Project: FREE policy brief

Does Foreign Aid Foster Female Empowerment?

Posted on October 16, 2023 | Policy Brief

20231009 Foreign Aid Female Empowerment Image 01

Over decades much attention has been devoted to the relationship between foreign aid and economic growth, while few studies have focused on the effects of foreign aid on female empowerment. This despite the fact that empowerment of girls and women is a key driver of development, and often an explicit objective of foreign aid. Using geo-coded data on aid project placement and household-level survey responses, Perrotta Berlin, Bonnier and Olofsgård (2023), show that foreign aid has a modest but robust effect on several dimensions of female empowerment. This is the case for both aid in general and gender-targeted aid, highlighting the potential of foreign aid to reduce gender inequalities. It is also found, though, that the impact is contingent on the context, and that there can even be a backlash in male attitudes towards female empowerment in more traditional communities.

The donor community has long been invested in the empowerment of women and girls, and the 2030 Agenda for Sustainable Development also includes gender equality as an explicit goal. Yet surprisingly little quantitative research has tried to make a broader assessment of the effect of foreign aid on gender equality measures.

This policy brief summarises a study by Perrotta Berlin, Bonnier and Olofsgård (2023) which addresses this question by matching the location of aid projects with geo-coded household surveys in Malawi between 2004 and 2010. Analysing the community-level impact on five different female empowerment indices, the study finds foreign aid to affect positively women’s empowerment across several dimensions. Furthermore, the authors find that gender-targeted aid has an additional impact on an index measuring women’s control over sexuality and fertility-related decisions and an index focusing on violence against women.

When considering areas with patrilineal land inheritance traditions, the results however partly shift, especially in relation to men’s attitudes. This implies that the success of foreign aid and gender-targeted aid in reducing gender inequalities may be conditional on the community context.

Gender Equality and Foreign Aid in Malawi

Malawi is highly dependent on foreign aid. Net official development assistance (ODA) has exceeded 10 percent of gross national income yearly since 1975, reaching as high as 23.5 percent in 2016 (World Bank, WDI database).

In recent years, reforms have been undertaken by the Malawian government to improve gender equality. The minimum legal age of marriage was raised from 15 to 18 through the 2015 Marriage, Divorce and Family Relations Bill, and the 2013 Gender Equality Act strengthened the legislation concerning gender-based violence and included a universal condemnation of all types of gender-based discrimination. Yet, in 2020, Malawi was ranked 116 out of 153 in the World Economic Forum Gender Gap Report and 172 out of 189 in UNDP’s Gender Inequality Index. An area of concern regards the high rates of child marriage, with 9 percent of girls already married at age 15 and 42 percent by the age of 18. Alongside these numbers, 31 percent of women report to have given birth by the age 18.

Another aspect potentially influencing gender equality is the prevalence of matrilinear land tenure systems, particularly in the southern and central parts of the country (as depicted in Figure 1). While previous research has shown that land ownership empowers women and suggested that property rights affect decision power over key decisions, fertility preferences, age of marriage etc., less research has been devoted to analysing the effects on women’s empowerment outcomes in a matrilinear kinship setting. Some recent literature however suggests women in matrilinear societies have greater say in household decisions – including financial ones – and are less accepting of, as well as exposed to, domestic violence (Lowes, 2021; Djurfeldt et al., 2018).

Figure 1. Intensity of matrilineal tenure in Malawi.

Notes: The figure plots the geographic distribution of the authors’ matrilineal indicator. They base their definition of matrilineal societies on the ethnic identification of individual respondents. The intensity at the cluster level varies between 0 and 1 representing the share of respondents that identify themselves as belonging to one of the ethnic groups classified as matrilineal.
Source: Perrotta Berlin, Bonnier, Olosgård (2023).

Methodology and Data

For the analysis, the authors make use of geo-coded data on aid projects from the Government of Malawi’s Aid Management Platform (AMP) and match it to household-level data from the Malawi Demographic and Health Survey (DHS). The country of Malawi and the period 2004-2010 were chosen in order to maximize data coverage on aid disbursement. Malawi’s AMP covers 80 percent of all aid entering the country during those years, which gives a much more complete picture compared to only focusing on one specific donor.

To identify causal impact, the authors apply a difference-in-differences specification on survey clusters in proximity to aid projects implemented between 2004 and 2010. Proximity was identified as within a 10-kilometer radius from an aid project. Among those, households interviewed in 2004, i.e., prior to the implementation date of any aid project, were considered the control group, and households interviewed in 2010 formed the treatment group. The underlying assumption of parallel pre-treatment trends was confirmed with the use of earlier DHS surveys. The model specification includes individual-level controls (age, ethnicity, household size, a Muslim dummy, years of education and literacy) and also a geographic fixed-effect based on a grid of coordinates.

The analysis distinguishes between the impact of aid in general, and the additional impact of gender-targeted aid.  Gender-targeted projects are defined as projects that have any of the words woman, girl, bride, maternal, gender, genital or child, in the title, description or activity list. When estimating the effect of gender-targeted aid the authors control for overall aid intensity in the household’s vicinity. The estimated effect should therefore be interpreted as the additional effect from being exposed to a gender-targeted aid project while keeping the general number of aid projects in the area constant.

Figure 2. Map of aid projects and household clusters from 2004 and 2010 survey waves in Malawi.

Notes: The figure plots the geographic distribution of aid projects and of household clusters in the two DHS waves. The colour of the dots reflects whether the project has a gender component or not, while the shape of the household dot reflects the survey wave.
Source: Perrotta Berlin, Bonnier, Olofsgård (2023).

To capture female empowerment, the authors make use of thousands of responses to DHS survey waves from 2004 and 2010. From these responses, the authors construct four different indices. Two of these are modelled on indices used in different contexts by Haushofer and Shapiro (2016) and Jayachandran et al. (2023). The former captures experiences of violence together with men’s and women’s attitudes towards violence, and some measures of decision making and control over household resources. The more recent index by Jayachandran et al. (2023) focuses on female agency and includes questions on women’s participation in decisions on large household purchases and daily expenditures, decisions on family visits, and decisions concerning their own healthcare.

To also capture questions related to sexual and fertility preferences, often regarded as measures of female empowerment, the authors construct two additional indices. The women’s attitudes index is based on responses to questions about whether the respondent is able to refuse sexual intercourse with her husband and ask him to use a condom, age at first marriage, and age at first childbirth, among others. The men’s attitudes index is based on questions about whether the respondent thinks it is justified to use violence to force intercourse, if a woman is justified to refuse intercourse, as well as fertility and child spacing preferences. In addition, all four indices are weighted and combined into an aggregated general index.

Results

Considering all aid projects, the authors find that being exposed to an aid project in the 2004 to 2010 window has a significant positive impact on the agency index, the female attitude index and the combined general index (12, 11 and 31 percent of their respective means). When considering gender-targeted aid, the authors found the exposure to at least one such project to increase the women’s attitude index by 7 percent and the general index by 17 percent of their respective means. The impact is present for both a narrower and a wider exposure area, and quite persistent over time.

When breaking down the analysis for areas with matrilineal versus patrilineal land tenure systems the results diverge. In communities where the share of matrilineal ethnic groups exceeds the mean of 73 percent, the results are largely in line with those in the full sample. In patrilineal communities (< 73 percent matrilineal households), the results are however vastly different. Aid projects in general, and gender-targeted aid in particular, affect negatively the men’s attitudes index. In addition, gender-targeted aid seems to have no additional impact on the other indices.

Conclusion

In the paper underlying this brief, the authors study the effect of foreign aid on female empowerment, a frequent but understudied objective often set by donors. Looking at geo-coded aid projects in Malawi, the authors estimated such projects to positively impact girl’s and women’s empowerment across several indices. This is true for aid in general, and for some indices even more so when considering gender-targeted aid. Some of the positive results disappear or even change sign, though, in patrilineal communities, displaying the significance of pre-existing community norms for the effectiveness of development investments. Aid even generates a backlash when it comes to men’s attitudes towards women’s sexual and fertility preferences in these communities.

The takeaway from the study lies in foreign aid’s potential to empower women in targeted communities. This however hinges on pre-existing norms in recipient communities – something that aid donors should be aware of.

The authors emphasize the need for more research to better understand the role of pre-existing norms in the uptake of aid, to distinguish direct effects from aid from potential spillovers, and to understand what type of aid projects deliver the best outcomes in terms of female empowerment.

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.

Polish Parliamentary Elections 2023: Social Transfers and the Voters the Government is Counting On

Posted on October 9, 2023 | Policy Brief

20231009 Polish Parliamentary Elections Image 02

The heated election campaign preceding the October 15th election in Poland has focused on fundamental issues related to the rule of law, migration, media freedom, women’s and minority rights, climate policy as well as Poland’s role on the international arena. The election outcome will determine Poland’s role in the EU and as well as the country’s future relations with Ukraine. It will also be decisive for the direction of Polish politics and the foundations of socio-economic development for many years to come. Despite these issues, the primary worries for a substantial portion of Polish households concern the domestic challenges of increasing prices and material uncertainty. With this in mind, this Policy Brief summarizes the results of CenEA’s recent analysis, which demonstrates a clear pattern in the United Right government’s policy, that in the last four years has strongly favored older groups of the Polish population. In the 2019 elections financial support directed to families with children was a key factor in securing a second term in office for the governing coalition. It remains to be seen if the focus on older voters pays off in the same way on October 15th.

Introduction

The upcoming parliamentary elections on October 15th will close a very special term of the Polish Parliament, marked by the Covid-19 pandemic, a surge in prices of goods and services, as well as the full-scale, ongoing Russian invasion of Ukraine and the tragic consequences associated with it. An evaluation of the second term of the United Right’s (Zjednoczona Prawica) government should, on the one hand, cover the most important decisions made in response to these crises. On the other hand, the last four years have also been a time of significant decisions with important medium- and long-term consequences, both directly for Polish households’ financial situation and more broadly for the economy at large and the country’s socio-economic development.

The heated election campaign has focused on the fundamental issues related to the rule of law, migration, media freedom, women’s and minority rights, climate policy as well as Poland’s role on the international arena. The upcoming vote is likely to be decisive in regard to Poland’s relations with partners in the EU, the role it will play in the EU and – as recent government declarations have demonstrated – the development of future relations with Ukraine. The result of the October elections will be pivotal also for the direction of Polish politics and the foundations of socio-economic development for many years to come. At the same time however, recent surveys have shown that the main concern for a significant part of the Polish society lies closer to home, driven by the challenges of rising prices of goods and services and related material uncertainty.

In light of this, this policy brief summarizes the tax and benefit policies directly affecting household finances, which were implemented in the first and second term of the United Right’s rule (i.e., 2015-2019 and 2019-2023). The brief draws upon a detailed analysis published recently in the CenEA Preelection Commentaries (Myck et al. 2023 a,b,c). The results show a notable shift in the government’s focus – while families with children were the main beneficiaries of the reforms implemented in the first term, the policies over the last four years have concentrated transfers and tax advantages to older generations. As we approach election day, it seems likely that the government will further try to mobilize support from this group of voters

The United Right’s Second Term: Tax and Benefit Reforms During High Inflation

In recent years, Polish households has, apart from two major crises (the Covid-19 pandemic and the complex consequences from the Russian invasion of Ukraine), faced one of the greatest price increases in the EU. During the closing term of Parliament, from January 2020 to July 2023, prices increased by 35.6 percent and have continued to grow at a rate significantly exceeding the inflation target set by the National Bank of Poland (2.5 percent +/- 1 percentage point per year). By the end of 2023 the combined inflation rate will reach 38.7 percent. Although average wages have also been rising (nominally by 41.7 percent from January 2023 to July 2023), wage growth has not kept up with the inflation for many workers. One needs to also bear in mind that a significant proportion of Polish households rely on income from transfers and state support. At the same time households’ material conditions have deteriorated as a result of a significant reduction in the real value of their savings.

In 2022 and 2023 the government introduced a number of temporary policies designed specifically to assist households facing higher energy and food prices. Throughout the final term in office, it also adopted several reforms which – as we show below – affected some groups more than others, reflecting a clear policy preference:

a) in January 2020 and May 2022 respectively, the government legislated an additional level of support addressed to retirees and disability pensioners. These so-called 13th and 14th pensions have raised the minimum level of pension benefits.

b) in January 2022 the government implemented a major overhaul of the income tax system (the so-called Polish Deal) which significantly influenced the tax burden on most taxpayers, strongly benefitting pension recipients.

c) throughout the term of Parliament, the government has kept the values of most social benefits frozen at their nominal level. This includes its flagship program – the universal 500+ parental benefit (500 PLN, roughly 110 EUR per child per month), introduced in 2016 – as well as means tested family benefits directed to poorer families with children. As a result, both the values as well as eligibility thresholds has fallen by nearly 40 percent.

The implications of these three policy areas are reported in Table 1 for the 2019-2023 term of Parliament and contrasted with benefits and costs from government policies implemented in the first term of Parliament (2015-2019). The results have been calculated using the SIMPL microsimulation model and are based on a representative sample of over 30 000 Polish households from the 2021 Household Budget Survey (for methodological details see Myck et al., 2015; 2023c). The applied method allows for singling out policy effects from other factors affecting household incomes.

Table 1 shows a clear difference in focus; from substantial benefits directed at families with children in 2015-2019 to policies targeted at pensioners, partly at the cost of families with children, in the second term. It is also worth noting that while government policy continued to increase household incomes, the resulting gains in disposable incomes in the second term have been much more modest.

Table 1. The impact of modelled policies in the tax and benefit system on household income in the two terms of the United Right’s government.

Source: CenEA – own calculations using the SIMPL model based on 2021 Household Budget Survey data (reweighted for simulation purposes and indexed to July 2023).
Notes: Simulations with respect to the system and price level from July 2023. Changes are presented in relation to the indexed system from 2015 for the first term of office of the United Right government and the indexed system from 2019 for the second term of office. *Including family allowance with supplements, care benefits, parental leave benefit, and one-off allowance for the birth of a child. The applied exchange rate is 4.6PLN=1EUR.

The contrast is also visible when the totals from Table 1 are divided and allocated to specific family types, as presented in Figure 1. On average lone parent families gained about 800 PLN (170 EUR) per month as a result of policies implemented in the 2015-2019 term, while they lost 160 PLN (35 EUR) in the second term. Married couples with children gained 950 PLN (205 EUR) and lost 259 PLN (55 EUR) in each term, respectively. In contrast to this, gains of pensioner families were modest during the first term, while the policies implemented in the second term imply gains of about 310 PLN (70 EUR) per month for single pensioners and 630 PLN (140 EUR) per month to pensioner couples. Gains and losses by family type resulting from policies implemented between 2019-2023 are shown in more detail in Figure 2. Over 85 percent of single pensioners have seen gains of more than 200 PLN (45 EUR) per month, and a similar proportion of pensioner couples gained over 400 PLN (90 EUR) per month. At the same time the majority of families with children, both among lone parent families and married couples, principally as a result of benefit freezes, saw their incomes fall in real terms. The values of the universal 500+ parental benefit will be indexed in January 2024, and the government has made this indexation an important element of the campaign. However, the indexation will not compensate the losses that families experienced in the last four years, a period with high inflation. It remains to be seen if a promise of higher transfers in the future will translate into political support, as seen in the 2019 elections (Gromadzki et al. 2022).

Figure 1. The impact of modelled policies in the tax and benefit system on household income in the two terms of the United Right’s government, by family types.

Source: CenEA – own calculations using the SIMPL microsimulation model based on 2021 Household Budget Survey data (reweighted for simulation purposes and indexed to July 2023).

Figure 2. Ranges of monthly benefits and losses resulting from the modelled policies introduced in the United Right government’s second term of office (2019-2023), by family type.

Source: CenEA – own calculations using the SIMPL microsimulation model based on 2021 Household Budget Survey data (reweighted for simulation purposes and indexed to July 2023).

Timing and Other Tricks: Securing the Votes of Older Generations

The so-called 13th and 14th pensions are paid once per year, in May and September respectively, to recipients of public pensions, at a value equivalent to a monthly minimum pension (approximately 360 EUR). While the first is a universal benefit, the latter has a withdrawal threshold and is thus targeted at lower income pensioners. In 2023 the government decided to increase the value of the 14th pension to about 580 EUR, with the benefits paid out to pensioners in September, the month before the election. This additional bonus came at the cost of about 7 billion PLN (1.6 billion EUR) – a budget which could have paid for two years of indexation of benefits targeted at low-income families with children or financed the payment of the indexed value of the universal 500+ parental benefit for nearly four months. The decision completes the picture of a clear preference for the older generation in regard to social policy in recent years and suggests a clear focus on this group of voters prior to the upcoming election.

The government has also taken a number of steps to facilitate electoral participation among voters in smaller communities by increasing the number of polling stations and making it obligatory for local administrations to finance transportation for older individuals with mobility limitations. The government is also mobilizing voters in smaller communities with turn-out competition initiatives. Additionally, some commentators have pointed out that the choice of election day – one day ahead of the so-called ‘Papal day’, devoted to the memory of John Paul II – is also non-accidental.

Conclusion

The analysis presented in the recent CenEA Preelection Commentaries and summarized in this brief indicates that in the area of reforms directly affecting household incomes, pensioners are the social group that benefited most from the United Right’s government policies in the 2019-2023 term of office. This is evident both from policies that have become a permanent feature of the Polish tax and benefit system, as well as from various one-off decisions. Taking into account other policies surrounding the approaching parliamentary election, it seems clear that the government is strongly counting on the support of older generations of voters on October 15th. As election day is approaching it becomes more and more evident though, that securing their vote may not suffice to win a third term in office. Numerous policy and corruption scandals, a significant departure from judicial independence and an extreme degree of governing party dominance in public media have come to the fore of public debate ahead of the vote. According to recent polls the final outcome is still uncertain and even small shifts in support might swing the future parliamentary majority. According to Gromadzki et al. (2022), financial support directed to families with children was a key factor for securing a second term in office for the United Right coalition four years ago. It remains to be seen if the policy focus on older voters pays off in the same way on October 15th.

Acknowledgement

The authors wish to acknowledge the support of the Swedish International Development Cooperation Agency (Sida) under the FROGEE and FROMDEE projects. FREE Policy Briefs contribute to the discussion on socio-economic development in the Central and Eastern Europe. For more information, please visit www.freepolicybriefs.com.

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.

Insights and Research Shared at the 2023 FREE Network Retreat

Posted on October 3, 2023 | Policy Brief

FREE network retreat Image from the conference

The 2023 FREE Network Retreat, an annual face-to-face event for members of the FREE Network, gathered its representatives to share and exchange research ideas and to discuss its institutes’ respective work and joint efforts within the Network. An academic session highlighted multiple overarching areas of interest and opportunities for research collaboration and included a plenary session on topics ranging from theoretical underpinning of Vladimir Putin’s regime to climate change beliefs and to consumer behaviour in credit markets. A session addressing the respective institute’s work during the last year also demonstrated the importance and relevance of the FREE Network’s joint initiatives on gender, democracy and media, and climate change and environment: FROGEE, FROMDEE and FREECE. This brief gives a short outline of the plenary session and an overview of some further topics covered during the conference.  

The Academic Day

The Academic Day consisted partly of a plenary session and partly of an academic session. The academic session was outlined to demonstrate the wide spectrum of research interests within the network and to promote and highlight the opportunities for research collaboration. Designed as a series of poster sessions, each organized around a common research theme, it allowed for an exchange of ideas between presenting researchers and the audience while displaying the overlap of the various research interests across the institutes. At the same time, the poster session combined the broad range of topics within 10 overarching subjects (trade, gender, migration and education, public economics, energy, labor, political economy and development, macro, conflict, and theory and auctions).

The plenary session further illustrated the wide variety of topics the FREE Network researchers’ work on. During the plenary session, three distinguished presentations were held, summarized in what follows.

“Why Did Putin Invade Ukraine? – A Theory of Degenerate Autocracy”

Firstly, Konstantin Sonin, Professor at the University of Chicago Harris School of Public Policy, gave a presentation of his working paper (with Georgy Egorov, Northwestern University) in which the Russian full-scale invasion of Ukraine is explained through a theoretical framework on dictators’ decision-making in degenerate autocracies.

Sonin outlined how the beliefs about Ukraine in Kremlin, prior to the invasion, were factually wrong. For example, Kremlin believed that Ukraine, despite plenty of facts pointing in the opposite direction, lacked a stable government and had an incapable army. Further, it was believed that the US and Europe wouldn’t care about Ukraine and that Russian troops would be welcomed as liberators – the latter exemplified by the fact that Russia sent police and not the army during the first phase of the invasion. He also stressed that the decision to invade Ukraine is likely to have disastrous consequences for Vladimir Putin, his regime, and for Russia as a whole. This is, however, not the first example of a disastrous decision made by a leader of an autocratic regime, leading up to the question: What explains such choices that should not rationally have been made? And how can leaders make them in highly institutionalized environments where they are surrounded by councils and advisors who are supposed to possess the best expertise?

The model presented by Sonin assumes a leader in such highly institutionalized environment that wishes to stay in power and whose decisions are based on input from subordinates. The subordinates differ in level of their expertise and the leader thus chooses the quality of advice that he receives through his choice of subordinates.  In turn, while giving advice to the leader, the subordinate considers two factors: the vulnerability of the leader and their own prospects should the leader fall. In equilibrium there is a tradeoff as competent subordinates are also less loyal (since a more competent person might know when to switch alliances and have better prospects if the regime changes).

The leader also has access to repression as an instrument. Repression decreases his changes to be overthrown but raises the stakes for a potential future power struggle, as a leader with a history of repression is more likely to be repressed by his successor.

This interaction creates a feedback loop. If a dictator chooses repression, he feels more endangered, and he then chooses a more loyal subordinate who is less likely to deceive him for personal gain under a potential new regime. However, this leads to the appointment of less competent subordinates whereafter the information that flows to the leader becomes less and less reliable – as illustrated by Kremlin’s beliefs about Ukraine prior to the war.

There are three types of paths in equilibrium, Sonin explained; 1. “stable autocracy”, with leaders altering in power and choosing peaceful paths without repressions 2. “degenerate autocracy” – where the incumbent and opponent first replace each other peacefully and then slide into the repression-based change of power (until one of them dies and the story repeats), and 3. “consecutive degenerate autocracy” – where each power struggle is followed by repression.

Concluding his presentation, Sonin highlighted that in a degenerate autocracy such as Russia, individual decisions by the leader are rarely crucial due to the high level of institutionalization. However, as shown by the model, the leader is inevitably faced with a situation where he is surrounded by incompetent loyalists feeding him bad intel and setting him up to make disastrous decisions – most recently displayed in Vladimir Putin’s decision to invade Ukraine.

“Facing the Hard Truth: Evidence from Climate Change Ignorance”

Pamela Campa, Associate Professor at Stockholm Institute of Transition Economics, gave the conference’s second presentation, which detailed her work (with Ferenc Szucz, Stockholm University) on climate change skepticism.

Campa opened her talk with the current paradox regarding climate change, where, in the scientific community there is a strong consensus about the existence of climate change, but in society at large, skepticism is largely prevalent. This can be exemplified by one quarter of the US population not believing in global warming in 2023, and Europeans not believing in the fact that humans are the main driver of climate change.

According to Campa, the key question to answer is therefore “Why does ignorance about climate change persist among the public – in spite of the overwhelming evidence?”. One possible explanation may be a deficit in comprehension; people simply don’t understand the complexity of climate change and thus follow biased media and/ or politicians more or less sponsored by lobbyists. However, research have shown scientifical literacy to be quite uncorrelated with climate change denial, contradicting the above explanation. The second hypothesis, and of focus in the study, instead revolve around the concept of information avoidance. To test the hypothesis that people actively avoid climate change information, the authors key in on coal mining communities in the US having been exposed to negative shocks in the form of layoffs. These communities are of interest given their strong sense of identity and the fact that they are directly affected by the green transition. Arguably, a layoff shock would negatively affect not only their economy, but also pose a threat to their perceived identity. Given the context, it can thus be assumed that these communities to a larger extent would avoid information on climate change and information post-shock to restore the threatened identity.

The authors consider US counties experiencing mass layoff (more than 30 percent of mining jobs lost between 2014 and 2017) as treated counties, finding that in these counties, learning about climate change is 30 to 40 percent lower than in counties having experienced no mass layoffs. To account for the fact that the layoff itself may cause changes in learning, the authors also consider an instrument variable analysis in which gas prices are exploited as instrument for the layoffs – once again displaying the fact that people in affected communities believe climate change to be caused by humans to a lesser extent, when compared to counties in which no mass layoffs had occurred.

Interestingly, when controlling with other industries with somewhat similar characteristics (such as metal mining), the drop in climate change learning disappears, feeding in the notion of “identity-based information avoidance”.

The lack of support for and consensus among the public of the ongoing climate change and its drivers might pose a threat for the green transition as well as reduce personal effort to reduce the carbon footprint, Campa concluded.

“Consumer Credit with Over-Optimistic Borrowers”

In the plenary session’s last presentation, Igor Livshits, Economic Advisor and Economist at the Federal Reserve Bank of Philadelphia, presented his working paper (with Florian Exler, University of Vienna, James MacGee, Bank of Canada and Michèle Tertilt, Mannheimer University) on consumer credit and borrower’s behaviour.

There has been much debate on whether and how to regulate consumer credit products to limit misuse of credit. In 2009/2010 several initiatives and regulations (such as the 2009 Credit Card Accountability Responsibility and Disclosure Act) were introduced with the aim of protecting consumers and borrowers from arguments that sellers of credit products exploit lack of information and cognitive capacity of borrowers. There is however a lack of evaluation of such arguments and subsequent regulations, which Livshits explained to be the motivation behind the paper.

The paper differentiates between over-optimistic borrowers (behaviour borrowers) and rational borrowers (rationalists). While both types face the same risks, behaviour borrowers are more prone to shocks and are at the same time unaware of these worse risks (i.e., they believe they are rationalists). Focusing on these types of borrowers, the paper introduces a model in which the lenders endogenously price credit based on beliefs about the borrower type. Households decide whether to spend or save and if to file for bankruptcy in an environment in which they are faced with earning shocks and expense shocks.

In this structural model of unsecured lending and default, Livshits finds that behavioral borrowers’ “risky” behaviour negatively affects rationalists since both types are pooled together and, thus rationalists are overpaying to cover for the behaviour borrowers. A calibration of the model also suggests that behavioral borrowers borrow too much and file for bankruptcy too little and too late.

Livshits argued that the model does not provide evidence of the notion that borrowers need protection from lenders, but rather that borrowers need to be protected from themselves. In fact, had behaviour borrowers been made aware of the fact that they are overly optimistic about the actual state of their future incomes, they would borrow 15 percent less.

To address the increased risks behaviour borrowers take at the cost of rationalists, policies such as default made easier, taxation on borrowing, financial literacy efforts and score-dependent borrowing limits could all be considered. Such policies may lower debt and reduce bankruptcy filings but as they may also reduce welfare and exhibit scaling difficulties.

Updates from the Institutes

During the Retreat, the respective institutes shared the previous year’s work, and updates within the FREE Network’s three joint projects were also presented. These go under the acronyms of FROMDEE (Forum for Research on Media and Democracy in Eastern Europe), FREECE (Forum for Research on Eastern Europe; Climate and the Environment) and FROGEE (Forum for Research on Gender Economics in Eastern Europe), and address areas of great relevance in Eastern Europe and the Caucasus. Researchers from all FREE Network institutes work on these topics, with the most recent policy paper written in coordination by SITE, KSE and CenEA (with expert Maja Bosnic, Niras International Consulting). The policy paper focuses on the gender dimension of the reconstruction of Ukraine – putting emphasis on the necessity of gender budgeting principles throughout the various parts of reconstruction.  An upcoming joint research paper will consider the effects of gasoline price increase on household income across the Network’s countries, written under the FREECE umbrella.

The three themes of gender, media and democracy, and environment and climate are not only purely research topics within the institutes. They also reflect developments and challenges that the institutes to a various extent face in the respective contexts in which they operate. The work focusing on the reconstruction of Ukraine is an excellent example of an area that encompasses all three.

Another example of the relevance of the three themes features prominently in one of the institutes’ most tangible contribution to their respective societies: their education programs. Nataliia Shapoval, Vice President for Policy Research at Kyiv School of Economics (KSE), emphasized how KSE has – amid Russia’s war on Ukraine – managed to greatly expand. Over the past year, KSE has launched 8 new bachelor’s and master’s programs, some of which are directly targeted at ensuring postwar reconstruction competence. On a similar note, Lev Lvovskiy, Academic Director at the Belarusian Research and Outreach Center (BEROC) mentioned the likelihood of next year being able to offer students a bachelor’s program in economics and several business courses in Vilnius – BEROC’S new location. BEROC’s effort in providing quality education in economics to Belarus’ exile youth is considered a fundamental investment in the future of the country – providing a competent leading class capable of installing democracy and fair elections in Belarus once the current regime is gone. The emphasis on education was further highlighted by Salome Gelashvili, Practice Head, Agriculture & rural policy at the International School of Economics Policy Institute (ISET-PI) who not only mentioned the opening of a master’s program in Finance at ISET but also the fact that an increasing number of students who’ve recently graduated from PhD’s abroad are now returning to Georgia. Such investments into education are necessary to counter Russian propaganda in the region all three agreed, emphasizing the need to continually stem Russia’s negative influence in the region. This investment into education is also important to hinder countries from sliding away from democratic values – realized in Belarus and threatening in Georgia.

To further delve into the issues of democratic backsliding, a tendency that has been recently observed not only in the region but also more widely across the globe, FROMDEE will organize an academic conference in Stockholm on October 13th, 2023.

Concluding Remarks

The 2023 FREE Network Retreat provided a great opportunity for the Networks’ participants to jointly take part of new research and to share experiences, opportunities, and knowledge amongst each other. The Retreat also served as reminder of the importance of continuously supporting economic and democratic development, through research, policy work, and networking, in Eastern Europe and the Caucasus.

List of Presenters

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 Future of Energy Infrastructure Resilience in Europe

Posted on June 19, 2023 | Policy Brief

20220524 The Energy and Climate Crisis Image 01

In the wake of Russia’s full-scale invasion of Ukraine, large parts of Europe have experienced skyrocketing energy prices and a threat of power shortages. The need to transition to low-carbon energy systems, driven by sustainability concerns, further adds to the pressure put on the European energy infrastructure. This year’s Energy Talk, organized by Stockholm Institute of Transition Economics, invited four experts to discuss the opportunities and challenges of energy infrastructure resilience in a foreseeable future.

Introduction

Energy infrastructure has an indispensable role in facilitating the functioning of modern society, and it must – today as well as in the future – be resilient enough to withstand various challenges. One of the most important challenges – the green transition: shifting towards economically sustainable growth by decarbonizing energy systems and steering away from fossil fuels – requires energy infrastructure to absorb subsequent shocks. Another, and preeminent challenge, is that, even when directly targeted and partly destroyed as in the ongoing Russian war on Ukraine, energy infrastructure should be withstanding. Additionally, energy infrastructure is increasingly subject to supply chain disruptions, energy costs increase or network congestions. How does our energy infrastructure react to these challenges? How do they affect its ability to facilitate the needs of the green transition? Which regulations/measures should be implemented to facilitate energy infrastructure resilience?

Stockholm Institute of Transition Economics (SITE) invited four speakers to the 2023 annual Energy Talk to discuss the future of Europe’s Energy infrastructure resilience. This brief summarizes the main points from the presentations and discussions.

Energy System Resilience in the Baltics

Ewa Lazarczyk, Associate Professor at Reykjavik University, addressed the question of energy system resilience, focusing on the Baltic States and their dependence on Russia and other neighbors to fulfill their electricity needs.

The Baltic States are not self-sufficient when it comes to electricity consumption. Since 2009, Lithuania has become a net importer of electricity, relying on external sources to fulfill its electricity demand. Similarly, Estonia experienced a shift towards becoming a net importer of electricity around 2019, following the closure of environmentally detrimental oil fueled power plants.

The Baltics are integrated with the Nordic market and are heavily dependent on electricity imports from Finland and Sweden. Additionally, all three Baltic States are part of the BRELL network – a grid linking the electricity systems of Belarus, Russia, Estonia, Latvia, and Lithuania – which provides stability for their electrical networks. As a result, despite the absence of commercial electricity trading between Estonia and Russia, and limited commercial trading between Russia and the other two Baltic states, the power flows between the Baltic States and Russia and Belarus still exist. This creates a noticeable dependency of the Baltics on Russia, and a potential threat, should Russia decide to disconnect the Baltics from BRELL before the planned separation in 2024/2025.

This dependency was put on trial when Russia on May 15th 2022 cut its electricity trade with Europe. On the one hand, the system proved to be relatively resilient as the cut did not lead to any blackouts in the Baltics. On the other hand, price volatility amplified in its main import partner countries, Sweden and Finland, and congestion increased as compared to 2021.

Figure 1. Price volatility in Sweden and Finland before and after the trade cut.

Notes: Sweden is split into four price zones, SE1-SE4. Finland is split into only one price zone. Source: Lazarczyk and Le Coq, 2023.

This increased price volatility and congestion following the Russian halt in electricity trade gives an indication that the Baltics and the Nordics are vulnerable to relatively small supply cuts even at the current demand levels.

In the future, electricity consumption is however expected to increase throughout the region as a result of the electrification of the economy (e.g., by 65 percent in 2050 in the Nordic region). This highlights the need to speed up investments into energy infrastructure of internal energy markets.

In summary; recent events have demonstrated a remarkable resilience of the Baltic State’s electricity system. While the disruption of commercial flows from Russia did have some impact on the region, overall, the outcome was positive. Nonetheless, it is important to note that the region relies heavily on electricity imports, and with increasing demand for power in both the Baltics and the neighboring areas, potential issues with supply security could arise if the demand in the Nordics cannot be met through increased production. The risk of an early disconnection from the BRELL network further amplifies this concern. However, the case of Ukraine – which managed to abruptly disconnect from Russian electricity networks – serves as an example that expediting the process of establishing new connections is feasible, although not risk free.

The Ukrainian Energy Sector and the Immediate Threat from Russia

While the Baltics are facing the effects from the Russian halt in electricity trade and the threat of a potential premature disconnection from BRELL, Ukraine’s energy networks are at the same time experiencing the direct aggression from Russia.

Yuliya Markuts, Head of the Center of Public Finance and Governance at the Kyiv School of Economics (KSE), and Igor Piddubnyi, Analyst on Energy Sector Damages and Losses and Researcher at the Center for Food and Land Use Research at KSE, both gave insight into the tremendous damages to the Ukrainian energy system from Russian attacks, the short-term solutions to cope with the damage, as well as the long-term implications and reconstruction perspectives.

Since the invasion, about 50 percent of the energy infrastructure has been damaged by shelling. In addition, several power plants are under Russian control or located in Russian occupied territories. As of February 2023, nearly 16 GW of installed capacities of power plants remained in Russian control, equivalent of the peak demand. Apart from the damages to the producing side, transmission and distribution facilities have also been severely affected, as well as oil storage facilities. In April 2023, the damages to Ukraine’s energy infrastructure were estimated to amount to $8.3 billion, almost 6 percent of the total estimated direct damages from the war.

While the damages are massive, the population did not experience complete blackouts, and the Ukrainian energy system did not collapse. This is partly due to diesel-driven generators substituting much of the damaged electricity generation and partly due to a fall in demand of about 30-35 percent in 2022, mainly driven by decreased industry demand.

In the short term, Ukraine is likely to continue to face Russian attacks. Its top energy priorities would thus be to restore damaged facilities and infrastructure like heating and clean water, increase the stocks of fuel, gas, and coal, and to try to liberate occupied areas and facilities. Another vital aspect of the Ukrainian energy infrastructure and its resilience towards the Russian goal of “freezing” the country relates to energy efficiency. Ukraine’s energy efficiency has been relatively low, with the highest rate of electricity losses in Europe, and the numbers are also high for gas supply and district heating. Here, minor changes such as light bulb switching, can have great impacts. Additionally, solar panels – especially those that can also store energy – can help alleviate the acute pressure on the transmission grid. Other vital measures involve continued donations from Ukraine’s partners, sustained efforts from energy workers – at the risk of their lives – and persistent successful deterrence of cyber-attacks currently targeting the country.

Achieving a greener energy system is currently challenging (if not nearly impossible) due to the use of diesel-driven generators, the attacks on the energy system, and the fight for control over nuclear power plants such as Zaporizhzhia, which since March 2022 is under the control of Russian forces. Damages to renewable energy production further exacerbate these difficulties.

Thus, it is crucial to ensure that the planning and reconstruction of Ukraine’s energy sector is done in accordance with the European Green Deal. By 2030, the country should have at least 25 percent renewables in its energy mix, which would require substantial installations of at least 13 GW of wind, solar, small hydro and biogas capacities. In addition, transition entails decommissioning old coal power plants to run on natural or biogas instead of coal.

While this is a tall task, investments targeted to the energy system are not only essential for Ukraine’s population to sustain through the 2023/2024 winter – but also to facilitate the green transition in Europe. The potential for export of biomethane, green hydrogen, and nuclear power from Ukraine to Europe is considerable. As Europe’s biofuel demand is expected to increase by 63 percent while Ukrainian grain exports are still proving to be challenging, biofuel production for export on the European market is a particularly likely future scenario for the Ukrainian energy market.

In summary; the Ukrainian energy sector has done remarkably well, considering the impact of the damages from the Russian aggression. As Ukrainian short-term energy priorities lie in facilitating quick and efficient responses to infrastructural damages, current measures may not be particularly environmentally friendly. However, the longer-term reconstruction of Ukraine’s energy sector has great potential for being in line with the green transition objectives.

Energy System’s Resilience in the Green Transition

Mikael Toll, Senior Advisor at Ramboll Management Consulting highlighted the importance of infrastructure resilience. He emphasized the significance of the Energy Trilemma in achieving a successful transition to greener energy systems. This trilemma implies balancing between energy security, environmental sustainability, and affordability, all representing societal goals. Focusing on the energy security aspect of this trilemma, he stressed that energy infrastructure should be part of a more holistic approach to the problem. It is essential to establish resilient supply chains and implement efficient management procedures to prevent and mitigate the negative consequences of disruptions. It entails ensuring the performant infrastructure and supply, but also fostering well-functioning markets, putting in place state-governed crisis management mechanisms, and cooperation with other states. By combining these elements, one can enhance preparedness both in normal times and during crises.

Sweden as an Example

Sweden has since long been increasing its share of renewables in the energy mix, as depicted in Figure 2. This suggests that it is relatively well-prepared to the needs of the green transition. However, electricity demand is expected to increase by 100 percent in the coming years, driven by increased electrification of the industry and transport sectors, adding pressure to Sweden’s electricity system. The need for more investments in several energy systems is tangible, and investment opportunities are numerous. However, political decisions concerning the energy system in Sweden tend to be short-sighted, even though energy infrastructures have a long lifespan – often well over 50 years. As a result, investment risks are often high and change character over time, which creates a lack of infrastructure investment. Other challenges to Sweden’s energy resilience include limited acceptance of new energy infrastructure among the public, time-consuming approval processes, and a lack of thorough impact assessment.

Figure 2. Total supplied energy in Sweden, 1970-2020.

Source: Swedish Energy Agency, 2022.

Further, the current geopolitical context creates an increased need to consider external threats – such as energy system disruptions resulting from the Russian war on Ukraine – and increased dependency on China as a key supplier of metals and batteries required for electrification. It is also important to realize that external influence may affect not only physical infrastructure but also domestic decision-making processes. This calls for more energy and political security alongside the green transition, in combination with higher readiness against security threats and a reassessment of global value chains.

In summary; to successfully move into a greener future, it is necessary to invest in energy systems and infrastructure based on a careful multi-dimensional analysis and with the support of long-sighted political decisions. At the same time, we must push investments that also consider the security threats from and dependencies on global actors.

Conclusion

This year’s Energy Talk provided an opportunity to hear from leading experts on the current situation of Europe’s energy resilience. It outlined the key challenges of the green transition in the current geopolitical and economic context. Greener solutions for Europe’s energy system will require tremendous physical efforts and investments but also political will and public understanding. There are, however, immense benefits to be realized if the associated risks are not overlooked.

On behalf of the Stockholm Institute of Transition Economics, we would like to thank Ewa Lazarczyk, Yuliya Markuts, Igor Piddubnyi and Mikael Toll for participating in this year’s Energy Talk. The presentations from the webinar can be seen here.

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.

Choosing Latvia: Understanding the Decision-Making Factors of Displaced Ukrainians

Posted on June 6, 2023 | Policy Brief

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This policy brief is based on an empirical examination of the early-stage migration of Ukrainian war asylum seekers to Latvia in 2022, following the Russian invasion. The study highlights the urgent nature of their displacement and identifies the pivotal role of kinship in Latvia in the decision-making. Three categories of refugees emerge based on kinship ties, employment opportunities, and cultural affinity. The study also reveals the substantial influence of the pre-existing Ukrainian diaspora and underlines the significance of network effects in refugees’ location decisions. Contrary to previous studies, refugees didn’t necessarily settle for the first country available. The research underscores the strategy of seeking support from personal networks in acute displacement scenarios, which appears to be the most influential factor for the choice of location in the decision-making process.

Ukrainian Displaced People in Latvia

The Russian invasion of Ukraine in 2022 triggered a geopolitical upheaval in Europe and resulted in a mass exodus that had not been witnessed since World War II. With the war showing no signs of cessation, return for many of these displaced people appears difficult in the near future. Latvia, although not a bordering country, have become a haven for 36 000 Ukrainian refugees.

This brief seeks insight into Ukrainian displaced people’s preference for Latvia, using interviews conducted in March 2022, a month after the war began. With no common border between Ukraine and Latvia these refugees had to transit through other countries, making the question about the choice of Latvia as their ultimate destination particularly relevant.

Unlike during the migration crisis in 2015 and during the recent influx of Syrians and other groups, the Ukrainian refugees found themselves being welcomed with open arms, belying Latvia’s typically guarded stance towards immigrants. This unexpected warmth is influenced by a multifaceted kinship rooted in historical connections from the Soviet era, a pre-existing Ukrainian diaspora in Latvia, labor migration, and shared cultural elements.

These factors can also play a role in Ukrainian refugees’ choice of Latvia as their ultimate destination. The study underlying this policy brief seeks to explore these facets and unravel the reasons behind the Ukrainian refugees’ choice to seek safety in Latvia.

Migration Decisions

Two aspects are crucial in the analysis of migration decisions: the factors that influence refugees’ choice of destination and the process underlying this decision.

Traditional assumptions surrounding asylum-seeker migration, as emphasized by Böcker and Havinga (1997), suggest that when people are forced to flee, their primary focus is safety – not destination. However, more nuanced perspectives have evolved in recent studies (see Robinson and Sergott, 2002; Brekke and Aarset, 2009). They highlight the calculated and adaptable nature of refugee destination choices throughout the asylum-seeking migration journey, demonstrating that circumstances and journey stage significantly influence destination choices.

Research indicates that host country policies and economic conditions can both enhance and limit refugee flows (Czaika and de Haas, 2017; Ortega and Peri, 2013; Brekke and Aarset, 2009; Diop-Christensen and Diop, 2021; Kang, 2021; Suzuki,2020; Collyer, 2005). However, another line of research emphasizes that policy and economic factors are secondary to networks, cultural affinity, language, and perceptions in determining destination choices (Robinson and Sergott, 2002). Factors such as social networks (Koser and Pinkerton, 2002; Tucker 2018), kinship (Havinga and Böcker, 1999; Neumayer, 2005; Mallett and Hagen-Zanker, 2018), financial resources (Mallett and Hagen-Zanker, 2018), geography (Neumayer, 2005; Kang, 2021), destination country image (Benzer and Zetter, 2014), culture (Suzuki, 2020), and colonial links (Havinga and Böcker, 1999) have been established to be significant at various stages of migration. Economic and education opportunities are also found to have a marginal influence on destination decision-making compared to the possibility of resolving statelessness (Tucker, 2018).

These varying determinants of destination may also be contingent on the refugee journey stage. Policies may not dominate in acute cases of forced migration (Diop-Christensen and Diop, 2021). For individuals with time to prepare for migration, a cost-benefit analysis often informs their decisions. In contrast, those in urgent circumstances, such as during the Russian invasion of Ukraine, may have to take immediate refuge and put less emphasis on benefits and policies (Robinson and Sergott, 2002). Destination determinants differ by both origin and destination countries (Havinga and Böcker, 1999, Tucker, 2018, Gilbert and Koser, 2006). Thus, research on underexplored regions and countries is valuable for a comprehensive understanding of migration patterns.

Migration, voluntary or forced, involves intricate decision-making. As Mallett and Hagen-Zanker (2018) aptly state, the dynamic experiences ‘on the road’ shape refugees’ journey and destination choices. Robinson and Sergott (2002) and Brekke and Aarset, 2009 have pioneered models for asylum seekers’ decision-making, suggesting that factors such as networks, language, cultural affinity, and perceptions evolve across different stages of the asylum journey. Others, like Gonsalves (1992) and Shultz et al. (2020), have constructed models delineating stages of refugee passage and displacement, highlighting the changing needs and preferences of refugees.

While existing literature mainly focuses on the later stages of forced migration journeys, limited empirical evidence exists on the migration moves during acute displacement. Additionally, further understanding on migration induced by the war on Ukraine is needed. There is also incomplete coverage of asylum seeker and refugee topics in the Baltic countries, making such research particularly relevant. To address these gaps, this brief aims to provide qualitative findings on the decision-making and experiences of Ukrainian displaced people in Latvia.

Understanding the Decision

The research underlying this brief explored the reasons behind Ukrainian displaced people’s choice of Latvia as their migration destination during the early part of the invasion. The study is based on 34 semi-structured, in-depth interviews with displaced people conducted in March 2022. The dataset is part of a larger study that includes continuous interviews to understand Ukrainian displaced people’s lives, plans and needs in Latvia.

From the interviews, it was apparent that the predominant factor in respondents’ decision-making was the presence of kin or acquaintances in Latvia.

All but one participant had some connection to Latvia, whether through distant relatives, friends, or professional contacts. The one participant without such connections arrived from Russia and not from Ukraine, working on a contract. A minority of our participants considered staying in Ukraine. One example is Lidiia, who initially planned to move near Lviv, but redirected to Riga during the journey.

“She found a family that would host us, 100 km from Lviv… We agreed, but then our friends… called us on the way, we were leaving Kyiv under bombardment. Our train was delayed because of the air alarm. When we just arrived there, a shell exploded above the railway station… And on the way, friends from Riga called us and invited us: ‘Come, everyone will help here’. Therefore, everything changed while we were on the train, we decided everything“ (Lidiia).

Proximity of kin was not the primary concern for the interviewees; the mere fact that they had a relative in Latvia appeared more influential in their narratives. Indeed, the majority of participants had distant rather than close kin, though a few had close family in Latvia (grandparents, parents, common-law husband, and sister). As Olena explained, the presence of even distant relatives influenced her choice: “there are distant relatives, very distant… That’s why we came” (Olena). However, ties in Latvia were not the only determinants as many of the participants also had family connections in other parts of Europe.

The speed of decision-making was also striking – most decisions to migrate were not a matter of long-term planning but a reaction to the sudden crisis, often influenced by incoming offers of assistance. Nataliia remembered: “My mother said, ‘You have to leave because everything is so fatally bad. Take the children and leave.’ And literally overnight I packed up, bought the tickets. But first I went to Poland, to my brother” (Nataliia).

Maryana ended up choosing her destination only after leaving home. “At first, we thought to go to Poland, but it is completely crowded, and then we called to whoever we could. There are no relatives in other countries. No, there are relatives in other cities, but these are Luhansk, Donetsk, we are from Slobozhanska Ukraine, so all our relatives are from the side where very heavy fighting is going on now“ (Maryana). Such testimonies illuminate how, owing to the immediacy of the situation, the eventual destination of some displaced Ukrainians was not predetermined but evolved during their respective journeys.

From the interviews with the participants who knew someone in Latvia, one can identify three groups based on the main factor that determined their decision.

Network, First of All

For respondents who did not have family in Latvia, friends, acquaintances, and professional contacts in Latvia acted as anchors. Like family members, such acquaintances often reached out, offering assistance and lodging as soon as they heard the news of the war. The influx of supportive communication from Latvian acquaintances influenced the decision for many participants.

Olha decided to flee with her friend, who had a distant cousin residing in Latvia. Upon the onset of the conflict, the cousin reached out and urged them to come to Latvia. As Olha recalls: “As soon as she heard that there was a bombing in Kharkiv, she said, ‘Come’. My friend, with whom I came, Lesya, does not have a car, so she immediately told me… let’s run away’” (Olha).

Lidiia received an invitation from a Latvian friend she had met through her church, even as she was already in the process of fleeing Ukraine. Similarly, Andrii, who was vacationing abroad at the time of the war’s outbreak, remembered: “On the 25th our best friend wrote to us that, ‘There is housing, come here’ and we began to negotiate with the embassy to fly here” (Andrii).

Even in the absence of explicit messages, displaced individuals recalled having friends and family in Latvia and chose to make their way to Riga. Olena, like Lidiia, initially set off without a clear destination in mind. It wasn’t until she reached the border that she decided to head to Latvia: “Just at the border that you decided where to go?” (Olena).

Existing friendships and ongoing communication also influenced some people’s choice to opt for Latvia. Olha (2) was encouraged by her daughter to relocate to Riga due to her daughter’s friendships with Latvians that she had formed at a camp in Estonia: “Friends appeared, with whom she was in close contact for six months. That’s why for her there was no choice at all ‘Where?’. She immediately said: ‘To Riga’” (Olha (2)).

Opportunities and Realities

The turning point for many respondents was their arrival in Poland as, initially, Latvia was not the principal or only choice of destination. These respondents emphasized that, besides having friends and relatives in Latvia, they also contemplated where they might find better opportunities. Their narratives provide a contrasting perspective of Poland and Latvia. While traversing Poland, their general impression was that the country was already ‘overfilled’, which in turn kindled the notion that Latvia might harbor more possibilities. For this group of displaced individuals, the importance of employment prospects was paramount.

Nataliia took the decision to head for Latvia, choosing to stay with remote kin there rather than with her sibling in Poland, as she believed Poland lacked opportunities for her. In Myroslava’s case, a friend helped secure a job in Latvia: “We didn’t choose Latvia for any particular reason – better or worse, we didn’t care. We needed somewhere to stay, somewhere to work in order to live. Well, that’s why when a job turned up through acquaintances, they said that a person was needed here, we immediately gathered. Could not be found in Poland. In Poland, there was simply no work, no housing” (Myroslava).

Bohdan, too, mentioned the crowdedness and the high cost of living in Poland, hence deciding to move further north to Latvia: “We didn’t have a specific plan because we weren’t at all sure we would succeed. In general, my wife benefits from going to Poland, she works for an IT company operating in Poland. And we thought about getting there at first, but when we got to Poland, everything was already full. There were such expensive options, $1600 a month, we were shocked” (Bohdan).

Anastasiia echoed similar concerns: “We arrived in Warsaw, reunited there and tried to stay in Warsaw and look for a place, but there are a lot of people there, and there is no place to live, very… food, maybe cheaper than in Latvia, but there is no place to live… no place to work. And I would like to work somehow… not to be dependent” (Anastasiia).

These stories illuminate another stratum of decision-making, that beyond familial ties, participants also considered the opportunities available at their chosen destination. They accumulate information on their journey and recalibrate their destination accordingly.

Cultural Kinship, Language, Diaspora

Not all participants had prior personal experience with Latvia, even if they had relatives there. A lot of their understanding about the country stemmed from stories they’d heard or news they’d come across. This third group of participants decided on Latvia not only because they knew someone in the country, but also because they saw value in shared language, culture, and history.

Political and cultural connections played a significant role in their choice. Being able to communicate in Russian and Ukrainian in Latvia was a crucial factor, as it was associated with a smoother integration process and increased job opportunities. Nadiia, who traveled to Latvia via Poland and Budapest, elaborated on this: “And I was in Latvia and here there is an opportunity to communicate in Ukrainian, in Russian” (Nadiia).

The possibility of being accepted and integrated into the local community was also mentioned as a decision-driver. Oksana shared that her father, who had previously worked in Riga, advised her to go to Latvia: “you guys, probably go to Riga, well, because you will be accepted there, accommodated” (Oksana).

Nonetheless, choosing Latvia because of the possibility to communicate in Russian does not come without complications. Nataliia B., for instance, found the topic of language stirring up strong emotions and confessed that she doesn’t wish to speak Russian anymore: “I had such a psychological reaction – I didn’t speak Ukrainian for many years, and when all these events began, I read, I remember well how I woke up in the morning and began to speak Ukrainian. My thoughts have become Ukrainian” (Nataliia B.).

Moreover, having knowledge of the Ukrainian diaspora in the country also proved an important factor. “I also found out that there is a Ukrainian diaspora in Latvia of about 50 000 people, as I heard in the Latvian news. And this also encouraged me, I realised that I could find help from my compatriots” (Nadiia). This observation underlines the role of cultural kinship in the decision-making process regarding destination, and it can indeed be seen as a decisive factor. As the diaspora expands with the influx of more displaced people, this rationale for choosing Latvia may become increasingly common.

Conclusion

The study underlying this brief provided empirical insight into the initial phases of Ukrainian war asylum seekers’ journey to Latvia in 2022, enhancing our understanding of the factors that influenced the choice of Latvia over other destinations.

Ukrainians fleeing the early stage of the 2022 Russian invasion were compelled to make swift and difficult decisions due to the pressing crisis. Leaving behind their familiar lives, properties, and dear ones – often the very individuals facilitating their exodus for safety reasons – was a harrowing reality. The support from kin and acquaintances in Latvia was crucial in endorsing their decision to seek refuge in the country.

Three groups emerged among the Ukrainian refugees in Latvia, all connected by personal relationships to some degree. The factors influencing their migration ranged from the presence of kin and considerations of employment prospects, to shared language, culture, and history. The fact that the initial outreach usually originated from the Latvian side underscores the profound solidarity and active support provided by Latvians to their Ukrainian counterparts. This likely also played a significant role in the refugees’ decisions. The pre-existing Ukrainian diaspora in Latvia, estimated at around 50 000 before the invasion, also significantly influenced the choice of Latvia as a refuge.

Financially-related factors such as seeking benefits were largely absent from the narratives, likely due to the geographic proximity, relatively low costs, and the urgent nature of the displacement. The most significant determinant in choosing Latvia as the destination appeared to be the network effect, contrasting with Robinson and Sergott (2002) findings that acute asylum seekers often settle for the first country available.

Given the emergency nature of the displacement, no unambiguous pattern in the location decision could be established. The narrative varied considerably among respondents with decisions often being made, or altered, on the fly. However, in most cases, personal relationships played a primary role in shaping the choices among Ukrainian refugees in Latvia.

For policy-makers planning and responding to acute migration crises, the study highlights the importance of mapping and understanding multifaceted kinships, as well as culture and history. The mapping can be used to plan support and allocate resources to give displaced people an opportunity of a place where they feel welcomed and connected, with hopes of greater integration.

References

  • Böcker, A. and Havinga, T. (1997). Asylum Migration to the European Union: Patterns of Origin and Destination, Luxembourg: Office for Official Publications of the European Communities.
  • Brekke, J. P. and Aarset, M. F. (2009). Why Norway? Understanding Asylum Destinations, Institute for Social Research, Oslo.
  • Collyer, M. (2005). When do social networks fail to explain migration? Accounting for the movement of Algerian asylum-seekers to the UK. Journal of Ethnic and Migration Studies, 31(4), 699-718.
  • Czaika, M. and de Haas, H. (2017). The effect of visas on migration processes. International Migration Review, 51(4), 893-926.
  • Diop-Christensen, A. and Diop, L. E. (2021). What do asylum seekers prioritise—safety or welfare benefits? The influence of policies on asylum flows to the EU15 countries. Journal of Refugee Studies.
  • Gilbert, A. and Koser, K. (2006). Coming to the UK: what do asylum-seekers know about the UK before arrival? Journal of ethnic and migration studies, 32(7), 1209-1225.
  • Gonsalves, C. J. (1992). Psychological stages of the refugee process: A model for therapeutic interventions. Professional Psychology: Research and Practice, 23(5), 382.
  • Havinga, T. and Böcker, A. (1999). Country of asylum by choice or by chance: Asylum‐seekers in Belgium, the Netherlands and the UK. Journal of ethnic and migration studies, 25(1), 43-61.
  • Kang, Y. D. (2021). Refugee crisis in Europe: determinants of asylum seeking in European countries from 2008–2014. Journal of European Integration, 43(1), 33-48.
  • Koser, K. and Pinkerton, C. (2002). The social networks of asylum seekers and the dissemination of information about countries of asylum.
  • Mallett, R., & Hagen-Zanker, J. (2018). Forced migration trajectories: An analysis of journey-and decision-making among Eritrean and Syrian arrivals to Europe. Migration and Development, 7(3), 341-351.
  • Neumayer, E. (2005). Bogus refugees? The determinants of asylum migration to Western Europe. International studies quarterly, 49(3), 389-409.
  • Neumayer, E. (2004). Asylum destination choice: what makes some West European countries more attractive than others? European Union Politics, 5(2), 155-180.
  • Ortega, F., and Peri, G. (2013). The effect of income and immigration policies on international migration. Migration Studies, 1(1), 47-74.
  • Robinson, V., and Segrott, J. (2002). Understanding the decision-making of asylum seekers (Vol. 12). London: Home Office.
  • Shultz, C., Barrios, A., Krasnikov, A. V., Becker, I., Bennett, A. M., Emile, R., Hokkinen, M., Pennington, J. R., Santos, M., and Sierra, J. (2020). The Global Refugee Crisis: Pathway for a More Humanitarian Solution. Journal of Macromarketing, 40(1), 128–143.
  • Suzuki, T. (2020). Destination choice of asylum applicants in Europe from three conflict-affected countries. Migration and Development, 1-13.
  • Tucker, J. (2018). Why here? Factors influencing Palestinian refugees from Syria in choosing Germany or Sweden as asylum destinations. Comparative migration studies, 6(1), 1-17.

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.

Democracy in the Eye of the Beholder?

Posted on May 29, 2023 | Policy Brief

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There is growing concern that democratic institutions in Eastern Europe are fragile. This brief compares two perspectives on the state of democracy: expert assessments and surveys of the general population. We show that while experts’ perception of some countries’ institutions has worsened in recent years, voters are increasingly satisfied with their own democracies. This trend is broad-based, encompassing almost all new EU member states and all age groups. We provide evidence that over time, survey respondents’ assessment of democracy has become more closely tied to the outcome of elections rather than actual institutional change. Where governments have imposed restrictions on media freedom or judicial independence, their supporters continue to report high levels of satisfaction with the way democracy works.

“Across the world, democracy is backsliding”

UN’s Secretary-General António Guterres, 2022

In recent years, the prevailing narrative around democracy in Eastern Europe has been negative. The reform momentum that propelled countries towards EU membership has not been sustained after accession. Discussions of global democratic backsliding frequently cite countries from the region as examples (Grillo and Prato, 2023; Chiopris et al., 2021; Mechkova et al., 2017). Following restrictions on judicial independence and media freedom, some new EU members have seen their ratings slide on indices that measure the quality of democratic institutions based on expert opinions. This brief contrasts these expert assessments with a different perspective on the state of democracy: that of the voters themselves.

Data from Eurobarometer surveys show that satisfaction with ‘the way democracy works in our country’ has been increasing in the new EU member states. This upward trend is visible for all age groups and in almost all countries – including those where experts’ assessment of democracy has worsened. We document patterns in the data that may help to explain this divergence. Survey responses increasingly reflect an instrumentalist view of democracy; respondents who are aligned politically with the winning party are more likely to feel that democracy is working well. This trend can be observed across the EU, but it is most pronounced in the new EU member states where the governing parties are right-of-centre.

Perceptions of Democracy

Expert Assessments

The quality of democracy is hard to measure. A range of indices classify countries by regime type or provide numerical ratings of institutional quality (the Polity, V-Dem, and Freedom House measures are among the most prominent). These indices have somewhat different objectives and methodologies, but they all rely on subjective judgements by expert coders.

Some academic research casts doubt on the prevailing narrative of a global phenomenon of democratic backsliding. For instance, Treisman (2023) and Lueders and Lust (2018) show that there is little consensus across indices, both in terms of individual countries and the global trend. A recent paper by Little and Meng (2023) contrasts subjective indices with more objective indicators of democratic health (e.g. the rate at which incumbents lose elections). The authors find no evidence for global democratic backsliding using the objective measures and suggest that the pessimistic narratives around democracy may have biased coders’ assessment.

There is less disagreement about the development of democracy in Eastern Europe. Treisman (2023) cites Hungary as the only example of a country that has recently been downgraded both from the status of “liberal democracy” by V-Dem and “free state“ by Freedom House. Little and Meng (2023) highlight three cases where both objective and subjective measures indicate backsliding: Hungary and Poland (as well as Venezuela). Further, Becker (2019) shows that downgrades to V-Dem democracy scores in Bulgaria, Czechia, Hungary, Poland, and Romania are relatively broad-based, driven by declines across multiple sub-categories including freedom of expression and constraints on the executive.

Surveys of Public Opinion

We use individual-level data from the Eurobarometer – a survey of public opinion in the EU Member States and candidate countries conducted by the European Commission. The surveys are conducted at an approximately monthly frequency and comprise of a representative sample (about 1000 face-to-face interviews) for each state. We combine data from 42 surveys, spanning 20 years (2002 to 2022), with a total of 1.3 million respondents. The main question we are interested in is: “On the whole are you very satisfied, rather satisfied, not very satisfied or not at all satisfied with the way democracy works in [our country]?”

At the beginning of the sample period in 2002, around a third of respondents in Eastern European EU countries were satisfied with their respective democracies compared to close to twice as many respondents in Western Europe (Figure 1). Over the past 20 years, the share of Eastern Europeans satisfied with their democracy has grown to around 50 percent, narrowing the gap with Western Europe. Figure 2 shows that this pattern is broad based across age groups. All cohorts of Eastern Europeans are more satisfied with democracy than earlier generations and among the youngest respondents, satisfaction is almost as high as in Western Europe.

Figure 1. Satisfaction with Democracy vs V-Dem Score.

Source: Eurobarometer, V-Dem and authors’ calculations.

Figure 2. Satisfaction with Democracy by Age Group.

Notes: Each point shows the sample mean for a single year cohort. 95 percent confidence intervals in grey.
Source: Eurobarometer, authors’ calculations.

Figure 1 also shows a stark divergence in expert assessment of the state of democracy in Eastern Europe compared to public opinion in the same countries. While the V-Dem democracy scores for Eastern Europe have declined rapidly since the mid-2010s, average satisfaction with the own country’s democracy has increased. A much smaller gap between these two measures has also started to open up in Western Europe over the past couple of years.

In Figure 3, we show the same patterns of satisfaction with democracy and expert opinions for individual countries. Satisfaction with one’s own democracy has increased in almost all Eastern European countries, including in Poland and Hungary which at the same time showed the largest declines in democracy scores.

Figure 3. Satisfaction with Democracy vs V-Dem Score by Country.

Source: Eurobarometer, V-Dem and authors’ calculations.

This divergence in individual survey responses and expert assessments is not altogether surprising. First, the Eurobarometer surveys a sample of the population in each country, while V-Dem (and most other similar democracy indices) relies on country experts. Another likely explanation for the difference is the interpretation of the question. Democracy ratings tend to emphasise institutional aspects of a democracy, for instance, the V-Dem liberal democracy index is designed to capture rule of law and checks on executive power (see, e.g., Becker, 2019). In contrast, the survey responses are likely to reflect both satisfaction with the state of democracy in a country, as well as the outcomes of that democracy.

Satisfaction with Democracy and Political Alignment

In this section, we investigate whether stated satisfaction with democracy depends on the outcomes of elections and the political ideology of the respondents. A common way of measuring political ideology is the placement on a right-left scale, where the right favours a free-market economy and traditional values while the left favours economic redistribution and socially progressive policies. We compare the right-left placement of each country’s governing party as coded by the Chapel Hill Expert Survey (CHES), with the self-identified right-left placement of Eurobarometer respondents. We calculate the ideological distance from the government as the absolute difference between these two scores.

Figure 4. Relationship Between Ideological Distance from Government and Satisfaction with Democracy.

Source: Eurobarometer, Döring, Huber and Manow (2022) and authors’ calculations.
Notes: Each point shows the coefficient from a separate regression of satisfaction with democracy on ideological distance from government, age, gender, year fixed effects and country fixed effects. 95 percent confidence intervals in grey. Coefficient estimates for Eastern and Western EU overlap on the chart for 2019 and 2020.

We find that people are on average less satisfied with their country’s democracy when they are ideologically further from the parties in government (Figure 4). This is consistent with prior evidence (Anderson and Guillory, 1997; Ezrow and Xezonakis, 2011). The alignment effect has become stronger over time – even when taking into account average satisfaction levels for each country and demographic characteristics of the respondents, such as their age and gender. In the past three years, political alignment with the government has become a major factor in explaining satisfaction with democracy, especially in Eastern Europe. Svolik (2019) suggests that voters trade off democratic principles and partisan interests. As political polarisation increases, voters become more willing to accept a government that undermines democratic institutions, as long as it is on ‘their side’ ideologically.

Figure 5. Satisfaction with Democracy and Political Ideology. Western Europe in the Left Panel and Eastern Europe in the Right Panel.

Source: Eurobarometer, Döring, Huber and Manow (2022) and authors’ calculations.
Notes: Respondents with the most left-leaning ideology are at the extreme left of the x-axis, those with the most right-leaning ideology are at the extreme right. The sample covers the period 2002 to 2022 and excludes observations where the government is coded as centrist (scores of 5-6 in the CHES data). 95 percent confidence intervals in grey.

In Figure 5, we break down the effect of political alignment on satisfaction with democracy according to individuals’ political leanings. On the x-axis is the respondents’ left-right placement and on the y-axis there are two series of dots showing satisfaction with democracy depending on whether the government is left of centre (lighter coloured dots) or right of centre (darker coloured dots). As before, being politically aligned with the government increases satisfaction, that is, to the left of the chart, the lighter coloured dots are placed higher than the darker coloured dots and vice versa for the right of the chart. The further from centre a person’s political leanings, the less satisfied they are with a government of the opposite ideology. There is also some evidence of asymmetry across the political spectrum in Eastern Europe, with respondents on the political right reporting much higher levels of satisfaction with right-wing governments compared to voters on the left under a left-wing government.

Conclusion

Over the past decade, there has been increasing concern over democratic backsliding in some of the Eastern European countries that are members of the EU. This is reflected in commonly used democracy indices whose country experts note the worrying trends in countries’ institutions – such as the reduction of freedom of expression, the strengthening of rule of law and constraints on the executive, all hallmarks of a liberal democracy. In this policy brief, we investigate whether this erosion of institutional safeguards affects people’s stated satisfaction with democracy in one’s respective country. We find a broad-based increase in satisfaction with democracy in the Eastern European EU countries, including in the countries that have seen some of the largest declines in liberal democracy ratings. We show that stated satisfaction with democracy reflects less the institutional changes in countries, but more the outcome of democratic elections. Voters who are politically aligned with their government are systematically more likely to report that they are satisfied with the state of democracy in their country. And this effect has become stronger in the most recent years, particularly in the Eastern European EU countries. We also find that this effect is not symmetric across the political spectrum. In the Eastern European EU countries, respondents on the political right are more satisfied with right-wing governments than those on the left are with left-wing governments.

The descriptive patterns outlined in this policy brief illustrate a worrying disconnect in the minds of many voters between institutions and outcomes of the democratic process. The threat of democratic backsliding in Europe and across the globe is predominantly not due to electoral democracies being replaced by autocratic regimes. Rather, genuinely popular (and often populist) governments are democratically elected and, once in power, proceed to undermine and dismantle liberal democratic institutions, such as a free press, an independent judiciary, and a fair electoral system. This process in turn makes it more difficult for opposition parties to win future elections, further cementing the power of the rulers of these illiberal democracies. While the electorate might support these governments now, voters need to be aware that these liberal institutions are designed to safeguard their democratic future.

References

  • Anderson, C. J. and Guillory, C. A. (1997). Political institutions and satisfaction with democracy: A cross-national analysis of consensus and majoritarian systems. American Political Science Review, 91(1), pp.66-81.
  • Becker, T. (2019). Liberal Democracy in Transition – The First 30 Years. FREE Policy Brief.
  • Chiopris, C., Nalepa, M. and Vanberg, G. (2021). A wolf in sheep’s clothing: Citizen uncertainty and democratic backsliding. Working Paper.
  • Döring, H., Huber, C. and Manow, P. (2022). ParlGov 2022 Release. Harvard Dataverse. https://doi.org/10.7910/DVN/UKILBE
  • Eurobarometer (multiple waves: 2002-2022), European Commission. Brussels
  • Ezrow, L. and Xezonakis, G. (2011). Citizen satisfaction with democracy and parties’ policy offerings. Comparative Political Studies, 44(9), pp.1152-1178.
  • Grillo, E. and Prato, C. (2023). Reference points and democratic backsliding. American Journal of Political Science, 67(1), pp.71-88.
  • Little, A. and Meng, A. (2023). Subjective and Objective Measurement of Democratic Backsliding. Available at SSRN 4327307.
  • Lueders, H. and Lust, E. (2018). Multiple measurements, elusive agreement, and unstable outcomes in the study of regime change. The Journal of Politics, 80(2), pp.736-741.
  • Mechkova, V., Luhrmann, A. and Lindberg, S. I. (2017). How much democratic backsliding?. Journal of. Democracy, 28, pp.162-169.
  • Svolik, M. W. (2019). Polarization versus democracy. Journal of Democracy, 30(3), pp.20-32.
  • Treisman, D. (2023). How great is the current danger to democracy? assessing the risk with historical data. Comparative Political Studies, https://doi.org/10.1177/00104140231168363.

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.

Environmental Enforcement in the EU: Insights from Administrative Cases in the US

Posted on May 23, 2023 | Policy Brief

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In March 2023, the European Parliament’s legal affairs committee voted unanimously in favor of a proposed update to the EU Directive on environmental crimes (Directive 2008/99/EC). The update seeks to step up enforcement of environmental legislation across Members States through criminal law aimed at severely punishing very serious environmental offenses. We argue that, while laudable in its goal of strengthening enforcement of environmental regulation at the EU level, the current effort might be insufficient since moderately serious offenses might remain largely unpunished. To address this shortcoming, we propose harmonizing administrative law as well. We consider additional benefits from relying on administrative law in terms of flexibility of punishment design, based on the US experience of using environmentally beneficial projects performed in affected areas as a form of punishment in administrative environmental settlements. We discuss evidence on the merits and potential limitations of the US approach based on Campa and Muehlenbachs (2022) and conclude that such an approach is worth considering in the EU context.

While the EU has set aggressive pollution reduction targets across its Member States (European Commission, 2021a), for example pledging to reduce deaths due to particulate matters to 55 percent of 2005 levels by 2030 (European Commission, 2023a), much work remains to be done. As documented in Lehne (2021), in 2020 all countries in Europe reported PM2.5 concentrations above the World Health Organization (WHO) guideline of 5mg/m3. Six countries, including three EU Member States (Italy, Croatia, and Poland) reported levels above the EU’s annual limit value of 25mg/m3. Further, Bulgaria, Poland, Portugal, Croatia, and Romania did not meet national targets for PM2.5 reduction (European Environment Agency, 2023). Main contributors to PM2.5 pollution are transportation and industrial activity, including energy production. High concentrations of these particles are known to increase physical and mental health risks (Persico, 2022; Persico et al., 2016), and risk of premature deaths (Fuller et al., 2022).

Environmental concerns across EU Member States are also not limited to air pollution. Across the EU, 28 percent of groundwater sources are affected by pollution from agriculture, 14 percent from industrial contamination, and 7.5 percent from mining waste (Kampa et al., 2021). The persistent pollution problems in the EU and their unequal distribution across regions despite growing EU-level environmental legislation underscores the importance of law enforcement. While all EU Member States are theoretically subject to the same overarching environmental standards and regulations, the enforcement of environmental laws differs widely across countries. To address this issue, the EU Commission (henceforth EC) has recently taken steps to further harmonize environmental enforcement across EU Member States.

In this brief we consider the EC’s proposal and argue that, while commendable in the goal of strengthening enforcement of environmental regulation at the EU level, it is also quite limited in terms of enforcement tools that it considers. Specifically, we discuss potential advantages of leveraging administrative law tools to enforce environmental regulation, whereas the EC approach is currently focused on criminal law. We consider the higher probability of prosecution and the enhanced flexibility in the type of penalties allowed by administrative enforcement actions. Finally, we discuss results from Campa and Muehlenbachs (2022), which studies the use of administrative penalties for environmental violations in the US and draws some lessons for environmental enforcement in other jurisdictions.

Strengthening Environmental Enforcement at the EU Level

While environmental regulation is a shared competence of the EU, enforcement has historically been left to national environmental authorities (European Parliament, 2016). In the face of a lack of institutional capacity at the national level, a result of this arrangement are generally low levels of environmental enforcement, widely heterogeneous across Member States (Mazur, 2011). EU institutions have tried unsuccessfully over time to address this challenge and harmonize enforcement across EU Member States. An early attempt was made in 2001, when the EU put in place minimum standards for environmental inspections that Member States carry out, though these were only non-binding guidelines, and Member States could not be sanctioned for flouting them (European Parliament, 2001). Mandatory standards were then introduced in 2008, with the EU Directive on environmental crimes (Directive 2008/99/EC), which forced national governments to apply criminal sanctions to those causing “substantial damage” to the environment. However, it has typically been difficult for the EC to sanction non-abiding Member States. Moreover, the obligation is limited to areas where the EU has competence and does not include minimum penalties.

In another attempt to step up their enforcement efforts, in 2016 the EC began publishing the annual Environmental Implementation Review, where each country is evaluated on its environmental affairs and enforcement (European Commission, 2023b). Although this does not improve the EC’s ability to efficiently sanction Member States, it does increase scrutiny and visibility. In 2021, the EC tabled a proposal to update the 2008 Directive on environmental crimes (European Commission, 2021b). The proposal acknowledged the insufficient number of environmental criminal cases successfully investigated and prosecuted as well as the large discrepancies in the transposition of the 2008 Directive across Member States. Against this background, the EC proposed to enlarge the scope of the 2008 Directive, establish minimum penalties, foster cross-border investigation and prosecution, and promote data collection and dissemination on criminal enforcement actions. In March 2023, the European Parliament’s legal affairs committee voted in support of the EC proposal, extending the list of offenses that would be criminally charged and increasing the size of the minimum penalties.

Environmental Enforcement, Administrative Law and “In-kind” Punishment

The efforts of EU institutions to improve and harmonize enforcement are exclusively focused on criminal law instruments. The EC’s 2021 proposal specifically links poor enforcement in Member States to their reliance on administrative law, which limits fines and thus allegedly reduces the deterrence value of enforcement actions. Indeed, sufficiently high fines are considered crucial to deter future violations (see, e.g., Aguzzoni et al., 2013). However, we argue that reliance on administrative law also has some advantages. In particular, we consider two potential benefits of administrative law based on existing studies, namely higher probability of case initiation and more flexibility in terms of penalty design.

Probability of Case Initiation

One of the shortcomings of the current enforcement framework highlighted by the EC is the very low number of environmental criminal cases that are ultimately prosecuted. Research on enforcement tends to link the low frequency of observed criminal cases to the high cost of criminal proceedings, especially relative to more informal administrative procedures (Faure and Svatikova, 2012). The cost dimension is especially relevant for cases that are moderately serious, but that nevertheless in aggregate contribute significantly to environmental degradation. The probability of catching violations is also relevant, together with the size of the penalty. A very large penalty for a criminal case that is highly unlikely to be prosecuted might be less deterring than a moderate penalty associated with very high probability of prosecution.

“In-kind” Penalties

Federal environmental regulations in the US are enforced through a combination of administrative and criminal law. The Environmental Protection Agency (EPA) initiates administrative cases or refers them to the Department of Justice when the gravity of the violation is large. Administrative cases result in settlements where the defendant can be ordered to pay a fine, which can vary from a few thousand to a few million dollars and which is determined according to various factors, such as the magnitude of environmental harm, the firm’s economic gain from violation, its violation history, and its ability to pay. Additionally, when a fine is established, defendants are given the opportunity to volunteer to pay for an environmentally beneficial project in the affected area. The EPA encourages these projects especially in areas subject to environmental justice concerns, namely those characterized by a large share of minority and low-income households.

Campa and Muehlenbachs (2022) study the implications of using these projects in environmental enforcement cases in the US. The study reveals a large preference among the public for this “in-kind” form of penalty versus traditional fines, based on a survey of US residents. Moreover, a randomized survey experiment reveals that these environmental projects elevate the profile of the firm among the public as compared to a firm that only pays a fine, even when the penalties stem from the same violation. Similarly, the stock-market response to the announcement of these projects is positive, whereas announcing a settlement with a large penalty causes a drop in the stock-market price of the defendant. In terms of implications for environmental justice, the data analysis shows that the whitest and richest communities are the most likely to receive these projects, but the second largest share goes to communities where there are highest concentrations of minorities and low-income households.

Overall, the study finds that punishing firms through environmental projects can be beneficial for political economy reasons, given the large preference for this enforcement tool among the public and likely among firms, since firms seem to benefit from undertaking the projects. Moreover, while the targeting of environmental justice communities in the US is not perfect, tweaking the US arrangement could guarantee that the projects predominantly benefit those communities most harmed by environmental violations.

For EU adoption of environmental projects enforcement, a caveat is that the perception of these projects might be different among the public in the EU. Nonetheless, large-scale surveys modelled on those presented in Campa and Muehlenbachs (2022) can help in understanding public views in different regions. Moreover, the paper emphasizes that on the one hand, by benefiting defendants, the environmental projects might ultimately be a more lenient punishment than fines, with implications for deterrence and future environmental quality. On the other hand, environmental quality might also improve as a direct effect of the projects being implemented and due to improved monitoring in affected communities (Dimitri et al., 2006). Overall, the study finds that future environmental quality might be more likely to improve following fines rather than environmental projects. However, it cautions the reader on data limitations that causes the result to not be conclusive enough and calls for further research.

Conclusion

The persistence of environmental problems in the EU, as well as the striking differences in pollution levels across EU Member States, underscores the need for more and better environmental regulation. However, even in the presence of comprehensive and strict environmental rules, the protection of the environment is still inadequate if a proper enforcement mechanism is not in place. As observed in OECD (2009), proper enforcement ensures deterrence. Successful deterrence provides the best protection for the environment, while reducing the resources necessary to administer laws by addressing non-compliance before it occurs. EU institutions have recently taken important steps to improve and further harmonize enforcement of environmental regulation across Member States, with proposed updates to the existing Directive on the matter scheduled for Member-State discussion in upcoming months.

Specifically, the EU is seeking to step up the use of criminal law to prosecute environmental offenses across Member States, with mandatory penalties and increased cross-border coordination. We argue that the focus on criminal law has some drawbacks, which could be addressed by also harmonizing administrative enforcement across EU Member States. Researchers have previously argued that reliance on administrative law might increase the likelihood that offenses are investigated and prosecuted. We also present evidence from the use of administrative law in the US, where defendants in environmental cases can settle to pay part of their penalty “in-kind”, i.e. by performing environmental projects in areas affected by the alleged violations. The evidence suggests that the use of these projects is worth considering in other jurisdictions, including the EU, because they might be preferred by the public and could help addressing environmental justice concerns. An important caveat is that their implications for environmental protection are not clear, and more research should address this important aspect. On the subject, the existing evidence on environmental enforcement in the US, such as that presented in Campa and Muehlenbachs (2022), is established thanks to the availability of rich data sources kept by the US’ EPA. The EC’s recent proposal to systematically collect and disseminate data on environmental crimes is thus particularly welcome and should not be overlooked in the upcoming negotiations with Member States on the final content of the proposed Directive.

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.

Potential Climate Change Impacts on Women’s Vulnerability in Georgia

Posted on May 8, 2023 | Policy Brief

20230508 Potential Climate Change Poster 02

Climate change can increase the vulnerability of women to various risks, including natural disasters, food insecurity, water scarcity, and health problems. Women may also face unique challenges in accessing resources and services, which can limit their ability to adapt to a changing climate. Developing countries, with their more traditional gender roles, are even more likely to experience disproportionate impacts of climate change on women, and Georgia is no exception. Thus, the country needs to address this problem through a comprehensive approach which accounts for the social, economic, and environmental factors that contribute to gender inequality.

Introduction

According to Georgia’s fourth national communication report to the United Nation’s Framework Convention on Climate Change, the negative impacts of climate change on ecosystems and the economy can hinder Georgia’s path toward sustainable development. Therefore, a key focus for the country should be to develop climate-resilient practices and reduce the vulnerability of communities exposed to these impacts.

The climate scenarios in the communication report present a worrying picture of warming trends in the country, mainly due to increased temperatures in the last summer and autumn seasons, as depicted in Figure 1 (MEPA, 2021). Such alterations in weather patterns often lead to glacier retreat, water scarcity, coastal erosion, and biodiversity loss in different regions of Georgia (ibid).

Figure 1. Average summer and winter temperatures in Georgia, 1900-2021.

Source: Climate Change Knowledge Portal (World Bank, 2021).

An increasing body of international research has demonstrated that climate change can have adverse effects on agricultural production, food security, water management, and public health. Furthermore, research has revealed that these effects are not gender-neutral, with women and children being among the most affected groups (World Bank Group, 2021).

Climate Change Impacts on Women – A Georgian Perspective

Women in developing countries like Georgia experience various impacts of climate change, which affect them differently than men. The effects might vary according to region or community, but some common signs can be identified. The main channels through which women are disproportionally affected by climate change are discussed in the following sub-sections.

Health Impacts

Climate change has a significant effect on human health, with women being more vulnerable due to various cultural, social, and economic factors (Sbiroli et al., 2022). In particular, women appear to be more susceptible to infectious diseases and undernutrition, especially in middle and low-income countries (ibid).

Springmann et al. (2016) found that, by 2050, Georgia could experience about 32.36 climate-related deaths per million due to malnutrition caused by a lack of fruits and vegetables in people’s diets and due to increased health complications associated with undernutrition. In Georgia, malnutrition is a significant gender equality concern. According to the Global Nutrition Report, women in Georgia disproportionally experience exposure to undernutrition translated into underweight. Similarly, women represent the majority of Georgians with obesity (26.8 percent, compared to 22.2 percent among men). Both these issues may be further exacerbated by climate change in the future.

Furthermore, in Georgia, women are more likely to care for sick family members. According to Geostat, 31 percent of women who have sick or dependent family members are involved in providing them care, compared to only 15 percent of the men. This puts women at greater risk of exposure to climate change-induced infectious diseases, given that research has demonstrated an increased risk of such diseases worldwide, including in areas in Europe that have climate profiles similar to Georgia (Mora et al., 2022; Gray et al., 2009).

Figure 2. Prevalence of underweight among adults (>18) in Georgia, 2000-2016.

Source: Global Nutrition Report (2023).

Water and Food Scarcity

Climate change is also known to affect food and water supply through changes in agricultural conditions, droughts, and floods. In developing countries as women are often responsible for food and water supply, they are disproportionally affected by water shortages resulting from climate change (Figueiredo & Perkins, 2013). Women in poor rural households in Georgia are likely to face similar challenges.

Women in Georgia also play a crucial role in agriculture (according to Geostat, 47 percent of workers in agricultural holdings were women in 2021). Fluctuations in temperature and precipitation patterns can reduce crop yields, leading to lower income and food insecurity. This may disproportionately affect female farmers, as access to agricultural technologies, land ownership and lack of necessary knowledge and skills are some of the significant barriers for women involved in agriculture in Georgia (Gamisonia, 2015).

Economic Impacts and Access to Resources

One of the main reasons to why women are disproportionally affected by climate change is that their underlying economic conditions are less favourable than men’s (Yadav & Lal, 2018). In 2021, the majority of people outside the labor force were women (65 percent), while men constituted 35 percent (Geostat). It is important to mention that in the same year, only 33 percent of women were employed in Georgia, compared to 49 percent of men. Additionally, the average salary for women was 1056 GEL (813 GEL in the agricultural sector), while men earned an average of 1538 GEL (1006 GEL in the agricultural sector). Finally, although poverty rates among women in Georgia are slightly lower than among men, 17.1 vs. 17.9 percent respectively (absolute poverty rates in 2021), the poverty data does not account for the gender-biased distribution of household resources. Women face larger barriers in obtaining financial resources (collaterals, loans, etc.) than men because they own less property. For different types of property, only 44 percent are owned by at least one woman, according to the National Agency of Public Registry of Georgia. The corresponding number for men is 56 percent.  Geostat data further indicates that households headed by men make up 63 percent of the total number of households, whereas households headed by women account for only 37 percent. These unfavorable conditions hinder women’s access to vital information and resources required for climate change adaptation and mitigation.

The discussed impacts may be especially prominent for women in poor rural households. Climate change-induced natural disasters are typically more detrimental for households dependent on agriculture (Dagdeviren et al., 2021), especially subsistence farmers and poor agricultural workers (in particular those without access to technology or resources). In Georgia, women are in majority in both these categories.

Natural Disasters and Displacement

Climate-driven disasters are over 14 times more likely to cause fatalities among women and children than men, according to UNHCR (2022). Additionally, women in agrarian societies impacted by climate change are less likely to use adaptive measures, putting them at higher risk of displacement (Palacios, Sexsmith, Matheu & Gonzalez, 2023). Such risks are also likely to pertain to the rural areas of Georgia.

Georgia’s International Obligations and Policies

In previous decades Georgia has made significant progress when it comes to incorporating gender equality and climate change into the policy agenda. In particular, Georgia follows numerous international legislative initiatives regarding sustainable development, gender equality, and climate change.

Georgia is a party to the Paris Agreement and the Beijing platform (a comprehensive roadmap for women’s rights and empowerment, which lists the problems associated with gender inequality and different strategies to overcome them, signed by Georgia in 1995). It is also a signatory of the Gender Action Plan (GAP), adopted a year after the Paris Agreement to integrate gender into targets and increase effectiveness, fairness, and sustainability.

The updated Nationally Determined Contribution (NDC) of Georgia includes a dedicated section on gender and climate change. This section aims to promote gender mainstreaming, encourage equal participation, empower women, build capacity, and develop climate policies that are responsive to gender considerations. Furthermore, the Long-term Low-emission Development Strategies for Paris Agreement parties (including Georgia) has a communication and awareness-raising strategy that seeks to address gender, youth, and people with disabilities in its outreach efforts (United Nations, 2022).

Despite these commitments, Georgia is lagging when it comes to tackling the issues of climate change and gender in coordination. For example, even though Georgia has adopted a Gender Equality Law and Action Plan, it does not address climate change issues. Therefore, municipalities are not required to consider gender aspects of climate change impacts.

Identified Gaps and Policy Recommendations

Despite the number of policies and measures undertaken, unsolved problems hinder the country’s ambition to adhere to gender-mainstreamed climate change-addressed policymaking.

For example, there is a lack of gender-disaggregated data on the impacts of climate change in Georgia, which prevents policymakers from developing targeted strategies to address women’s needs. Therefore, collecting and analyzing disaggregated data with gender-specific impacts in mind is recommended. Additionally, involving women in decision-making and ensuring their participation in climate change efforts is crucial as their unique experiences and perspectives can inform more effective and equitable responses to climate change impacts.

As previously mentioned, climate change in Georgia is expected to exacerbate water and food scarcity, which can disproportionately affect women. Therefore, implementing climate-resilient water management strategies and increasing access to climate-resilient agricultural practices, such as crop diversification and improved irrigation systems, can help increase farm productivity and reduce the adverse impacts of climate change on women.

Furthermore, there is a need to provide women with access to financial resources and services and to address gender-based inequalities that may limit women’s ability to access information and resources necessary for climate change adaptation and mitigation.

Finally, addressing the impacts of climate change on women in Georgia will require a coordinated and sustained effort from a range of stakeholders, including governments, civil society organizations, and local communities, so that women are not left behind in the global effort to address the impacts of climate change.

Conclusion

To effectively address the impacts of climate change on women in Georgia, it is essential to recognize that various social, economic, and cultural factors shape women’s experiences. For example, women in rural areas may face different challenges than women in urban areas; women with few economic means may be disproportionately affected by climate change. Therefore, policies should not only integrate gender-mainstreaming, but also account for these heterogeneities, to ensure that different parties of the society are adequately addressed within the climate change policy agenda.

References

  • Dagdeviren, H., Elangovan, A., & Parimalavalli, R. (2021). Climate change, monsoon failures and inequality of impacts in South India. Journal of Environmental Management.
  • Figueiredo, P., & Perkins, P. E. (2013). Women and water management in times of climate change: participatory and inclusive processes. Journal of Cleaner Production, 188-194.
  • Gamisonia, N. (2015). Climate Change and Women. Heinrich Böll Stiftung.
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  • MEPA. (2021). Fourth National Communication of Georgia to the UNFCCC. Tbilisi: UNDP.
  • Mora, C., McKenzie, T., Gaw, I. M., Dean, J. M., Hammerstein, H. v., Knudson, T. A., Franklin, E. C. (2022). Over half of known human pathogenic diseases can be aggravated by climate change. Nature Climate Change.
  • National Agency of Public Registry of Georgia. https://www.napr.gov.ge/
  • Palacios, H. V., Sexsmith, K., Matheu, M., & Gonzalez, A. R. (2023). Gendered adaptations to climate change in the Honduran coffee sector. Women’s Studies International Forum.
  • Sbiroli, E., Geynisman-Tan, J., Sood, N., Maines, B. A., Junn, J. H.-J., & Sorensen, C. (2022). Climate change and women’s health in the United States: Impacts and opportunities. The Journal of Climate Change and Health.
  • Springmann, M., Mason-D’Croz, D., Robinson, S., Garnett, T., Godfray, H. C., Gollin, D., Scarborough, P. (2016). Global and regional health effects of future food production under climate change: a modelling study. National Library of Medicine.
  • UNHCR. (2022). Gender, Displacement and Climate Change. Potsdam Institute for Climate Impact Research.
  • United Nations. (2022). Long-term Low-emission Development Strategies. United Nations.
  • World Bank Group. (2021). Climate Risk Country Profile: Georgia. World Bank Group.
  • World Bank. (2021). Climate Change Knowledge Portal. https://climateknowledgeportal.worldbank.org/country/georgia
  • Yadav, S. S., & Lal, R. (2018). Vulnerability of women to climate change in arid and semi-arid regions: The case of India and South Asia. Journal of Arid Environments, 4-17.

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.

European Democracy Through the Lens of Party Manifestos

Posted on May 1, 2023 | Policy Brief

A group of flags representing European countries, displayed on flagpoles with a clear blue sky in the background representing European democracy

The subjects of political discourse are important but hard to quantify. This brief uses data from 30 years of party manifestos to study how the dominant topics in politics have evolved across Europe. Transition countries have seen the most significant shift in the content of political discourse. In the early 1990s, party manifestos in Eastern Europe focused on a distinct set of topics related to transition; by recent elections they had converged to those in Western Europe, with a heavy emphasis on the welfare state, education, infrastructure and technology. Political discourse can change rapidly in times of crisis as shown by the example of Ukraine.

“It’s the economy, stupid!”

James Carville, Bill Clinton’s strategist for the 1992 election.

The dominant topics in politics are not always as apparent as when Bill Clinton was elected US president in the midst of a recession. While it is easy to track winners across election cycles, it is much harder to know what got them elected and what they will do (or at least, promise to do) once in power. The key issues and topics that political parties and candidates talk about form as important a part in our democracies as vote shares.

In this brief, we use data collected by the Manifesto Project (Lehmann et al., 2022) to describe the development of political discourse across Europe, with a particular focus on the differences and similarities between western European countries and transition economies in Eastern Europe.

Political Manifestos as Data

In most countries, voters mainly participate in the democratic process by voting for candidates put forward by political parties. Political parties advertise themselves to voters and distinguish themselves from each other by issuing party programmes or party manifestos where they lay down their ideological and policy positions.

The Manifesto Project provides a publicly available dataset on parties’ policy platforms. The data are based on the manifestos of parties that have won at least one (Western Europe) or two seats (transition countries) in a national election. Coders manually analyse the content of the manifestos and provide the percentage of each party’s manifesto that falls into one of 56 content categories. These content categories summarise a party’s policy position on given issues, for instance, whether they favour environmental protection or an expansion of the welfare state or oppose protectionism or multiculturalism.

The Manifesto Project is an example of “text as data“. Quantitative analysis based on text is becoming increasingly important across the social sciences (Gentzkow et al., 2019) but it is particularly useful in political economy and political science given that “language is the medium of politics“ and objective numerical data are often limited (Grimmer and Stewart, 2013). Unlike many recent approaches which process data using automated text analysis tools, the Manifesto Project relies on the judgement of coders from over 50 countries who read the original text. The resultant dataset has limitations: the subjective choices made by individual coders, the to-some-extent arbitrary determination of content categories to summarise the most relevant issues across different contexts and time periods and the difficulty of imposing consistent classifications for texts written in over 40 languages. Despite these caveats, it is a unique resource for analysing the evolution of countries’ political discourse over time and across countries.

Key Issues in Political Discourse

Figure 1 summarises, through content categories, the policy positions of parliaments in Western Europe and transition countries at two points in time: the early 1990s (around the time of the first democratic elections in most transition countries) and after the latest election. We measure the importance of a policy position in a country’s parliament by weighting the importance of the relevant content category in each party’s manifesto by that party’s vote share. Over time, our measure of a policy position’s importance in political discourse may increase or decline for two reasons. First, parties may change the extent to which they emphasise a given position in their manifestos. For example, parties across the political spectrum are likely to have increased references to healthcare in their manifestos during election campaigns held during the Covid-19 pandemic. Second, as voters’ preferences shift, parties that gain support will see their issues receive greater weight in the aggregate measure relative to parties that lose vote shares. For example, if the pandemic shifted voters’ preferences towards a more comprehensive welfare system, voters could respond by voting for parties which discuss the expansion of the welfare state in their manifestos.

Figure 1. Policy positions of parties in parliament.

Source: The Manifesto Project and authors’ calculations.
Notes: This chart shows word clouds of the main topics that feature in the manifestos of political parties in parliament, weighted by each party’s vote share and averaged across countries within a region. Panels a and b are based on the first election after 1990 (and before 1995) and Panels c and d are based on the latest election (after 2015) in the sample. Western Europe includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Transition economies include Armenia, Azerbaijan, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Moldova, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine. Not all countries are represented in both periods.

Some striking patterns emerge. While the policy priorities of Western European parliaments remain relatively stable over the past 30 years, those of transition countries have changed markedly. During the transition period, many parties focused on the political and economic aspects of transition. Support for democracy, freedom and human rights, as well as the free market economy, featured heavily in the manifestos of parties that formed the first democratic parliaments. Over time, policy priorities in transition countries have become more similar to those of their western neighbours, and issues such as the expansion of the welfare state, the provision of education, and the importance of technology and infrastructure, have come to the fore in all countries.

Nevertheless, some differences still remain. For instance, environmental protection is one of the most important topics in western European parliaments, though its importance has declined over time. In transition countries, the environment is slowly becoming more important, but even in the latest elections it ranked at only number 16 out of 56 issues. In contrast, support for the “national way of life” was and continues to be a prominent part of the political discourse in transition economies and it is also becoming more mainstream in the Western European countries.

Political corruption and governmental and administrative efficiency have become relatively more important issues in the parliaments of transition countries, both over time and relative to their western neighbours. Meanwhile, parties in Western Europe are devoting more of their manifesto to calls for equality and social justice.

A Closer Look at Ukraine

A country’s parliament’s policy platform can change suddenly in response to shocks. Figure 2 shows the big topic groups in the manifestos of political parties in the Ukrainian parliament from 1998 to 2019. The parliamentary election in October 2014 closely followed the Euromaidan Revolution, the annexation of Crimea by Russia and the start of the Donbas war. Compared to the previous elections, external relations became a major issue in the Ukrainian parliament, driven in particular by increased mentions of the military and the relationship with the EU. Party manifestos heavily featured appeals to Ukrainian nationhood, national solidarity, and unity (as evidenced by the increasing importance of the content category “Fabric of Society”). The trend of increasing attention to freedom and democracy also continued in this election cycle. In contrast, the previously most important issues in elections (welfare and quality of life) received much less attention in parliament at times of political upheaval and military conflict.

Figure 2. Topics in Ukrainian elections.

Source: The Manifesto Project and authors’ calculations.
Notes: This chart shows the percentage of mentions of topic groups in the manifestos of political parties in the Ukrainian parliament from 1998 to 2019, weighted by each party’s vote share.

Distribution of Political Ideology

While the previous section discussed the main policy issues in parliament, we now turn our focus to the ideology of individual political parties that make up a country’s parliament. A commonly used summary measure of political ideology is a left-right scale (RILE), where left positions favour peace, state intervention in the economy and the expansion of the welfare state and right positions support security, traditional values and the free market economy. The Manifesto Project provides a RILE value for each party at each election (based on Laver and Budge, 1992), which is calculated by subtracting the share of a party’s manifesto devoted to left-leaning policy issues, for instance support for the welfare state, from right-leaning content, such as support for the free market economy. Condensing the complexity of party programmes into a one-dimensional measure based on fixed definitions has advantages and drawbacks. The RILE makes it possible to compare diverse political parties that campaign on different issues (for instance ecological parties compared to nationalist parties) and measure how the same party’s policy stance may have shifted over time. As the definition of left- and right-leaning issues were based on influential political theories around the 1900s, some scholars argue that this measure has become less appropriate to empirically differentiate between modern political parties, particularly in transition countries (see, e.g., Mölder, 2016). In particular, Tavits and Letki (2009) show that during the transition process many leftist parties in Eastern Europe pursued economically right-wing policies and Vachudova (2008) argues that right-wing parties in the region often appealed to a nationalist discourse.

With these caveats in mind, Figure 3 shows the distribution of all parties in parliament in the Manifesto Project database on the RILE scale, weighted by their respective vote shares. In Western Europe in the 1990s, the chart shows the prominence of both centre-left and centre-right parties, as well as smaller parties both on the more extreme left and right. In contrast, the parties in parliament in transition economies at the time were more concentrated in the centre (and slightly towards the right). Fast forward 30 years and the distribution of political ideology has changed in both the east and the west. In Western Europe, the majority of parliamentarians are now situated slightly right of centre with little mass in the more extreme tails. In contrast, in the former transition countries, there is evidence of political polarisation with party representation moving both to the left and the right on the ideological spectrum and relatively few parliamentarians occupying the centre.

Figure 3. Left-right position of parties in parliament.

Source: The Manifesto Project and authors’ calculations.
Notes: This chart shows the density of parties in parliament on the left-right policy scale (RILE), weighted by each party’s vote share within their country. The dashed lines are based on the first election after 1990 (and before 1995) and the solid lines are based on the latest election (after 2015) in the sample. Western Europe includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Transition economies include Armenia, Azerbaijan, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Latvia, Lithuania, Moldova, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine. Not all countries are represented in both periods.

Conclusion

What are the main topics of political discourse? Are they different across countries? Do they change over time? While there is no perfect way to quantify and track political discourse over time, this brief uses data from parties’ manifestos provided by the Manifesto Project to illustrate some broad trends across Europe over the past 30 years.

We document two kinds of changes in the subject matter of party manifestos. First, there are gradual shifts in content that reflect underlying developments in society. As democracies have matured in Eastern Europe, the content of their parties’ manifestos has evolved away from the immediate concerns of economic and political transition and converged to those of Western European parties. Second, more abrupt shifts can arise when countries experience crises or institutional upheaval. Over the past decade Ukrainians have lived through a revolution, the Donbas war, and the ongoing Russian invasion. Most of the parties that represent them in parliament are new, and the issues that feature prominently in their manifestos are now markedly different from those before the Euromaidan revolution.

Manifestos are not just about substance but also about ideology. Using the Manifesto Project’s classification of parties on a left-right scale, we show how the distribution of parties has evolved in Western Europe and transition countries. By this measure, political polarisation has been increasing in transition countries where centrist positions are less well represented than in Western European parliaments.

References

  • Gentzkow, Matthew, Bryan Kelly, and Matt Taddy. (2019). “Text as data”, Journal of Economic Literature 57, no. 3: 535-74.
  • Grimmer, J., and Stewart, B. (2013). “Text as data: The promise and pitfalls of automatic content analysis methods for political texts”. Political analysis 21, no. 3: 267-297.
  • Lehmann, P., Burst, T., Matthieß, T., Regel, S., Volkens, A., Weßels, B. and Zehnter, L. (2022) The Manifesto Data Collection. Manifesto Project (MRG / CMP / MARPOR). Version 2022a. Berlin: Wissenschaftszentrum Berlin für Sozialforschung (WZB). https://doi.org/10.25522/manifesto.mpds.2022a
  • Laver, M. and Budge, I. (eds.). (1992). Party Policy and Government Coalitions, Houndmills, Basingstoke, Hampshire: The MacMillan Press.
  • Mölder, M. (2016). The validity of the RILE left–right index as a measure of party policy. Party Politics, 22(1), 37–48. https://doi.org/10.1177/1354068813509525
  • Tavits, M. and Letki, N. (2009). When Left Is Right: Party Ideology and Policy in Post-Communist Europe. American Political Science Review, 103(4), 555-569. doi:10.1017/S0003055409990220
  • Vachudova, M. A. (2008). Centre—Right Parties and Political Outcomes in East Central Europe. Party Politics, 14(4), 387–405. https://doi.org/10.1177/1354068808090252

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.

Spillover Effects from the Nordic Model of Prostitution Legislation

Posted on April 24, 2023 | Policy Brief

20230424 Spillover Effects Nordic Model of Prostitution Image 00

In recent years several European countries alongside Canada and Israel have adopted the so-called Nordic model of prostitution legislation to try and reduce the risk of sexual exploitation. While the reforms directly affect the regulation of the domestic sex market, their effects may also spill over to other outcomes in nearby areas and internationally – for example affecting sex tourism flows. Making use of data on tourism flows and Google searches, a new study examines the causal effect from the implementation of the reform in four different countries on sex tourism in popular destinations. The findings indicate that domestic reforms increase sex tourism, calling for the design of policies to account also for these adverse effects.

Introduction

Since 1999, when Sweden introduced the so-called Nordic model of prostitution legislation, similar legislation has been introduced in Canada, Iceland, Ireland, France, Norway, and most recently Israel. While the legislation design differs between countries (for an overview see Perrotta Berlin and Spagnolo, 2019), the common foundation is to effectively criminalize the purchase but not the selling of sexual services. The introduction of such reforms aims at battling human trafficking and reducing the risk of exploitation. While the effect from the asymmetric prostitution legislation has been found to increase rape incidence in Sweden (Ciacci, 2018), when it comes to the sex market the Nordic model is mainly thought to affect it in two contrasting ways. Firstly, it may suppress domestic supply, which could result in people travelling to destinations where prostitution is not criminalized. Secondly, it might affect the general view on prostitution (Kotsadam and Jakobsson, 2011), thus reducing domestic demand as well as international sex tourism.

Sex tourism is associated with human trafficking, child exploitation and increased spread of sexually transmitted diseases (Herold and Van Kerkwijk, 1992; Brooks and Heaslip, 2019; Newman et al. 2011). Despite this, few studies have explored the impact of prostitution laws on the practice – in part due to measurement difficulties.

This brief presents evidence from a forthcoming paper by Perrotta Berlin and Latour on sex tourism patterns following the implementation of the reform in four different countries.

Quantifying Sex Tourism

Perrotta Berlin and Latour use tourism patterns and Google searches to quantify sex tourism flows, in order to evaluate the effect from changes in prostitution legislation in Canada, France, Ireland and Norway. Specifically, they use data on the number of monthly tourist arrivals to Thailand and The Philippines, and weekly Google searches originating from the above-mentioned reform countries for popular sex-tourism and other tourism destinations, including attractions within cities. German tourism data and Google searches originating from France as well as Google searches originating in the US are used to estimate the effect on sex tourism to bordering countries (France to Germany and US to Canada, respectively). To evaluate the respective effects, they identify treated and control groups for each considered setting, and proceed to compare data between these groups before and after the reform (in line with the so-called difference-in-differences specification, as pioneered by Card and Krueger, 1994). In the following sections, each of these specifications and the subsequent results are discussed.

Evident Spillover Effects

Thailand and The Philippines

For Thailand and The Philippines, monthly data was available on tourist arrivals differentiated by country of origin from 2013 to 2020 and from 2008 to 2020, respectively. The underlying assumption is that, absent a prostitution legislation reform in the four considered countries (Canada, Ireland, France and Norway), the tourism flows from the country in question to Thailand and The Philippines would have remained the same over time. Thus, the change in the number of tourist inflow (out of which an unknown number are sex tourists) from the country in question – when compared to the number of tourists from other countries used as the control group – can be interpreted as a causal effect from the legislative reform on sex tourism.

The results show that, when compared to tourists arriving from other countries, the number of tourists arriving from one of the countries having recently implemented the Nordic model increased by 0.312 and 0.158 standard deviation points for The Philippines and Thailand respectively. Figure 1 below illustrates the results from an event study specification, in which the reform dates in the four different countries are aligned at 0, depicting how the increase is spread over the two years following the reform.

Figure 1. Number of tourists before and after the reform, The Philippines to the left and Thailand to the right.

Notes: The horizontal axis is the time variable. Time is normalized such that 0 is the month when the reform came into force. On the left panel the vertical axis is the number of tourist arrivals to The Philippines from reform countries in deviation from control countries. On the right panel the vertical axis is the number of tourist arrivals to Thailand from reform countries in deviation from control countries.

France-Germany Border

In Germany, the legislative status of prostitution is determined at the level of municipality. For the analysis, German municipalities where prostitution is to some extent legal were considered to form the treatment group and municipalities where it is illegal constituted the control group. The outcomes of interest were i) tourists travelling to German municipalities of interest, and ii) Google searches from France for the same municipalities.

The analysis shows an increase in foreign tourism to the treatment municipalities following the implementation of the Nordic model of prostitution legislation in France.  At the same time, no changes in domestic tourism was detected. The conclusion that the increase in foreign tourism is driven by an increase in French tourists, by which one could then argue the implemented reform to increase cross-border sex tourism, was validated by the analysis of French Google searches. In these data it can be seen that distant German municipalities where prostitution is legal become relatively more interesting in French Google searches after the reform compared to municipalities where prostitution is illegal.

Figure 2. Searches of German municipalities originated in France relative their distance from the French border.

Notes: The vertical axis is the weekly index of Google Trends for searches for municipalities in Germany originated in France. The horizontal axis is distance from the French border. The red line shows that the slope decreased, i.e. distance became more salient for municipalities with illegal prostitution after the reform.

Canada-US Border

Data on Google searches for Canadian municipalities from one year before to one year after the reform in Canada were considered for the analysis. Searches originate in different US states, which also differ in the extent to which purchase of sexual services is legally punishable. The length of imprisonment in each US state determines whether a state was considered treated – when the length of imprisonment equals or exceeds that in Canada following the reform – or control. Results show that after the introduction of the Canadian reform, Google searches for Canadian municipalities dropped, in particular, in US states with high punishments for purchase of sexual services – most likely those where sex tourism to Canada used to originate before the reform. The results from the event study is depicted in Figure 3 below.

Figure 3. Number of searches of Canadian cities before and after the reform, deseasoned.

Notes: The horizontal axis is the time variable. Time is normalized such that 0 is the month when the reform came into force. The vertical axis is the number of searches from US states with high punishments in deviation from control states.

Sex Tourism Destinations

Finally, Google Searches for sex tourism destinations were considered as the outcome variable with the underlying idea being that – in the absence of a legislative change in the four considered countries – the difference in number of searches for sex tourism vs tourism destinations would have been the same over time. Sex tourism destinations were defined in two alternative ways: first, a list of popular destinations was selected within countries where prostitution is legal; second, this list was augmented with information from websites that list popular destinations for sex tourism, regardless of the legal status of prostitution in that country.

The results from this analysis are less clear, varying with the definition of sex tourism destinations and with the country of origin. But by and large they showed, if anything, that the interest in sex tourism destination countries decreased after the reform. This might indicate a change in attitudes towards lower acceptance of sex trade in general in the countries where the reform was implemented.

Conclusion

Prostitution legislation reforms affect the domestic sex market and have potential cross-border and international spillover effects. One such impact from criminalizing the purchase of sexual services domestically is increased levels of sex tourism, which might in turn impose adverse effects on the destination countries.

Filling a research gap by studying the effect from introducing asymmetric prostitution laws on sex tourism, Perrotta Berlin and Latour find evidence suggesting that harsher domestic regulation, while potentially changing attitudes in the general population (as indicated by Google Searches) also, in specific cases, increases, the outflow of tourists to destinations with less stringent laws.

After the introduction of the Nordic model, Norway has imposed legislation prohibiting their citizens to purchase sexual services even in countries where it is legal and implemented awareness campaigns on the detrimental effects of sex tourism on local populations. Given that sex tourism is associated with human trafficking, child exploitation and increased spread of sexually transmitted diseases, the results call for other countries to follow suit with domestic prostitution legislation taking on a more global approach to achieve greater effectiveness.

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.