality rate of COVID-19. This is a particular concern for much of Eastern Europe, where emissions regularly exceed safe levels. This policy brief analyses recent data on air quality in the region and the factors that explain a persistent East-West divide in pollution in Europe. It concludes by evaluating to what extent lockdowns in 2020 provided a temporary respite from pollution in the region. 

Introduction

The WHO estimates that air pollution causes seven million premature deaths every year (WHO 2018). COVID-19 has further amplified these health risks, as air pollution can increase both the chance of catching respiratory diseases and their severity. At the same time, the pandemic has resulted in lockdowns and a general slowdown in economic activity which are widely perceived as having led to a temporary improvement in air quality.

This brief provides an overview of recent trends in air quality in Eastern European cities using data from the World Air Quality Index. It addresses three questions:

  1. How did air pollution in Eastern Europe compare to Western Europe prior to the pandemic?
  2. What are the main sources of air pollution in Eastern European cities and can they be addressed by policymakers?
  3. Was there a significant improvement in air quality in 2020 as a result of COVID-19?

Air Pollution in Eastern Europe

Most measures of air quality in Europe show a stark East-West divide. Map 1 plots the share of days in 2019 where air pollution, as measured by PM 2.5 (fine particulate matter), exceeded levels classified as unhealthy for the general population. On average, cities to the east of the former Iron Curtain experienced over 100 such days, compared to an average of 20 days in Western Europe. These averages mask significant variation within both regions; Tallinn was among the best performing cities while Naples was among the worst.

Map 1

Source: Author’s calculations based on data from the World Air Quality Index COVID-19 dataset. Above the threshold AQI of 150, PM 2.5 levels are classified as unhealthy to the general population by the US EPA.

The gap in air quality between Eastern and Western Europe has been linked to differences in health outcomes for decades. Shortly after the fall of the Soviet Union, Bobak and Feachem (1995) found that air pollution accounted for a significant share of the Czech Republic and Poland’s mortality gap with respect to Western Europe. The European Environment Agency’s 2020 report provides estimates for ‘years of life lost’ attributable to different pollutants. Figure 1, which plots these estimates for PM 2.5, highlights the fact that Eastern European countries, in particular those in the Balkans, continue to experience significantly higher mortality related to pollution, as compared to their Western European counterparts.

Figure 1

Source: estimates from EEA Air Quality in Europe report 2020

Sources of Air Pollution

A number of factors contribute to the pattern of pollution shown on Map 1, not all of which are under policymakers’ direct control. For example, two of the cities on the map with the unhealthiest air – Sarajevo and Skopje – are surrounded by mountains that prevent emissions from dissipating.

In addition to immutable geographic factors, policies elsewhere may also be contributing to pollution in the region. Stricter regulations in Western Europe can have adverse effects if they result in polluting industries migrating eastwards. Bagayev and Lochard (2017) show that as EU countries adopt new air pollution regulations, the share of their imports from Eastern Europe and Central Asia in pollution-intensive sectors increases. Stricter rules can also result in outdated technology being exported to other countries. A Transport & Environment report found that over 30,000 high-emission diesel cars were exported from Western Europe to Bulgaria in 2017 and argued that such flows will continue as Western European cities impose Low Emission Zones and diesel bans (Transport & Environment 2018).

Power generation, and in particular coal power, is likely to be the single most important determinant of the gap in air quality between Eastern and Western European cities. Coal power accounts for over 60% of electricity production in Poland, Serbia, Bosnia Herzegovina, and North Macedonia, and remains an important energy source in the majority of Eastern European countries (BP 2020). Many of the coal power plants in the region have been operating for decades and are not equipped with modern desulphurisation technology that would help to reduce their emissions. A report by the Health and Environment Alliance found that 16 coal power plants in the Western Balkans collectively produce more emissions than the 250 power plants in the European Union, while only being able to generate 6% of the power (Matkovic Puljic et al. 2019).

Countries in the region are taking steps to reduce their dependence on coal power. In September 2020, the Polish government struck an agreement with labour unions that would see coal phased out by 2049. Coal accounts for 75% of Poland’s current electricity and Map 1 shows that air in the Upper Silesian Coal Basin, in the south of the country, is particularly polluted. Despite such commitments, Western European countries have in recent years been faster at transitioning away from coal. If this trend continues, the gap in air quality may even increase in the short run.

Did COVID-19 Improve Air Quality?

Last spring, a number of headlines from around the world featured the phrase “A breath of fresh air” (e.g. Reuters, The Economic Times, EUIdeas). These articles described measurable improvements in air quality in cities with government-mandated lockdowns. Recent academic publications have confirmed these reports in a variety of settings including the US (Berman and Ebisu 2020), China (Chen et al. 2020), and Korea (Ju et al. 2020).

While Eastern Europe was less affected by the initial wave of COVID-19 than Western Europe, most countries imposed lockdowns and social distancing measures that can be expected to have affected air quality. Figure 2 uses daily data from the World Air Quality Index for 221 European cities to compare average air pollution in 2020 to 2019. Overall, these plots suggest that air quality did improve in Eastern European cities relative to the previous year. However, not all types of pollutants declined and the declines are slightly smaller on average than in Western European cities. Panels A, B, and C plot air quality indices for fine particulate matter (PM 2.5), nitrogen dioxide (NO2), and sulfur dioxide (SO2) respectively. Dots below the line represent cities where the average air quality index was lower (indicating less pollution) in 2020 than in 2019. The declines are largest for NO2 – a gas that is formed when fuel is burned. The reduction in traffic and transportation in all European cities is likely to have contributed to this drop. By contrast, there were no statistically significant declines in SO2. This may be due to the fact that power generation, which is the source of most SO2 emissions, was less affected by lockdowns than transportation.

Figure 2

Panel A

Panel B

Panel C

Source: Author’s calculations based on the World Air Quality Index COVID-19 dataset. Each marker represents a city. Markers below the 45-degree line represent cities where emissions for the respective category of pollutant were lower in 2020 than in 2019. For reasons of presentation, outliers were excluded from panels B and C.

The variation in COVID-19 prevalence over the course of 2020 is visible when tracking pollution over time. Figure 3 shows that average daily NO2 emissions in Western European cities dropped most from March to June of 2020, during the first wave of the pandemic. NO2 levels were comparable to the previous year in July and August when case numbers fell and restrictions were lifted. In the last months of the year, as the second wave hit, NO2 emissions once more dropped below the previous year’s average. This pattern is similar for Eastern European cities but the decline in NO2 in the first half of the year is less pronounced.

Figure 3

Source: Author’s calculations based on the World Air Quality Index COVID-19 dataset. Lines show the seven day moving average of the ratio between average NO2 emissions in 2020 and 2019.

Conclusion

The COVID-19 epidemic has highlighted the health costs of air pollution. The preliminary evidence suggests that long-term exposure to pollution increased COVID-19 mortality rates (Cole et al. 2020, Wu et al. 2020). This is a particular concern for countries across Eastern Europe which – at the time of writing – are still grappling with the second wave of the pandemic in Europe. Many people in this region have been exposed to polluted air for decades.

The pandemic has also demonstrated that air quality can improve relatively quickly when human behaviour changes. The data described in this brief suggest that Eastern Europe was no exception in this regard, although the declines were confined to some categories of pollutants. Achieving a more general, and sustained improvement in air quality will require a shift from coal power towards cleaner forms of energy.

Stimulus packages aimed at a post-pandemic economic recovery can provide an opportunity for policy to reorient the economy and accelerate such a shift. The consultancy Vivid Economics, which rated G20 member countries’ proposed stimulus packages in terms of their environmental impact, found that the ‘greenest’ stimulus proposals are those of the European Commission, France, UK, and Germany. Russia is one of the worst performers on this index (Vivid Economics 2020). Whether governments in Eastern Europe are able to take advantage of this opportunity will depend on their respective fiscal space and whether they make improving air quality a priority.

References

  • Bagayev, Igor, and Julie Lochard, 2017. “EU air pollution regulation: A breath of fresh air for Eastern European polluting industries?.” Journal of Environmental Economics and Management 83: 145-163.
  • Berman, Jesse D., and Keita Ebisu. 2020 “Changes in US air pollution during the COVID-19 pandemic.” Science of the Total Environment 739: 139864.
  • BP 2020 “Statistical Review of World Energy – all data, 1965-2019“
  • Bobak, Martin, and Richard GA Feachem. 1995. “Air pollution and mortality in central and eastern Europe: an estimate of the impact.” The European Journal of Public Health , no. 2: 82-86.
  • Cole, Matthew, Ceren Ozgen, and Eric Strobl, 2020. “Air pollution exposure and COVID-19.”.
  • Chen, Kai, Meng Wang, Conghong Huang, Patrick L. Kinney, and Paul T. Anastas, 2020. “Air pollution reduction and mortality benefit during the COVID-19 outbreak in China.” The Lancet Planetary Health 4, no. 6: e210-e212.
  • European Environment Agency 2020. “Air Quality in Europe – 2020 report“, EEA Report No 9/2020
  • Matkovic Puljic, V., D. Jones, C. Moore, L. Myllyvirta, R. Gierens, I. Kalaba, I. Ciuta, P. Gallop, and S. Risteska. 2019. “Chronic coal pollution–EU action on the Western Balkans will improve health and economies across Europe.” HEAL, CAN Europe, Sandbag, CEE Bankwatch Network and Europe Beyond Coal, Brussels.
  • Ju, Min Jae, Jaehyun Oh, and Yoon-Hyeong Choi. 2020. “Changes in air pollution levels after COVID-19 outbreak in Korea.” Science of The Total Environment 750: 141521.
  • Transport & Environment, 2018. “Briefing: Dirty diesels heading east”
  • Vivid Economics, 2020. “Greenness of Stimulus Index” December 2020 update
  • World Air Quality Index, 2021. “Worldwide COVID-19 dataset“
  • World Health Organization, 2018. “WHO Global Ambient Air Quality Database (update May 2018)”
  • Wu, Xiao, Rachel C. Nethery, Benjamin M. Sabath, Danielle Braun, and Francesca Dominici, 2020. “Exposure to air pollution and COVID-19 mortality in the United States.” medRxiv

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Optimal Recommendation System with Competing Sellers

Posted on January 25, 2021 | Policy Brief

Person Holding Pineapple Fruit Near Red Wall Representing Optimal Recommendation System

Many e-commerce platforms that connect buyers and sellers employ recommendation systems to help customers find products and services. Such platforms seek to maximize their profits which mainly comes from a commission on sales made via the platform. This may create incentives for platforms to use a recommendation strategy that suppresses competition among sellers and keeps prices and the resulting commission high. At the same time, the huge success of platforms such as Amazon suggests that they also care about customer satisfaction. Thus, the platform has an incentive to recommend goods that are cheaper and a better match for customer’s tastes. This requires not only sufficient competition between sellers but also that sellers act to improve the fit of their product to customer needs. Since these actions are typically costly, a high commission may disincentivize sellers to undertake them, thereby negatively affecting customers. Therefore, in designing the recommendation system and deciding on commissions, the platform should carefully balance the pro-competitive customer care and anti-competitive incentives to keep high prices and profits.

Introduction

When we search for a product on an e-commerce platform, such as Amazon or AliExpress, the default search outcome often contains a list of recommended products sold by vendors that are selected by the platform. The order of these sellers is, of course, not random – the platform’s decision on which sellers to recommend is strategic and there could be different forces driving such a strategy. For example, since the platform charges commission on sales, it may have an incentive to recommend the most expensive seller among those who sell similar products. At the same time, such a recommendation strategy, and high(er) prices in general, may negatively affect customer satisfaction from the marketplace and lead to a loss of its customer base. This is not in the best interest of the platform, especially if it wants to achieve long-term sustainability and growth.

The behavior of sellers adds a further layer to these considerations. Indeed, sellers are likely to adjust their pricing behavior and competitive strategies in response to a platform recommendation system.

These considerations give rise to two questions: First, how should an e-commerce platform design its recommendation system, or in other words, how does it optimally choose which sellers to recommend, which commission rate to set, etc.? Second, how does the presence of this system affect the competition and prices?

Further, a seller’s strategy may depend not only on the presence of recommendations but also on the commission rate set by the platform. Sellers usually have an option to perform costly actions in order to improve the match of their product to customers’ needs. For example, sellers may disclose more information on the characteristics of a good they are selling: spend time and money on detailed descriptions of their goods, or provide high-resolution photos. Though these actions are usually left at sellers’ discretion, they may substantially increase a customer’s satisfaction by improving the match between the purchased product and customer’s preferences.

In turn, a better fit may create a more loyal customer base for the seller, giving her more market power and increased profits. However, if the platform sets a high commission rate, sellers will have less incentive to undertake such costly actions (since the platform eats up a large share of the return to this action). This raises the questions – what is the optimal commission rate chosen by the platform, and how does the optimal commission rate affect sellers’ incentives to disclose information about their goods?

Another issue that arises here concerns the optimal precision of the recommendation system, that is, its ability to pin down customers’ tastes correctly. When the e-commerce platform deals with heterogeneous buyers, it should assess buyer’s preferences prior to making a recommendation. Although almost all research in Computer Science regarding recommendation systems focuses on how to make the precision as high as possible, I show that the highest level of precision may not be optimal from the platform’s perspective. Intuitively, this is because highly precise recommendation systems differentiate customers effectively, which in turn could give sellers local monopoly power and translate into higher prices. At the same time, an inaccurate recommendation system cannot distinguish customers with different preferences and views, which intensifies the competition by allowing sellers to compete for all customers.

In Fedchenko (2020), I address the abovementioned and other related issues on recommendation systems of e-commerce platforms. This brief summarizes the main findings of the study.

Model Description and Findings

In my model, I consider a platform that is designing a recommendation system. That is, for each seller, the platform chooses what share of customers end up receiving a recommendation to buy from this seller. This choice depends on the seller’s price, the quality of the good (if disclosed by the seller), and the buyers’ tastes. The platform also sets the commission rate it charges the sellers. I focus only on direct recommendations (i.e., the platform gives each buyer a unique recommendation). Although, in reality, platforms usually provide users with a ranking of alternatives, I assume that buyers always choose the top-ranked alternative which is equivalent to a single recommendation.

The model also assumes that a platform seeks to maximize the weighted sum of its profit (driven by commissions) and aggregate consumer surplus (motivated by the platform’s willingness to build a steady customer base). The (exogenous) weight assigned to the aggregate consumer surplus is referred to as the platform’s degree of consumer orientation (DCO). DCO is a measure of how much the platform cares about customer satisfaction and it plays an important role in determining the platform’s optimal recommendation strategy. In turn, customers have higher satisfaction if they buy a good that better fits their tastes, has higher quality, and is sold at a lower price.

Recommendation System Affects Competition

My model demonstrates that the presence of a recommendation system that charges sellers commission on sales (i.e. makes the platform have a stake in sellers’ profits) “softens” competition, and, in turn, increases prices. This effect is stronger the more a platform cares about its profits relative to customer satisfaction. The force that drives this result has already been touched upon in the introduction: if the platform has a stake in sellers’ profits, it will occasionally recommend sellers with higher prices. However, since the platform also cares about consumer surplus (which decreases if the price goes up) these high-priced recommendations will not go to all buyers, and therefore, the overall price level will not become too high. Still, the sellers are encouraged to set higher prices in this scenario, as compared to the hypothetical case in which customers know about the sellers without the platform.

Optimal Commission vs. Information Disclosure

The relationship between the commission rate and the seller’s decision on how much information to disclose is nontrivially affected by the DCO. If the DCO is high, then a higher commission rate causes sellers to disclose less information about their goods in equilibrium. If the DCO is low, the relationship is reversed: a higher commission rate increases the amount of disclosed information. This result stems from the interplay between two counteracting forces. On one hand, an increase in the commission rate decreases a seller’s return to providing disclosure, and hence, discourages sellers from making the effort to disclose. On the other hand, a higher commission rate increases the platform’s stake in the sellers’ profits and, as a result, softens competition, increases sellers’ prices and profits, and thus makes it more worthwhile for sellers to provide disclosure of their goods.

An interesting implication of this result is that for a high DCO, the optimal commission rate for a platform should be as small as possible (just enough for the platform to cover the operational cost).

Optimal Precision

Next, I show that a lower precision (i.e., ability of the recommendation system to pin down buyers’ tastes) weakens the effect of the presence of a recommendation system on competition. This happens since more imprecise recommendations effectively increase the share of “undecisive” customers and, thereby, the appeal to capture that market share. As a result, the competition for those customers will intensify.

Imprecision also affects the amount of product information sellers choose to disclose in equilibrium. However, the direction of this effect depends on the cost of disclosure: if the cost is low, a more precise recommendation system may increase the amount of disclosed information, while the result is reversed if the cost is high. The reason for that is as follows: The platform has two sources of information to infer whether a particular seller fits a certain buyer – the buyer’s preferences and the seller’s information on the quality of the product (if disclosed). If the buyer’s taste is measured imprecisely, while the seller’s information is more precise, it is optimal for the platform to focus on the latter when designing a recommendation system. This, in turn, would motivate sellers to disclose more information about their products.  In the case of low disclosure costs, this positive effect on disclosure more than offsets the direct negative effect of imprecision brought about by harsher competition and lower profits. In the case of high costs, the direct effect dominates.

I also show that some imprecision, in fact, can be optimal for the platform. Perfect precision softens the competition and results in increased prices for consumers. This negative effect on consumer satisfaction outweighs the benefits of a perfect match between seller and buyer. So, consumers prefer a certain degree of imprecision over perfect precision, which in turn, makes the platform unwilling to implement perfect precision. In other words, it is optimal to “sacrifice” some customers (i.e., not recommending them the best fitting alternative) in order to intensify the competition among sellers and, eventually, benefit all customers through lower prices.

Conclusion

The presence of a recommendation system on an e-commerce platform that charges sellers commissions on sales may cause softer competition and lead to higher prices and profits of sellers, as well as increased earnings for the platform. At the same time, it can sometimes be optimal for a platform to set a low commission rate since it would guarantee that sellers disclose more information about their goods which would improve the match between customers’ tastes and the goods they buy. If customer satisfaction is important for a platform, the indirect positive effect on customer satisfaction of a low commission rate, via sellers’ decisions, may outweigh the direct negative effect on the platform’s and sellers’ profits. Similarly, a recommendation system with some degree of imprecision can be beneficial for customers since it does not allow sellers to get local monopoly power. So, increasing the precision in the measurement of customers’ tastes – which seems to be the focus of many ongoing computer science studies devoted to recommendation systems, – may not actually be in the best interest of a platform.

In the modern era of digitalization, the use of e-commerce platforms is on the rise. Moreover, the ongoing COVID-19 pandemic has increased the use of such platforms even further. Understanding the implications of the strategies used by these platforms, such as recommendation systems, on prices, competition, and societal welfare is, thus, a necessary component for developing efficient regulation principles.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

The Southern Urals as a Touchstone for Soviet Wartime Performance

Posted on January 18, 2021 | Policy Brief

Image of a Soviet tank representing soviet war performance

As time passes and archives open, ever more topics in Russian military-economic history can be studied with primary sources. One such theme is the colossal evacuation of industrial enterprises and equipment from July 1941 onwards. Thousands of railway cars and lorries carried equipment, raw materials, as well as personnel from Ukraine, the Baltics, and western regions of the Russian Federation to the Urals and beyond. A recent documentary collection Put’ k Pobede (The Road to Victory) opens new areas for research on the southern Urals. These regional sources illustrate and add details to documents from the federal archives on the history of the Soviet military-industrial complex. Successful evacuation of industrial capacity eastwards was a decisive factor for the Soviet endurance and finally its victory in 1945. However, many empirical questions remain to be answered and analytical calculations to be done, on how in fact the Soviet system managed simultaneously to successfully evacuate factories eastwards and thousands of troop transports westwards to the fronts.

New Frontiers for Research on the Soviet War effort, 1939–1945

The role of the new industrial centers in the Urals and Siberia for the Soviet defense potential has been recognized long ago (1). From the mid-1920s, Soviet military leaders included projections for full mobilization of industrial and human resources in contingency plans for the case of war. Evacuation projects outlined which important factories were to be re-located from close-to-border areas (within the range of enemy air bombings) to well-prepared interior locations (2). Industrial plans in the late 1930s put significant emphasis on the enhancing of defense-related production, as well as on modernization of the armed forces (3).

Checking the blueprints for IS heavy tank at the Kirov Tank Factory in Cheliabinsk.

In the early 2000s, a grand research project started on the history of the Russian and Soviet military-industrial complex by exploring the main federal archives (GARF, RGAE, RGVA, and others). The project has so far resulted in five volumes that cover the period from 1914 till 1942. The first volumes show the evolution of the Russian defense industries until the mid-1930s, with special emphasis on how military considerations influenced the five-year plans for 1928–32 and 1933–37. The fourth volume starts (p. 5–85) with a historical preface by Professor Andrei Sokolov (1941–2015), who was also the author of a most informative study of the military-industrial complex. It contains documents for the crucial period up to June 1941 (4). The fifth volume reproduces relevant documents from several archives concerning the first war-years 1941 and 1942. (5)

How did Soviet security concerns change in the first stage of World War Two? In August 1939, the Red Army won a momentous victory over the Japanese forces at Khalkhin-Gol in Mongolia. Japan thereafter gave up their invasion plans against the Soviet Far East, and shifted its aggression southwards to the Philippines and Indochina. Thus, the risk diminished considerably of the USSR facing a two-front war, with tough enemy coalitions in Europe as well as in the East. (6). This strategic significance of the Red Army’s victory was apparently missed in Berlin. In 1940, the German military leaders paid attention mostly to the poor performance of the Soviet army in the Winter War against Finland (7). Encouraged by an easy victory over France by June 1940, Hitler ordered Wehrmacht to plan for war against Russia.

When the Soviet leaders in 1939 concluded a non-aggression pact with Germany, they obviously calculated that France and Great Britain were to wage a long-drawn-out war against Germany for many years, yet with uncertainty as to who would be the winning one. The drastically changed outlook after the sudden defeat of France in 1940 challenged the Soviet leaders to speed up already expansive plans for military-industrial production.

The American engineer John Scott who had worked as a welder in Magnitogorsk in the 1930s, and thereafter as a correspondent in Moscow for a British newspaper, compiled a massive dossier for the Research and Analysis department of the American intelligence O.S.S. (Office of Strategic Studies). His 1943 exhaustive “Heavy industry in the Soviet Union east of the Volga; a report prepared for the Board of Economic Warfare” covered a unique amount of data on new industrial enterprises obtained from open sources. While stationed in Stockholm as O.S.S. agent later in World War II, under the cover of a Time-Life correspondent, John Scott lectured in many cities in Sweden over his best-selling book “Behind the Urals”, which in Swedish had the more pertinent subtitle “The secret of the endurance of the Russian defense” (8). Scott emphasized that Stalinist forced drive in the 1930s had created completely new industrial zones far beyond the borders, out of reach for even long-range German air raids. This had been a revelation for many Westerners. British and American military attachés in Moscow were profoundly mistaken in 1941 when they predicted a rapid German victory. As Hitler’s Operation Barbarossa came to a standstill in the winter of 1941-42, Western assessments of the real Soviet military-industrial capabilities had to be reconsidered (9).

Relocation of a Minor Industrial Nation – the 1941-42 Evacuations

A crucial factor – likewise often neglected in Western historiography – for the Soviet military-industrial endurance was the evacuation of industry. In an unprecedented way, another Soviet defense-industrial basis would rapidly emerge east of Volga, in the Urals and in Siberia.

A fundamental Russian 12-volume work on the Great Patriotic war describes main traits of the industrial evacuation (10). Already a few days after the German invasion, the situation on the fronts forced the Soviet leadership to consider completely unexpected scenarios. It was soon obvious that the German invasion could not be stopped, as the principal Red Army doctrine had expected, at the borders. All pre-war considerations of how to mobilize the Soviet military-industrial potential were up for revision. The unforeseen disasters on Soviet territory, not covered in pre-war plans for industrial mobilization, led to the formation of a council for evacuation of factories. Tens of thousands industrial workers and millions in the civilian population must be evacuated.

The massive evacuations of entire factories, or at least the most crucial equipment, started already in July 1941 from the Baltic republics, Ukraine, and Russia’s Western regions. The council on the evacuation sent directives concerning which factories to relocate eastwards and to which cities.

Evacuated equipment installed, under open skies, even before the factory walls were built!

Evacuation organs were responsible for rail, road, and river transports, as well as for the integration of evacuated resources to existing factories or to new building sites.

Facilities and stock that could not be evacuated were destroyed so as not to fall into the hands of the enemy (“scorched earth policy”). Most complicated from a logistic point of view was the evacuation of the industrial, transport, and energy production facilities. These had to be constantly re-adapted as the military situation changed with the German armies’ further advance towards Moscow, Leningrad, and in Ukraine in particular. Troop transports towards the fronts had priority; thus, evacuation trains sometimes had to wait on sidetracks for many days.

Assembly of engines at the Urals Automotive Factory (UAZ) in the Miass city.

Hundreds of thousands of civilians were evacuated from Ukraine, southern and western parts of the Russian Federation, and sent to Uzbekistan and other interior regions. Western literature has described few aspects of the evacuation, with emphasis on problems by influx of thousands of refugees, e.g. in the cities of Kirov (now Viatka) and Tashkent (11).

Mentioned should be the successful evacuation of the country’s cultural treasures. One telling example is how the staff of the Hermitage museum and hundreds of volunteers in Leningrad managed to pack down much of the museum’s exhibits. Over a million works of art were sent in special trains to Sverdlovsk (now Ekaterinburg), where they were safely stored until 1945. Remaining paintings and sculptures were stored in the underground of the Hermitage. When evacuation could not be accomplished, German occupation forces plundered art collections, and thousands of war trophies sent home by Nazi generals.

An Innovative Source Collection Volume from Cheliabinsk

In regional studies more complex, detailed analyses of the evacuation, its successes and failures have been presented. A documentary collection Put’ k Pobede (The Road to Victory) from the Cheliabinsk State Archives (OGAChO), shows how formerly restricted topics can be studies as archive holdings are declassified. The Road to Victory contains over sixty photocopied documents. It gives short biographies of industrial managers and contains many pertinent photographs from enterprises. The interested reader of the photocopies will find a great amount of new information that calls for analysis (12). One of the primary findings in the archives is that the number of enterprises, whole or parts thereof, set up and restarted in Cheliabinsk and other cities in the southern Urals were 329 enterprises from 27 different ministries (commissariats). That is substantially larger a figure than the previously assumed number of enterprises. The leading historian on this topic, Marina Potiomkina, professor at the G.I. Nosov Magnitogorsk State Technical University, gives a thorough presentation of how evacuated enterprises in fact managed to integrate into the existing factories (13). The dimensions of this emergency relocation of entire industrial plants are enormous. Often German troops were approaching closely and the factories were under bombardment. One striking example is the report on evacuation from Zaporozhie to Magnitogorsk in 1941 as the front skirmishes already threatened several factories.

Historians like to unscramble interesting information from seemingly peripheral, marginal notes in such documents. There are lots of “food for thought” in the commentaries by the wartime managers. The reader furthermore gets a clear perspective on the massive change of the urban landscape in the region. The new administrative structure is reflected in biographies of leading managers and designers, in detailed information on every known evacuation site, as well as in the characterization of affiliate people’s commissariats (ministries) that were moved from Moscow to Cheliabinsk. Important wartime reports with photos, diagrams, and drawings are reproduced in a rich illustrative section of this book. The documentary clarifies how the relocation of equipment from the Kirov Works in Leningrad to the Tractor Factory in Cheliabinsk laid the foundations for the consolidated tank industry in the Urals. Contemporary correspondence reflects both complaints and achievements, in particular under the most severe conditions in winter 1941–42.

A meeting at the Cheliabinsk Kirov Factory: Tank industry minister Isaak Zaltsman (2d from left), Region party secretary Nikolai Patolichev (4thfrom left), chief tank designer Zjozef Kotin (9th from left).

At the end of the war in 1945 many cadres, engineers, and workers could return to their home cities in western parts of Russia. The Cheliabinsk region had undergone dramatic changes. It was then a mix of the original factories, established in the 1930s or even earlier. To this was added trainloads of evacuated equipment from Leningrad, Kharkov, and other cities. New branches, in particular of defense-related industries thus formed the basis for the postwar planning. Any of the documents in Put’ k Pobede can serve as a starting point for discussions concerning the undoubtedly strong aspects of the Soviet command economy, on the one hand, and also on which reforms might have been called for even at that time period, on the other hand.

In conclusion and forward-looking, it should be mentioned that Professor Potiomkina has recently surveyed the entire historiography of Soviet wartime industrial evacuation. Her article includes not only her own and others’ works on the Urals, but also an impressive number of contributions from other regions. Her evaluation of the character of the evacuation calls for a stricter methodology, for a common conceptualization, and for a better grasp of the primary sources, in order to estimate the relative weight of planning versus improvisation, of success stories as compared to failures in the evacuation process. (14)

Note: Illustrations reproduced with permission by Cheliabinsk Regional Archive (OGAChO).

References

  • (1) Compare my previous SITE Policy Briefs in 2015, https://www.hhs.se/sv/om-oss/news/site-publications/2015/research-of-formerly-secret-archives-sheds-new-light-on-the-soviet-wartime-economy/  and https://freepolicybriefs.org/2015/05/04/new-light-on-the-eastern-front-contributions-from-russia-to-the-70th-anniversary-of-the-victory-in-europe-in-world-war-two/; see also Samuelson, Tankograd (Swedish, English or Russian version, chapters 7, 8 and 9.
  • (2) Meliia, Aleksei, Mobilizatsionnaia podgotovka narodnogo khoziaistva SSSR, [Mobilization preparedness of the Soviet economy], Moscow: Alpina Biznes Buks, 2004.
  • (3) For a most recent work, see Robert W. Davies et altere, The Industrialisation of Soviet Russia 7: The Soviet economy and the Approach of war, 1937–1939, by, London 2018, referred to in previous Policy Brief: https://freepolicybriefs.org/wp-content/uploads/2020/07/freepolicybriefs20200702-1.pdf
  • (4) Sokolov, Andrei K. Ot Voenproma k VPK: Sovetskaia voennaia promyshlennost 1917–iiun 1941, [From Voenprom to VPK: Soviet military industry 1917–June 1941], Moscow: Novyi Khronograf, 2012, chapter IV. Compare Sokolov (ed.), Oboronno-promyshlennyi kompleks SSSR nakanune Velikoi Otechestvennoi voiny (1938 – iium 1941), [The Defence-industry complex of the USSR prior to the Great Patriotic war (1938 – June 1941], vol. IV, Moscow 2014.
  • (5) Artizov, Andrei (ed.) et altere, Oboronno-promyshlennui kompleks SSSR v gody Velikoi Otechestvennoi voiny, iiun 1941–1942, [The Defence-industry complex of the USSR during the Great Patriotic war, June 1941–1942], Moscow:  Compare lecture by RGAE Director Elena A. Tiurina on this documentary volume, Оборонно-промышленный комплекс СССР в годы Великой Отечественной войны – Российское историческоеобщество (historyrussia.org) .
  • (6) Goldman, Stuart D., Nomonhan, 1939; The Red Army’s Victory That Shaped World War II, Naval Institute Press, Annapolis 2012, for analysis of this decisive battle that was previously neglected in Western historiography.
  • (7) Compare Carl Van Dyke, The Soviet Invasion of Finland, 1939–1940, London: Routledge, 1997, for a pioneer study based on declassified Soviet archival sources, that shows lessons Stalin and his generals drew from the Winter War 1939–40.
  • (8) See John Scott, Behind the Urals: An American Worker in Russia’s City of Steel, London, 1989, new edition in with foreword by Stephen Kotkin). Idem, Vad gör Ryssland bortom Ural?: Hemligheten med det ryska försvarets kraft, Stockholm: Natur och Kultur 1943. Scott’s O.S.S. study of prewar industry in the Urals and Siberia is in the Library of Congress, Washington, DC (Manuscript Division).
  • (9) For the – mostly mistaken! – Western estimates of Soviet military capabilities before the fascist invasion as well as  many months later in 1941 – 42, compare Martin Kahn, The Western Allies and Soviet Potential in World War II: Economy, Society and Military Power, London: Routledge 2019.
  • (10) Velikaia Otechestvennaia voin 1941–1945 godov. Tom 7. Ekonomika i oruzhie voiny, [The Great Patriotic war, 1941–1945. Volume 7: The Economy and Armaments of the War], Moscow 2013, “Mobilizatsiia ekonomiki SSSR i perekhod k ekonomike voennogo vremeni”, p. 60 – 117; “Evakuatsiia kak sostavnaia chast perestroika ekonomiki v voennoe vremia”, p. 118 – 144; “Sozdanie ekonomicheskikh predposylok dlia korennogo pereloma v voine”, p. 145 – 196.
  • (11) Larry E. Holmes, Stalin’s World War II Evacuations: Triumph and Troubles in Kirov, University Press of Kansas 2017; Rebecca Manley, To the Tashkent Station: Evacuation and Survival in the Soviet Union at War, Cormell University Press 2009.
  • (12) Nikolai A. Antipin et altere (ed.), Put’ k Pobede: Evakuatsiia promysjlennosti predpriiatii v Cheliabinskuiu oblast v godu Velikoi Otechestvennoi voine 194 –1945 gg., [The Road to Victory: The Evacuation of industrial factories to the Cheliabinsk region during the Great Patriotic war 1941–1945], Cheliabinsk 2020.
  • (13) See Marina N. Potiomkina, in Put’ k Pobede, p. 7–21; idem, Evakuatsiia v gody Velikoi Otechestvennoi voiny na Urale: liudi i sudby, [Evacuation in the Urals during the Great Patriotic war: People and destinies], Magnitogorsk 2002; idem, Evakuatsiia naseleniia v gody Velikoi Otechestvennoi voiny na Ural: Gendernoe izmerenie, [The Evacuation of the populations to the Urals during the Great Patriotic war: The Gender dimension], Magnitogorsk 2019; idem, Demograficheskii aspect evakuatsii naseleniia v sovetskii tyl v gody Velikoi Otechestvennoi vony, [The Demographic aspect of the evacuation of the population to the Soviet interiors during the Great Patriotic war], Magnitogorsk 2019.
  • (14) Potiomkina, Marina N. & Aleksei Yu. Klimanov, ”Sovremennaia otechestvennaia istriografiia i perspektivy izuchenija promyshlennoi evakuatsii perioda Belikoi Otechestvennoi voiny”, [Contemporary Russian historiography and perspectives on the study of industrial evacuation in the Great Patriotic War], Noveishaia istoria Rossii, Tom 10, No 3, 2020.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

The Impact of the COVID-19 Pandemic in Eastern Europe | Key Points From the 2020 SITE Development Day Conference

Posted on December 21, 2020 | Policy Brief

A black and white colour image with people walking through the tunnel wearing masks and representing COVID-19 in Eastern Europe

After having been relatively mildly affected in the first wave, Eastern Europe is currently in the midst of the second wave of the COVID-19 pandemic with much higher levels of infected and dead compared to the spring. This health crisis not only has economic consequences but also has contributed to political instability in parts of the region. This policy brief shortly summarizes the presentations and discussions held at the SITE Development Day 2020 Conference, focusing on the consequences of the COVID-19 pandemic in Eastern Europe. 

A Swedish Government Perspective

The conference started with the Swedish Minister of International Development Cooperation, Peter Eriksson, discussing the current situation in Eastern Europe with a particular focus on the partnership with Sweden.

According to Minister Eriksson, Swedish foreign policy in general, and foreign aid policy in particular, has historically paid too little attention to Eastern Europe. He has therefore emphasized that Swedish aid should be used to promote democracy and human rights in the region. As the pandemic has exacerbated global anti-democratic trends and intensified existing inequalities, international support and cooperation have become more essential than ever.

Minister Eriksson mentioned several priority areas of Swedish aid policy in the region, such as the fight against corruption, economic reforms for poverty alleviation, gender equality, and media freedom. Emphasizing the importance of the latter, Minister Eriksson mentioned education for journalists and financial support for small independent media as important Swedish efforts in the region. He stressed that the protection of pluralistic media is also a military security matter, as countries like Georgia and Ukraine have been targets of foreign disinformation campaigns. The importance to support democracy and civil society was also illustrated by the case of Belarus, where all ongoing projects in partnership with the state or state-affiliated organizations have been suspended. The Swedish government has successfully implemented regional projects in energy efficiency and water purification, although Minister Eriksson underlined that the need for measures to slow down climate change is intensifying.  

The important role of European Union membership was also mentioned. Minister Eriksson argued that the incentives created by potential EU membership have been the main drivers of democratization, modernization, and poverty reduction as well as progress towards greener economies in the region.

In response to the pandemic, Sweden, as well as the European Union, have increased aid transfers to Eastern Europe. Minister Eriksson underlined, though, the need to not only support immediately affected sectors and outcomes, as the pandemic has many serious spillover effects in other areas already in need of help prior to the crisis.

The Economic Outlook for the Region

The second section of the conference provided a current account of the economic situation in the region by two speakers from different sectors.

Alexander Plekhanov, director for Transition Impact and Global Economics at the European Bank for Reconstruction and Development (EBRD), shared results from an EBRD survey on the impact of the pandemic. The survey was conducted in August and covered 8 emerging economies in Eastern Europe and 6 more advanced countries for comparison.

Analysis of the survey responses shows that the impact of the crisis is very broad. The share of respondents that had lost their job was 15% in emerging economies, and almost twice as high in advanced economies. Many factors contributed to this gap. One affected area was tourism, with international tourism being particularly important in many emerging economies, and hard to replace with increased domestic tourism. The outbound relative to inbound tourism for countries like Sweden and the UK equals a factor of 3 and 2 respectively, while the corresponding in emerging economies is often below 1.

Compared to the 2008 financial crisis, the economic impact over the first five months of the pandemic was at similar aggregate levels, but more unequal across socio-economic groups. For instance, job losses were higher among the young and those with lower income and with less education. Yet, the overall impact in emerging economies was 10% less unequal than in advanced economies due to differences in the structures of economies and the feasibility of working from home.

Fredrik Rågmark, the CEO of Medicover, a healthcare and diagnostics services provider operating in the region in the last 25 years, provided insights from a business perspective.

Similar to Minister Eriksson, Rågmark argued that, for Medicover, the biggest change in the region over recent years has been related to EU integration, and in particular to Poland becoming an EU Member. Rågmark noted that the change was not limited to Poland: all the countries in the region are on a trajectory of change but at different stages. In his mind, the biggest difference between the emerging Eastern Europe and the West is that people have higher expectations about the future in the East.

Rågmark recognized that corruption has been a major challenge for the region in attracting business and investors, but also that it has gotten significantly better in recent years. The EU integration process has been essential there, as membership and continued support relies on institutional reforms to improve governance and ensure political accountability. Recognizing the risk that governments lose incentives to continue reforms once membership is secured (currently exemplified by the policies in Hungary and Poland), Rågmark yet emphasized that the European Union has been extremely successful in improving the business climate in the region and should receive more recognition than it often does.

As for the COVID-19 crisis, Rågmark argued that Plekanovs description was very representative of what he has seen in Eastern Europe. Medicover experienced a drastic falloff in late March when people were not allowed to visit the hospital unless they had acute symptoms. When countries re-opened in the summer, the company had a strong rebound of replaced demand from the lockdown. Also, Medicover has contributed significantly to the testing effort across the region. Due to the challenges associated with the skyrocketing demand for PCR testing, many countries in Eastern Europe that previously only allowed the public sector to treat inpatient COVID-19 cases, have opened up ambulatory services to the private sector. In terms of scaling up testing capacity, the private sector has been very important. Medicover is now a major provider of PCR-testing in Ukraine and Poland, and the single largest provider in Romania.

Economic Policy Responses to the Crisis: Regional Experiences

In this section, experts from the FREE network provided brief overviews of the current situation in their respective countries, as well as the major developments during the year.

Belarus

The Academic Director of BEROC, Kataryna Bornukova, provided an alarming description of recent developments in Belarus. Even before 2020, the prospects of the Belarussian economy did not look great. As relations with Russia started to worsen, the year began with shortages in the oil supply which contributed to GDP contraction already in the first quarter. When the pandemic hit Belarus in the spring the government neglected its severity. Initially, no measures of economic relief were introduced and there are valid suspicions that the official COVID-19 statistics were inaccurate. Eventually, the government created incentives for state-owned companies to keep up output, slowing down the GDP contraction in the second quarter. However, these measures are now a source of financial risk for the whole country as the state has accumulated huge inventories and substantially increased public debt. Unfortunately, during the second wave, policy responses are still lacking and the ongoing political crisis worsens the situation as it hampers economic development through increased uncertainty and lowered public trust.

Poland

As for Poland, Michal Myck, director of CenEA, argued that development during the crises has been mixed both in terms of the pandemic itself and government response.

While infections were at low levels during the first wave in April, they increased sharply during the second wave at the end of October. Similar to Belarus, there have been significant political developments over the year such as the presidential election campaign and the “Women’s Strike”. Myck suggested that these events have complicated a clear strategic response to the virus. During the summer, the government shifted its attention away from preparations for the second wave, towards the July elections. The first wave was met by fiscal and monetary stimulus packages. Although employment and growth have not fallen that much relative to neighboring countries, Myck argued that Poland will be left with a significantly higher level of public debt and other challenges when the pandemic is over. 

Georgia

Giorgi Papava, Center Head at ISET-PI, explained that the Georgian government declared a state of emergency and lockdown in March, despite the low number of infections at the time. From April to June, the economy then experienced a 13% drop in GDP. After the economy re-opened at the end of June, it has shown a slight recovery over the summer. Unfortunately, it was followed by a sharp increase in infections in the autumn. This second wave was not met by similar restrictions until after the elections at the end of November, again suggesting the role of politics in the pandemic response in the region. In terms of economic impact, the most severe blow for Georgia was the sharp decline in tourism affecting many sectors including hospitality and food services, construction, arts, entertainment, and recreation. 

Ukraine

Olena Sholomytska, Senior Researcher at KSE, explained how Ukraine, like most other countries in the region, experienced low reported infection rates in the spring, though high detection rates and low levels of testing may suggest that real infection rates were higher. The summer was followed by a sharp increase in infections and the situation has worsened since then. The economy saw a 7.5% drop in GDP in the second quarter, partly due to a strict lockdown policy, followed by a slight recovery in the third. The Ukrainian government has introduced various monetary and fiscal measures for both households and firms including cash allowances for self-employed, small firms, and people with temporary pay cuts, as well as long-term financing for banks up to 5 years. Currently, the government is reluctant to enforce stricter measures to prevent the second wave of infections mainly for political reasons. Ukrainians are becoming less afraid of the virus and more discontent with the restrictions, so the government is concerned about taking an unpopular decision.

Russia

Natalya Volchkova, Director at CEFIR at NES, explained how Russia, after a relatively calm summer, was hit by the second wave in October as the number of infections and COVID-19 deaths reached their highest levels since the onset of the pandemic. As far as economic performance is concerned, monthly indicators of economic activity show a sharp decline at the beginning of March and a slight recovery since then. However, when looking at month-on-month comparisons, economic performance is significantly lower in every month throughout 2020 compared to 2019.

The support measures introduced during the spring and summer constituted 3.7% of GDP. While most stimulus was allocated to the corporate sector (2.1%) households also received a significant amount of support (1.6%). The measures targeted to help household income included: cash transfers to families with children; increased unemployment benefits; 2019 tax-return for self-employed; extra payments to medical specialists; and credit restructuring and penalty-free payment deferrals for COVID-19 infected. The support dedicated to the business sector included: tax and credit payment deferrals; bankruptcy moratorium for 6 months; reduction in property tax: and subsidies to backbone enterprises. The support measures are expected to increase GDP growth by 1.8 percentage points by boosting household consumption, corporate inventory, and investments.

Latvia

Sergej Gubin, Research Fellow at BICEPS, described the epidemiological impact of the pandemic in the spring as hardly noticeable in Latvia. Although, the country currently has the 3rd lowest COVID-19 mortality rate in the EU, infections and mortality have increased quite dramatically during the fall.

While the restrictions introduced in the spring did not include a strict lockdown or a mandatory mask policy, the government closed borders, schools, and kindergartens. Following the second wave, the restrictions adjusted to including a mask policy, open borders, and 5-12 graders on distance learning.

The economic policy response has included downtime benefits for employees of firms with a reduction in turnover of 30% or more, temporary tax reliefs, and sick leave benefits for parents with young children on distance learning. The drop in GDP for 2020 is projected to be 7% and unemployment is expected to increase by 7.7%.

The Implications of the Pandemic for Gender Inequality

It is widely known that the pandemic has had catastrophic consequences for health and economic activity. Many experts, though, have also expressed concerns about its impact on gender equality and the welfare of women. On the health side, men and women have been shown to be equally susceptible to infection, however among those that get infected women have significantly lower mortality rates than men. Monika Oczkowska, Senior Researcher at CenEA, showed that about 40 % of deaths in Poland were women, which is very similar to Western European countries, whereas excess mortality has been particularly high among men in older age groups.

The pandemic has also impacted gender inequality through the labor market. In countries like Ukraine and Georgia, the pandemic has significantly worsened pre-existing inequalities. In the latter, the number of registered unemployed increased by 16 000 in the second quarter, and among them, 90% were women, according to Yaroslava Babych, Policy Center Head at ISET-PI. Also, among the 44 000 workers that lost their employment during lockdown in the spring a vast majority were women. Partly, the reason for this is that the restrictions affected sectors that were predominantly female such as restaurants, cafés, and retail, as well as arts and entertainment.

In Belarus, a country with relatively high female labor force participation, the impact on gender inequality changed over time. In the Belarussian labor market, women are highly concentrated in the hospitality and public sector, and men in the industrial sector. After the first wave in the spring, women were worst affected, both in terms of unemployment and loss of income, which was largely driven by the impact on the hospitality industry. Over time men became more affected as the industrial sector took a hit, whereas women benefitted from steady employment within the public sector. The gender distribution in the Ukrainian labor market is similar to the Belarusian. Women are concentrated in sectors that are economically vulnerable to the crisis but also in those that are critical for everyday life such as the health and education sectors. In other words, in these countries some women are at high risk of losing their job while others, that are less at risk of an economic shock, often are particularly likely to be exposed to health shocks.

From a more positive perspective, the crisis has also brought about structural changes to the labor market that could potentially improve gender equality. In Russia, workplaces have started to provide more flexible working conditions which have enabled more women to work remotely from home.

One serious consequence of the crises is an increase in domestic violence as the pandemic has exacerbated things that are known to increase conflict and violence within households. Maria Perrotta Berlin, Assistant professor at SITE, argued that mobility restrictions have increased the time spent with family members, increased isolation from social networks and support organizations, and increased stress caused by economic insecurity. According to the international ombudsman of Russia, the number of distress calls relating to intimate partner violence has increased by 150% during the pandemic, compared to an estimated average increase of 60% in Europe during the same time.

Political Implications in the Region with a Special Focus on Belarus and Russia

The final section of the day focused on political developments in Russia and Belarus in the times of the COVID-19 pandemic, two countries with close historical, political and economic ties. SITE invited two experts on the politics in respective countries: Elena Panfilova, Founder of the Center for Anti-corruption Research and former Chair of Initiative Transparency International – Russia, and Artyom Shraibman, founder of Sense Analytics, a political consultancy in Minsk and nonresident scholar at the Carnegie Moscow Center.

Panfilova gave a comprehensive narrative of the recent political developments in Russia related to the onset of the pandemic. Panfilova argued that the political response to the pandemic in Russia changed over time. In the spring, the government and political elites had a relatively active response and clear communication with the public. However, when the second wave started in September the government largely stayed silent. According to Panfilova, the reason for this is that Russian politicians started to anticipate the important 2021 regional elections and that they found it hard to communicate with the public without challenging their future political interests as the crisis response had been met with much discontent. This discontent, Panfilova argued, had to do with Russia’s vertical system of accountability being very ineffective in dealing with a horizontal problem such as COVID-19. The response system would have needed help across the political spectrum and would have benefited from more transparency to fight the pandemic; instead, the government continued to restrict political freedom and civil rights.

Reacting to the introduction by Panfilova, Shraibman argued that there is no historic example of a situation where the response to similar situations have differed so much between the Belarusian and Russian governments. The Belarusian regime’s response, in contrast to the Russian, was close to non-existent in the first wave and this continued up until the autumn when the government started to introduce restrictions in response to the second wave of infections.

The pressure of the pandemic has revealed the weaknesses and flaws of governments around the world and not least in Belarus. Although there are several reasons for the political crisis such as the stagnation of the Belarus economy, Shraibman argued that the mismanagement of the pandemic became the tipping point.

Shraibman explained how the Belarus regime has always tried to sell a paternalistic identity and has presented itself as a stable and fair welfare system that cares for the poor and the vulnerable. The mishandling of the COVID-19 pandemic shattered this identity in the eyes of the public. The rhetoric and state-level deception during the first wave irritated a lot of people as the state-owned media outlets often accused the sick of being weak and ridiculed people for wearing masks. As many Belarusians saw relatives die and doctors started to contradict the narrative of the state, people were reminded of the Soviet government’s concealment of the Chernobyl disaster.

These developments created stress on the Belarusian society right before the presidential elections in August since the frustration that had been accumulated was channeled into political activity. During the pandemic, people learned how to organize and coordinate crowdfunding initiatives to support doctors and similar initiatives. This self-organization infrastructure transferred to the opposition campaign and is now used to support victims of political repression.

During the second wave, the government started exploiting the crisis to restrict political freedom. For instance, independent observers were not allowed to observe electoral polls, and political prisoners were not allowed to meet with lawyers. These and similar actions have further aggravated the political discontent with the regime in the country. Shraibman concluded that groups in society that previously have been apolitical now have become politicized, as they have personally experienced the repressive measures previously targeted primarily to the Belarusian opposition.

Concluding Remarks

As in previous years, the Development Day conference offered us an opportunity to invite a diverse group of experts, politicians, and practitioners to discuss a current and important topic in the area of development and transition. The different perspectives highlighted the multifaceted impact of the COVID-19 pandemic on Eastern Europe, as well as the continued engagement of Swedish society in the region. Unfortunately, the pandemic also prevented us from meeting in person this time, but we hope that next year we will be able to meet again at the Stockholm School of Economics.  

List of Participants

  • Peter Eriksson, Minister for International Development Cooperation, Sweden.
  • Alexander Plekhanov, director for Transition Impact and Global Economics, EBRD.
  • Fredrik Rågmark, CEO Medicover, Sweden.
  • Kataryna Bornukova, Academic Director BEROC, Minsk, Belarus.
  • Michal Myck, Director CenEA, Szczecin Poland.
  • Giorgi Papava, Center Head at ISET-PI, Tbilisi, Georgia.
  • Olena Sholomytska, Senior Researcher KSE, Kyiv, Ukraine.
  • Natalya Volchkova, Director CEFOR at NES, Moscow, Russia.
  • Sergej Gubin, Research Fellow BICEPS, Riga, Latvia.
  • Lev Lvovskiy, Research Fellow BEROC, Minsk, Belarus.
  • Monika Oczkowska, Senior Research Economist CenEA, Szczecin, Poland.
  • Yaroslava Babych, Head of Macroeconomic Policy Research Center ISET-PI, Tbilisi, Georgia.
  • Aleksandr Grigoryan, Associate Professor American University of Armenia, Yerevan, Armenia.
  • Olga Kupets, Policy Professor KSE, Kyiv, Ukraine.
  • Maria Perrotta Berlin, Assistant Professor SITE, Stockholm, Sweden.
  • Artyom Shraibman, founder of Sense Analytics and nonresident scholar at the Carnegie Moscow Center.
  • Elena Panfilova, Founder of the Center for Anti-corruption Research and former Chair of Initiative Transparency International – Russia.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Circular Economy in Belarus: What Hinders the Transformation?

Posted on December 14, 2020 | Policy Brief

20201214 Circular Economy in Belarus FREE Network Policy Brief Image 02

The transition towards a circular economy has accelerated in response to increasing environmental challenges and the need for more sustainable and cleaner production. Many countries are mainstreaming a circular economy into their policy agenda. In particular, the European Commission’s new Circular Economy Action Plan, adopted in March 2020, will be a key element of the EU Industrial strategy. In Belarus, similar policy agendas that promote circular economy have not been developed yet, however, this concept is now attracting increasingly more attention. Therefore, it is essential to identify barriers that hamper the implementation of circular economy business practices in the country. This policy brief presents the results of a survey that studied 452 Belarusian companies and their prospects and opportunities of circular transformation both within enterprises and at the national level. The findings show that high levels of capital and technology spending and lack of state-provided economic incentives are the most pressing barriers to circular economy development in Belarus. When it comes to enterprises’ own prospects for circular transformation, lack of funding is ranked as the main impediment.

Barriers to Circular Economy Development in Belarus

Despite the fact that there has been an increased interest in the circular economy, evidence suggests that its implementation has been hampered by a variety of barriers. Based on academic literature and business case studies, these barriers can be categorized into several groups (Rizos, et al., 2015; Rizos, et al., 2016; Kirchherr et al., 2018; Ritzén and Sandström, 2017):

  • Cultural barriers (e.g. social, behavioral, and managerial) – a lack of interest, environmental awareness, and/or existing differences in personal values, which hinder the development of a circular economy.
  • Information constraints – a lack of consumer and producer awareness about the key principles and best practices of circular economy implementation;
  • Inadequate regulatory environment – a lack of consistent legal framework, policy support, and incentives for circular economy transition (e.g., through tax relief, fiscal measures, or public procurement);
  • Technological barriers – an absence of a well-managed logistic infrastructure for the collection, extraction, and processing of secondary raw materials (SRM); the lack of standardization and, as a result, lower quality of goods produced from SRM; the absence of knowledge on how circularity can be implemented in a particular industry;
  • Economic impediments – barriers to circular economy transition that are due to low prices for primary raw materials and high investment costs for the implementation of circular business models, as well as lack of funding and restricted access to finance.

This categorization served as the basis for the development of our questionnaire. We surveyed enterprises on the prospects and opportunities relating to their own circular transformation as well as factors constraining the more general development of a circular economy in Belarus. The survey was conducted in 2020 by BEROC and IBB Dortmund and included 452 companies from the Belarusian regions of Brest and Mogilev. The results show that businesses view economic, regulatory, and informational barriers as the most hindering to a circular transformation of Belarus. In particular, the respondents stated that the main impediments are high levels of capital and technology spending (62.8% of respondents), as well as lack of state-provided economic incentives (50.4%). Information constraints are also important as enterprises are not aware of circular technologies and believe that they do not exist (50.4%). Furthermore, there is a lack of knowledge on how to implement circularity in their industry (33.8%) (see Figure 1).

Figure 1. Barriers to circular economy development in Belarus, % of respondents

Source: Figure compiled by the authors based on the survey results.

Respondents also identified barriers that hamper a shift of their own enterprise – rather than that of the entire Belarusian economy – from a linear to a circular business model. According to the survey, the lack of funding is considered as the main barrier to circular transformation among Belarusian companies, as 83.5% of respondents characterized its impact as high or medium. This impediment is followed by the absence of circular technologies that can be applied at the surveyed enterprise (64.9%) and the lack of information and best practice examples with regard to the implementation of circular business models (62.4%). Half of the respondents also indicated that the shift from a linear economy is hampered by the lack of consulting on how to implement circularity (see Figure 2).

Figure 2. Barriers to the circular transformation of the Belarusian enterprises, % respondents

Source: Figure compiled by the authors on the basis of the survey results.

Enterprises identified specific technical challenges associated with possible supply chain constraints. In particular, 40% of respondents raised concerns about the absence of an online database on waste and secondary raw materials, and 39.3% of them worried about possible interruptions in the supply of secondary raw materials.

Stimulus for Circular Transformation in Belarus

Respondents also expressed their views on potential stimulus measures that could be implemented to encourage a transition towards a circular economy in Belarus. Tailored support programs (83.9%), tax incentives (78.5%), and development of infrastructure for the processing of secondary raw materials (76.4%) were identified as the strongest motivators for enterprises’ decision to opt for a circular business model. Other important measures listed by the respondents were revisions of the legislative framework to prioritize the use of secondary raw materials, prevent waste generation, etc. (67.4%) as well as access to consulting on how to implement circularity in a business (62.8%) (Figure 3).

Figure 3. Stimulus for the circular economy development in Belarus, % of respondents

Source: Figure compiled by the authors on the basis of the survey results.

Surveyed enterprises stated that they had already incorporated some circular economy elements in their business model. More than 35% of respondents have used recycled materials in the production process, 19% have recycled products in the production of new materials or products, and around 19% have reused products or embedded raw materials. Moreover, more than 35% of enterprises would be ready to introduce reusage and recycling in their business within the next three years. However, they emphasized that existing regulations should be revised, and economic incentives provided in order to encourage these efforts.

Conclusion

The results confirm that Belarus has potential for circular economy development. Yet, its implementation might be hampered by economic, regulatory, informational, and technological barriers. In particular, the surveyed enterprises stated that high upfront costs, e.g., for technology and equipment, as well as the lack of state economic incentives, are the most pressing impediments to the circular transformation of Belarus. At the company level, lack of funding is seen as the main obstacle in shifting from a linear to a circular business model. Another important barrier is lack of information, as enterprises are not aware of circular technologies and best practice examples.

The results of our survey suggest that, in order to encourage a transition towards a circular economy in Belarus, a tailored support program should be developed, existing regulations revised, and economic incentives provided. The transition will not be possible without mainstreaming a circular economy into Belarus’ policy agenda.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

The Role of Partnerships in Economic Reforms of Fragile States: Perspectives from Somalia | Summary

Posted on November 30, 2020 | Policy Brief

Image of balancing stones representing Somalia as a fragile state and its reforms

Fragile states are particularly vulnerable to adverse economic shocks and in need of international support. Through constructive collaboration with international partners, however, fragile state governments can successfully pursue ambitious reform agendas for the short and long run. SITE and MISUM (Mistra Center for Sustainable Markets) invited the Minister of Finance of the Federal Republic of Somalia, Dr. Abdirahman Dualeh Beileh, and the Swedish ambassador to Somalia, Staffan Tillander, to discuss the role of international partnership in the recent development of economic reforms in Somalia. This policy brief provides a summary of the key points that were discussed in the webinar.

Introduction

Fragile states, characterized by poverty, weak governance, and conflict, now also have to confront additional challenges from the COVID-19 pandemic. Negative economic shocks arising from climate change, financial crises, conflicts, and pandemics are known to be particularly detrimental for these countries as the countries lack the resources to cushion the negative impact and are vulnerable to anything exacerbating latent socioeconomic challenges and conflicts. 

In these situations, international support becomes essential in reducing the immediate impact on human welfare and help sustain economic reforms that are necessary for long-run development. Somalia is a good case in point, where the recent consolidation of the country and an ambitious reform agenda together with international partners have set the country on a positive trajectory. This progress is challenged, though, by the pandemic, reinforced by drought and locust swarms.

From Independence to Civil War

Despite Somalia’s economically favorable geographical location and abundance of resources, the country has a turbulent history plagued by poverty, conflict, and humanitarian crises. Dr. Beileh provided thoughts on why the country failed to realize these opportunities and what factors led up to the civil war in 1991.

Following Somali independence in 1960, the country was lacking a sufficient level of educated citizens to run a modern government. In addition, tensions with neighboring countries and community demarcations within Somalia led to conflict and a constant struggle over resources. Also, Dr. Beileh argued that the former colonial powers had an interest in keeping the newly independent African states economically reliant in terms of imports of goods and sourcing of raw materials.

Dr. Beileh suggested that the combination of these factors contributed to the fall of the military regime in 1991 whereby Somalia plunged into civil war. With no recognized government over the following 20 years, this power vacuum became a black spot in Somalia’s history, characterized by war and poverty.

Political Consolidation and Debt Relief

After decades of suffering, in 2012 the Provisional Constitution established a federal political structure, with a parliament and the Federal Government of Somalia. Meanwhile, African Union forces liberated the major cities of Somalia from the terror of Al Shabab. In 2013 the government re-engaged with the World Bank and the IMF, and since 2016 the government together with international partners has engaged in numerous structural reforms. The main objective of the reform agenda was to qualify for international debt relief through the Heavily Indebted Poor Country (HIPC) Initiative introduced by the IMF and the World Bank in 1996 to reduce debt levels to sustainable levels in the world’s poorest countries. In Somalia’s case, this required laws and regulations that strengthened rule of law and sustainable economic management as well as poverty reduction strategies.

In March 2020, Somalia became the 37th country to qualify for the first step of debt relief under the HIPC initiative (“the decision point “) which meant that the country’s national debt was significantly reduced. This successful result was commended by the international community and Dr. Beileh stressed that it would not have been achieved without both international partnership and the resilience of the Somali people. Now, with continued successful reforms Somalia is projected to receive further debt reduction in 2023 (“the completion point”).  

Structural Reforms

Besides significantly reducing the national debt, the HIPC program requirements have led to development in many areas and opened new possibilities for international cooperation.

Laws and regulations that institutionalize the rule of governance and strengthen the federal system are essential HIPC prerequisites. Both Dr. Beileh and Ambassador Tillander stressed that strong governance is not only important for a clear division of tasks and competent and honest conduct within government bodies, but also an important cross-cutting issue that influences the ability of the state to achieve other goals.  Dr. Beileh described how far Somalia has come in this regard. When he started at the ministry of finance in 2017, wages, responsibilities, and accountability were up for negotiation. Today, there are rules and regulations in place that guide the responsibilities and accountability of civil servants. For instance, a public procurement authority has been established with the task of scrutinizing all government procurement and disposal of assets. Ambassador Tillander added that the strained regional tensions caused by the civil war and surrounding conflicts have been eased and the improvements in governance have led to a more constructive dialogue between the federal government and the member states.

Drawing on his experience as minister of finance, Dr. Beileh gave insight into the path of economic reform brought about by the HIPC process. The reforms focused on raising domestic revenue to achieve fiscal sustainability, keeping public expenditures at a sustainable level, and promoting various financial sector reforms. Dr. Beileh discussed the challenges related to gaining popular support for some of these reforms implemented in recent years. It is well known that economic reforms that are beneficial in the long-run often entail short-run costs which make them politically difficult to implement. To regain trust of taxpayers is of particular importance for Somalia given the need to increase domestic fiscal revenues.  Efforts have been made to actively inform the public about government activity and spending in order to increase transparency and convince Somalis that they will benefit from the system.

Ambassador Tillander provided examples of how countries like Sweden can help promote democracy and human rights in Somalia. For instance, Sweden has been working closely with the Somali government to help organize elections and increase voting participation, particularly for politically marginalized groups such as women and young adults.

Looking Forward

Despite Somalia’s recent success with debt forgiveness, both speakers acknowledged that much remains to be done.

The value of high-quality educational institutions and long-term investments in human capital is crucial in Dr. Beileh’s view. Having an educated population gives a country not only the skills and knowledge required to run a government but also helps a diverse society to move in the same direction. Although the need for infrastructure and investments in other areas is crucial for economic development, he insisted that it is educated people who in the end bring wealth, build infrastructure, and run governments.

Ambassador Tillander advocated for further promoting inclusion and merit-based selection in politics and business. He argued that progress is not possible if half of the population are excluded based on gender or age. Also, Somalia needs to move away from the clan as a basis for political power and position. As part of the solution, Ambassador Tillander suggested that Somalia should replace its provisional constitution with a new one that more strongly enshrines democratic elections, human rights, media freedom, and freedom of expression.

Although both speakers recognized that the reforms have been necessary, they mentioned that some reforms have also led to unintended negative consequences. For example, regulations to curb money-laundering and anti-terrorism financing have restricted the ability to transfer money to and from Somalia. As a result, many organizations and NGOs have found it hard to access financing, and it has made it hard for the diaspora to send remittances. To solve this issue, Dr. Beileh suggested policies that would improve the transparency of money flows, focusing on creating a personal id system and on strengthening the domestic financial institutions.

Another central topic at the webinar related to how Somalia and its partners should encourage and facilitate investments beyond foreign aid. Ambassador Tillander explained how there is an international misperception of Somalia and that his visit to the Mogadishu tech forum in 2019 was an eye-opener for him in this regard. These types of high-profile events, organized to attract foreign investments and display the opportunities that exist within Somalia, have attracted numerous young entrepreneurs who interact with their foreign counterparts, and showcase a dynamic and growing Somali business sector which is generally ignored in media-depictions of the country. In the context of the Swedish-Somali partnership, Ambassador Tillander suggested that there are enormous unexplored cross-border business opportunities between the countries, where the Somali diaspora in Sweden could play an important role.

Both speakers suggested that the foundations for communication and exchange are already in place. At this stage, the key to increase private investment is to reduce uncertainty for entrepreneurs and improve the predictability of the Somali financial system. People need to have better access to credit and financing, the banking system needs to become more formal, and the rule of law needs to apply more widely than it does today. Thanks to the HIPC process and the Somali government, steps in this direction are already underway but they must continue in order to build faith in the system, so that entrepreneurs, investors, and innovators are willing to take on the risks that new investments typically entail.

Reflecting on the start of the HIPC process, Ambassador Tillander argued that few people had anticipated the extent of progress that Somalia has achieved in only 4 years. Concluding the event, Ambassador Tillander and Dr. Beileh agreed that the cooperation between Somalia and the international community has been instrumental in encouraging and driving a reform process that would have been extremely difficult otherwise.

 

Speakers at the Event

  • Dr. Abdirahman Dualeh Beileh, Minister of Finance of the Federal Republic of Somalia.
  • Dr. Staffan Tillander, Swedish ambassador to Somalia.
  • Dr. Anders Olofsgård, Deputy Director SITE (moderator)

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Economic Perspectives on Domestic Violence | Insights from the FROGEE Webinar | Part 2

Posted on November 23, 2020 | Policy Brief

A view of a window with broken glass representing representing perspectives of domestic violence

This policy brief is the second in a series of two briefs summarizing the research presented at the online workshop “Economic Perspectives on Domestic Violence”, organized as part of the Forum for Research on Gender Economics (FROGEE). The current brief offers an overview of the presentations that specifically studied the implications of the Covid-19 crisis for domestic violence. The remaining research  presented at the workshop is addressed in the first policy brief of this series.

Introduction

As governments around the globe are continuing to enforce contagion management strategies to limit the spread of COVID-19, many experts are voicing their concerns about a different kind of pandemic.  Alarming reports have surfaced from a wide range of countries suggesting significant increases in domestic violence (DV), including one of its most prevalent forms – intimate partner violence (IPV).

In Europe, the number of IPV emergency calls has increased by 60%, according to the UN’s regional director of Europe (WHO, May 07, 2020). In the Hubei province of China, a police department reported three times as many DV cases in February 2020 compared to the same month in 2019 (Axios, March 2020). In El Salvador, 95% of local and government DV support services closed due to the pandemic, while reports show that the demand for such services among women increased by 70% (IRC, 2020). Reduced social interaction and mobility, high rates of unemployment, and restricted access to support services are just some indirect consequences of the pandemic that are likely to exacerbate DV.

At the same time, data from other countries have suggested the opposite trends. In the Italian region of Lombardy, the number of women requesting support services decreased, although the region was one of the most severely hit by the pandemic (Giussy et.al., 2020). While DV hotlines in the US anticipated increases in calls for support, some regions experienced a 50% decline (The Guardian, April 2020). Many have stressed that these trends have a much darker side – underreporting. Measures aimed at limiting the spread of COVID-19, as well as the fear of getting infected, force victims to stay at home in direct contact with their abusive partner, limiting their ability to report on the violence, and restricting access to support services such as women’s shelters.

As much as pandemic-related trends in DV have heightened the concerns about the well-being of victims and increased the need for sufficient and adequate policies, the unique settings created by the pandemic have offered new opportunities for researchers to better understand the underlying causes of DV.

This policy brief is the second in a series of two briefs summarizing the papers presented in the workshop entitled “Economic Perspectives on Domestic Violence”. The workshop was organized as a part of the Forum for Research on Gender Economics (FROGEE) supported by the Swedish International Development Cooperation Agency (SIDA).

Domestic Violence and COVID-19

While studying different research settings, all the papers summarized in this brief examine the relationship between COVID-19 and DV. Most of them are focused on the effects of lockdown measures and highlight the need of combining measurements of DV in order to get an encompassing picture of the phenomenon.

Damian Clarke presented evidence on the DV-implications of quarantine in Chile. To rule out the possibility that an increase in DV was caused by other factors brought about by the pandemic, Clarke and co-authors take advantage of Chile’s rolling quarantines (i.e., regional quarantines implemented at different points in time) and compare municipalities that imposed lockdowns with those that did not.  At the start of the pandemic in March, the nation-wide number of calls to domestic violence hotlines increased by 250%, and by 350% for municipalities that imposed quarantines. Police reporting on DV decreased by 11% nation-wide, and by around 27% in quarantined areas. The sharp increase in distress calls may have several explanations. It could be due to an increase in instances of DV and/or increased anxiety, or reduced tolerance. Moreover, the decline in DV reporting to the police may be explained by limited access to DV support services during quarantine, or to the fact that the victim’s opportunity to report is constrained by the abuser’s presence at home.  The authors are exploring these channels in current work, including the implementation of a nationally representative survey, aiming to identify key determinants of observed patterns, as well as how they may evolve with the removal of quarantines.

Melissa Spencer offered an analysis of the pandemic’s impact on domestic abuse in Los Angeles, US. Spencer and co-authors investigate the immediate effect of the pandemic by using data on DV incidents and arrests, DV calls for service, and hotline calls. During the initial lockdown in March, they find significant effects on both crimes and calls, but in opposite direction: calls for service and hotline calls increased while DV crime and arrests for those crimes declined. During the re-opening period at the end of May, both DV crimes and arrests, calls for service and hotline calls decreased.

Ria Ivandic presented findings from a study on the pandemic´s effect on DV in the Greater London area. Using data on DV calls for service and DV crime/incidents the study shows that, for service calls, there was a 35% increase in third-party reporting in densely populated areas, whereas in low-density areas there was only a 15% increase. This effect was particularly strong in areas of high deprivation and suggests substantial under-reporting in households where abuse cannot be reported by an outsider. As for DV crimes, the study finds an average increase of 4.5% during the lockdown and a significant shift in abuse composition: current partner abuse crimes increased by 8.5%, DV by family members rose by 16.4%, while ex-partner crimes decreased by about 9.4%.

Much like England, the US, or Chile, most countries around the world adopted some kind of lockdown policy to mitigate the spread of COVID-19, but how would the pandemic affect DV in the absence of lockdown, if at all? Maria Perrotta Berlin presented her findings on the case of Sweden, a country that has had a significantly softer policy response to the pandemic. By utilizing data on DV-crime and mobility, the preliminary results show that the pandemic reduced individuals’ mobility, even in the absence of a formal lockdown. Further, Berlin finds that an increased presence in residential areas is associated with a significant increase in non-battery crimes committed by an intimate partner, whereas a reduction in mobility in retail and recreation areas is associated with an increase in other crimes.  A more detailed summary of this research is presented in a recent FREE policy brief.

The workshop has offered insights into a problem that has been in urgent need of effective policies for a long time, and that has attracted renewed attention during the pandemic. Not surprisingly, it has created a large interest among the participants. FROGEE and SITE would like to thank the speakers for their contributions to the workshop and SIDA for their generous funding.

References

  • Allen-Ebrahimian, Bethany. “China’s Coronavirus Quarantines Raise Domestic Violence Fears.” Axios, 7 Mar. 2020, www.axios.com/china-domestic-violence-coronavirus-quarantine-7b00c3ba-35bc-4d16-afdd-b76ecfb28882.html.
  • Giussy, Barbara, et al. “Covid-19, lockdown, and intimate partner violence: some data from an Italian service and suggestions for future approaches.” Journal of Women’s Health (2020).
  • Graham-Harrison, Emma, et al. “Lockdowns around the World Bring Rise in Domestic Violence.” The Guardian, Guardian News and Media, 28 Mar. 2020, www.theguardian.com/society/2020/mar/28/lockdowns-world-rise-domestic-violence.
  • International Rescue Service, 2020. The Essentials for Responding to Violence Against Women and Girls During and  After COVID-19.
  • World Health Organization, Europe, 2020. WHO Warns Of Surge Of Domestic Violence As COVID-19 Cases Decrease In Europe.

List of participants

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Food Security in Times of Pandemic in Georgia

Posted on November 16, 2020 | Policy Brief

An image of the wheat field with with grain harvester representing food security

The lockdowns and trade restrictions related to the COVID-19 pandemic resulted in shortages of some major food commodities on international and local markets. In this policy brief, we discuss and analyze Georgia’s response to the crisis in terms of food security and agricultural policy. Furthermore, we provide recommendations to ensure fewer disruptions in food supply chains and low volatility in food prices.

Background

COVID-19 has posed significant risks to the food security of many countries including Georgia. Lockdowns and pandemic-related trade restrictions across the world have resulted in shortages of some major food commodities on international and local markets (e.g. sunflower oil shortage in Russia). As of October 16, 2020, according to a World Bank report, 62 jurisdictions have executed a total of 62 export controls in food commodities since the beginning of 2020 (Table 1).

Table 1. Total number of new export controls and import reforms in the food sector globally since January 2020, by month.

Source: World Bank Group, Global Alert Team, 2020

Most of the interventions have involved import reforms with the largest number of new regulations imposed in March-April.  On August 18, 2020, the Eurasian Economic Commission announced an EAEU import tariff quota on certain agricultural goods, valid for 2021. Turkey has also conducted a price stabilization policy by announcing purchasing prices for apricots, paddy, and dried raisin. On August 5, 2020, the government of Turkey introduced additional customs duties on certain agricultural products including chocolate, pasta, and some food preparations. It also eliminated import duties on wheat and barley in October.

Given that Georgia is a net importer of food, and in light of the trade restrictions imposed by its major trade partners, food security moved up on Georgia’s agricultural policy agenda. In order to weaken the adverse impact of the pandemic, keep food prices stable, and reduce input prices for farmers, the state designed the following set of measures:

  • 10M Georgian lari (GEL) from the Ministry of Environmental Protection and Agriculture (MEPA) budget were allocated to subsidize imports of 9 food products: pasta, buckwheat, vegetable oil, sugar, wheat, wheat flour, milk powder, and beans (Legislative Herald of Georgia, 2020). The program subsidized importers’ additional costs resulting from exchange rate fluctuations and was implemented between March 15-May 15;
  • Additional 16M GEL were allocated for purchasing sugar (5,000 tons), vegetable oil (1,500 thousand liters), and pasta (500 tons) stocks from private companies;
  • An anti-crisis plan, “Caring for Farmers and Agriculture”, was presented by the state on March 12. The plan entailed two forms of aid: direct assistance to farmers and sectoral support. Some of the support measures included the distribution of so-called “agricultural cards”– subsidies for cattle-breeding and land cultivation services for smallholder farmers (registered farms with plots in the range of 0.25-10 ha); provision of cheap diesel fuel for farmers; nullification of costs of land reclamation services; provision of agricultural loans and insurance; grants for machinery, equipment, and cooperatives.

Results of Government Interventions

As of October 9, 2020, state support schemes had the following results:

  • Up to 165,000 farmers had been granted agricultural cards. The size of the subsidy exceeded 28.9M GEL;
  • Under the agro-diesel program (which subsidized fuel prices for agro-producers) 122,000 beneficiaries received discount cards on 32,000 tons of agro-diesel;
  • More than 17,000 policies had been issued and 18,000 hectares (around 2% of agricultural land) had been insured under the agro-insurance program. The value of the insured crop exceeded 160M GEL;
  • Across different regions of Georgia, 255 applications for modernization of the dairy sector were approved. In total, 12.4M GEL were spent on this program;
  • 2,215 agro-loans had been issued with a 6-month interest rate covered by the state. The total amount of loans exceeded 40M GEL, including the co-financing of interest rates, which exceeded 3.3M GEL.

While many farmers have benefited from state support programs, these programs were not directly focused on the main consequences of the pandemic. The major threats posed by the pandemic – disruptions in food supply chains leading to decreased sales of agricultural products and price volatility – were not sufficiently addressed by the state support programs. According to the Georgian Farmers’ Association (GFA), 55% of surveyed farmers and agricultural business representatives encountered complications with product realization due to pandemic-related restrictions. Most farmers depend on the HoReCa (hotels, restaurants, and cafés) and hospitality sector, and their products are largely procured for accommodation and food facilities. 60% of those surveyed claimed that they were simply unable to sell their products due to the closure of hotels, restaurants, and cafés.

Food Price Dynamics

During March-May 2020 – the first months of the pandemic – food prices in Georgia showed upward trends on both a month-on-month and year-on-year basis (Figure 1).

Figure 1. Month-on-month and year-on-year changes in food prices

Source: GeoStat, 2020

The main explanation is likely the depreciation of the GEL against the US dollar: during March-May 2020, the GEL depreciated against the USD by 15.8% from 2.71 to 3.14 compared to March-May 2019 (National Bank of Georgia, 2020). As Georgia is a net importer of food commodities, the depreciation of the GEL put upward pressure on food prices. To limit the GEL depreciation and its impact on food prices, the Government of Georgia subsidized additional costs of importers of major food commodities arising from exchange rate fluctuations. The price restraint mechanism involved negotiating with food importers to not increase prices of their commodities and setting the exchange rate of the GEL against the USD at 3, while the Government of Georgia subsidized the corresponding difference between the actual and fixed exchange rates. Despite minimizing the effects of GEL depreciation, food prices in Georgia experienced a significant increase during the observed period: disruptions in supply chains associated with the COVID-19 pandemic led to food shortages that further increased food prices.

In April, annual food price inflation marked its highest level at 16.1% during March-August 2020.  Since then, annual food price inflation has been decreasing as farming activities resumed after COVID-19-related restrictions were relaxed and seasonal (locally produced) agricultural products appeared on the market. Accordingly, food prices started to decrease on a monthly basis.

However, with very few exceptions, prices for major food commodities that were subsidized by the state during March-May increased for both month-over-month and year-on-year comparison (Table 2). On a monthly basis, the biggest price changes were observed for sugar; while on annual basis prices for buckwheat increased the most.

Table 2. Year-on-year changes in prices of major food commodities, March-September 2020

Source: GeoStat, 2020

While food prices could have increased even more in the absence of subsidies, it appears that the state measures did not fully reach their objectives and could not fully overshadow the adverse impact of the pandemic and GEL depreciation.

Recommendations

The pandemic has shown the need for increasing the level of food security in Georgia. Given the multidimensional nature of food security, a longer-term policy should consider not only an increase in domestic production of key food commodities but also a diversification of import markets to ensure low volatility in food supply and prices. As an immediate response to the pandemic, it is recommended to:

  • further subsidize farm inputs in order to reduce the current costs of production;
  • support farmers in selling their produce;
  • develop state programs that strengthen local producers;
  • focus on diversification of import markets for food commodities which constitute a high share of households’ consumption basket.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Do Condominiums Pay Less for Heating?

Posted on November 1, 2020 | Policy Brief

Kiev in snow during. the winter with condominiums under heating

In Ukraine, a widely shared perception is that housing utility costs are too high. In this policy brief, we study if these costs can be alleviated by introducing a modern form of housing management practice, condominiums. We find that condominiums in old houses (built before 1991) pay 22% less for heating compared to old non-condominiums. Among new houses (built after 1991), we find that condominiums pay 29% less for heating.  Considering the dynamics of condominium formation in 2018-2020, old houses do not show any significant immediate effect of condominium formation on heating costs relative to that of non-condominiums. However, condominium formation among new houses leads to a relative 18% decrease in heating costs. In addition, among condominiums in old houses, participation in an overhaul co-financing program is associated with a 15% lower heating bill. The immediate effect of the program in 2018-2020 is a 16% relative decrease in heating costs for old condominiums and 37% – for new ones.

Heating Costs and Condominiums

In recent years, the cost of housing utilities has been a common concern among Ukrainians. According to a recent survey, 80% of Ukrainians believe that tariffs on utilities are too high.

The form of housing management is a factor that could affect utility costs. Experiences from Slovakia, Hungary, Poland, and Romania in the 1990s suggest that state-owned housing maintenance companies are often associated with inefficient management. Residential buildings that are owned and managed collectively by its dwellers (hereafter referred to as condominiums) are more likely to choose a more efficient private housing maintenance company (Banks, O’Leary et. al., 1996). For instance, in Slovakia’s second-largest city, Kosice, one-third of houses that were privatized in the 1990s chose private maintenance companies with competitive prices. Residents perceived the services as “far more effective” (ibid).

This brief summarizes our analysis of the relationship between heating costs and the form of housing management in Ukraine. Analyzing a large sample of houses in Kyiv, we show that condominiums are associated with lower heating costs, both among the older houses, built before Ukrainian independence in 1991, and among newer houses.

Types of Housing Management Practices in Ukraine

The different housing management practices in Ukraine can be roughly divided into three types. The most commonly used practice is when housing maintenance is carried out by a municipally owned company (commonly referred to as ZhEK – “zhilischno-eksplotazionnaja kontora”, housing maintenance office). Usually, houses that have the ZhEK-type management were built before Ukrainian independence and have kept this practice since Soviet times. The second practice is when housing maintenance is done by a private company affiliated with the building developer. This management type is usually used by houses built after Ukrainian independence that did not form condominiums. These two practices are similar in the sense that dwellers are not directly involved in the decision-making, all decisions are made by the municipal or private company, respectively.

The third type of housing management practice, relatively new for Ukraine, is condominium ownership (the Ukrainian term for it is ОСББ, translated as “Association of Co-owners of Multi-Apartment House”). In a condominium, unlike in the previous two types, the house is managed collectively by the dwellers; in particular, they have the freedom to choose and/or change utility providers, invest in major overhaul, and participate in co-financing programs.

Houses with Condominiums Pay Less for Heating

In our analysis, we use monthly data on housing costs between 2018 and 2020 collected from the Ukrainian municipal enterprise Kyivteploenergo. The data covers more than 70% of residential buildings in Kyiv and includes information on heating costs per square meter, whether or not the house is a condominium, and other house-characteristics (including the source of heating production; the presence of the meter; type of the meter number of service days per month; and share of heat consumption by legal entities).

In addition, we have information on the year of building construction retrieved from the real estate portal LUN, and condominium formation date between 2018-2020, as well as data on house participation in overhaul co-financing programs obtained from the Kyiv state administration.

Our final sample contains 7957 houses. Since we only are interested in apartment housing, we exclude residential buildings with an area below 500 m2, which would normally correspond to a small private house (these constitute only a small part of our sample). The share of condominiums in the sample is 11%, the share of houses with ZhEK is 81% and the share of houses managed by private companies is 8%.

Figure 1. Median costs for heating per m2 across housing management types and house age.

Source: Authors’ calculations. Old houses are those built before 1991, the year of Ukrainian independence, and new houses are built after 1991.

Figure 1 provides preliminary evidence towards our hypothesis, showing that the median heating costs are lower in condominiums, independent of the year of construction.

In our first econometric model, we use an OLS-approach to compare utility costs across different types of housing and management models, while controlling for a number of observable characteristics.  We find that condominiums in old houses pay 22% less for heating than old non-condominium. Similarly, we find that condominiums in new houses pay 29% less for heating compared to new non-condominiums.

The lower heating costs observed in condominiums may have several explanations:

  • First, condominium-type management could be more flexible in its response to weather conditions. Considering that they are profit-maximizing, heating providers in Ukraine tend to overheat houses during the heating season; it could be that condominiums reduce consumption of heating on the warmer days to a greater extent than other houses. In other words, condominiums could increase the efficiency of heating use.
  • Second, it could be that condominiums have lower heating costs because they improve energy efficiency, for example, by installing individual heating points (an automatized unit transferring heat energy from external heat networks to the house heating, hot water supply, ventilation, etc.), new windows, or even insulating the house.

Is There an Immediate Effect?

The next step in our econometric analysis is to study the effect of condominium formation during 2018-2020. Here, we investigate whether non-condominium houses that became condominiums experienced changes in heating costs by utilizing a fixed-effects regression model. This approach not only allows us to assess the immediate effect of condominium formation but also controls for unobservable house-specific characteristics that are constant over time, such as differences in building materials.

For new houses, we find that condominium formation decreases heating costs by 18% compared to other new houses. For old houses, we find that the corresponding effect is statistically insignificant.

This estimation only evaluates the effect of condominium formation in a relatively short timeframe, between 2018 and 2020. While the data coverage does not allow us to give a precise quantitative assessment for a long-run effect, we argue that the positive impact of condominium formation on heating costs could potentially be higher in the longer-run. Indeed, our previous OLS estimation assesses the average utility costs for all condominiums in the sample (including those formed prior to 2018).  It shows that the gap in heating costs between all condominiums and non-condominiums is higher than the corresponding gap derived from our fixed-effects estimation (22% for the old houses and 29% – for the new ones). While this difference in results can be driven by several reasons (e.g., fixed effect estimation taking into account unobservable house-specific characteristics), a stronger long-term effect could be among them.

Concerning the results for new vs. old houses, it might be the case that new houses are technically equipped to be more flexible when it comes to adjusting costs (e.g., are able to switch the heating on/off), while old houses might be inferior in this regard. If this is the case, old houses would only experience lower costs after some thermo-modernization, such as installing individual heating points.

Heating Costs and the Co-financing Program

Since 2015, the Kyiv city council offers a program that helps condominiums to finance major overhauls with the intent to improve the energy efficiency of the residential sector. Applicants compete in planning thermo-modernization projects where winning condominiums are awarded financing covering 70% of the overhaul cost.

Our results show that for old houses with condominiums, those who at some point participated in the co-financing program pay on average 15% less for heating compared to non-participants. The corresponding effect for new houses with condominiums is not significantly different from zero.

However, the immediate effect of program participation is present in both new and old houses with condominiums. Old and new condominiums that took part in the program in 2018-2019 experienced an immediate reduction in heating costs by 16% and 37% respectively.

Figure 2. The number of houses participating in the 70/30 co-financing program across the years.

Authors’ calculations.

There are several potential explanations as to why we observe an immediate effect but no effect of ever participating in the program for the new houses with condominiums.

First, it could be that new houses with condominiums that are not participating in the program are investing in overhaul anyway, although somewhat delayed compared to investments made by participating new condominiums. The average difference in heating costs between participants and non-participants would then be visible in the short-run and fade away after a few years. If this is the case, the program is financing houses that would have invested in overhaul anyway, even without co-financing. This explanation is partly supported by the fact that the share of the new houses condominiums among participants is 32%, while the corresponding share is 15% among all houses. In other words, old houses with condominiums, that are usually in a worse condition, are underrepresented in the program.

If this is the case, the share of old houses with condominiums among participants should be increased.  Given that the purpose of the program is to improve the energy efficiency of residential buildings, its efficient implementation implies encouraging overhauls in houses that are otherwise unable to fund it. In other words, the program should incentivize people living in energy-inefficient housing to form condominiums and undertake overhauls to improve their energy efficiency, rather than finance houses who are already doing well in that regard. To improve on such selection issues, the program could change the co-financing proportions, making participation more beneficial to old houses with condominiums, e.g.  80/20 – for old and 60/40 – for new condominiums.

Second, the new houses with condominiums that participate in the program might be in a much worse state before participation than those that do not. Program part-taking could make participants catch up to the average level of energy-efficiency (or perhaps do slightly better). If this is the case, the program fulfills its function in the sense that it targets the most energy-inefficient houses.

Government Policies That Should Be Changed

Above, we argue that the formation of condominiums leads to efficiency gains in energy use and cuts utility costs for dwellers. Given the design of the overhaul co-financing program, the Kyiv city council seems to recognize these benefits as well. However, there is a range of government policies currently in place that discourage people from condominium formation.

For example, there are cases when the government finances 100% of overhaul costs using a subvention (“subvention for socio-economic development”). In 2020, 17 houses in Kyiv got overhaul expenses funded by this type of subvention. At the same time, 85 houses that participated in the co-financing competition did not receive any state funding (there were 100 winners among 185 participants).

Considering that this type of subvention predominantly finances non-condominiums, we argue that this policy creates the wrong incentives.  Dwellers will likely refrain from forming condominiums in the hope of eventually being selected for an overhaul fully financed by the state, instead of forming condominium and getting only part of overhauls expenses covered (70% of the overhaul funding if winning co-finance program competition, and no funding otherwise).

In addition, this subvention typically has a “pork-barrel” nature since it is often allocated to the constituencies of the ruling party’s MPs. State financed overhauls are often used as an advertisement tool to get popular support. This creates an additional problem in the sense that subvention is targeted to politically loyal regions and not necessarily to regions in need of support.

Along this line of reasoning, we suggest that this pork-barrel subvention should be cancelled and housing-overhauls should instead be funded through co-financing programs. The government should implement programs similar to the “70/30” and further encourage people to adopt condominium ownership.

Conclusion

Motivated by the common perception that utility costs are excessively high, we study one possible way of reducing the utility bill – condominium housing management.

Our analysis shows that old houses with condominiums pay 22% less for heating compared to old non-condominiums. For new houses, we find that condominiums pay 29% less in heating costs than non-condominiums. In addition, old houses with condominiums that participate in Kyiv’s co-financing program pay 15% less than other old condominiums. That is, condominium formation combined with the co-financing program could save more than one-third of a resident’s heating costs.

Our analysis suggests the following policy implications:

  • Condominiums have a positive effect on energy efficiency, and utility cost savings, and should thus be promoted to the population as a preferable form of house management practice.
  • State and municipal governments should provide incentives for condominium formation through, e.g., overhaul co-financing programs. Other state-provided forms of overhaul financing, such as pork-barrel subvention, should be cancelled.
  • Co-financing programs should combine better targeting (e.g., to those houses that are in greater need of overhaul) with sufficient incentives for condominium formation.

References

  • Hamaniuk, Oleksii; and Andrii Doschyn, 2020.  “Let’s reduce the cost of heating by a third!” – ACMH and co-financing program for buildings”, https://voxukraine.org/en/let-s-reduce-the-cost-of-heating-by-a-third-acmh-and-co-financing-program-for-buildings/
  • Banks, Christopher, Sheila O’Leary, and Carol Rabenhorst, 1996.  Review of urban & regional development studies, vol. 8, issue 2. https://doi.org/10.1111/j.1467-940X.1996.tb00114.x

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.