Einaudi Center: Working Paper Series

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The Macro- and Socioeconomic Impact of the Syrian Crisis on Lebanon
Charafeddine, Raed H. (Mario Einaudi Center for International Studies, 2018-04)
Because the blazing Syrian territories are the longest and only accessible borders to Lebanon, the Syrian crisis has had a direct and significant impact on Lebanon’s macro- and socioeconomic conditions. It has undermined vital economic sectors, weakened economic growth, and positioned Lebanon as the country with the highest per capita concentration of refugees in the world. The crisis has augmented fiscal deficits, intensified poverty and humanitarian crises, and aggravated existing developmental constraints. Current international and regional support initiatives still fall short of meeting Lebanon’s urgent need to face current critical challenges and capitalize on any potential opportunities. Raed H. Charafeddine, the First Vice-Governor of Banque Du Liban, Lebanon’s Central Bank, explores these dimensions and highlights the role of the Central Bank in mitigating the impact of the Syrian crisis on Lebanon through monetary and financial stability, sustained social development, and economic growth.
Challenges Confronting Central Bankers Today
Hayes, Adam (Mario Einaudi Center for International Studies, 2016-07)
The role of central banks in today’s global economy cannot be understated. These institutions hold great influence over important pieces of the economic engine, which in turn impact financial flows, access to credit, prices and global trade. Since the financial crisis of 2008-2009, the influence of central bank policymakers has only grown greater. Unprecedented actions and emergency measures have been taken to stabilize what otherwise could have been a global economic depression to rival the 1930’s. This paper reviews five questions that today’s central bankers face: whether to adhere to a rules-based monetary policy; if central banks should step into stabilize markets (e.g. QE); the importance of inflation targeting; the role of central bank independence; and the use of negative interest rates. Each of these issues is presented with arguments both in favor and against, empirical evidence to their effectiveness, as well as their possible unintended consequences and interconnectedness.
The Global Politics of Central Banking: A View From Political Science
Lockwood, Erin (Mario Einaudi Center for International Studies, 2016-07)
This paper reviews the political science literature on central banking from the early 1990s through the present, paying particular attention to the explicit or implicit conception of politics in the works reviewed. I begin by reviewing rationalist approaches to central bank independence from both the policy supply and demand sides. In the second section, I review literature that challenges and critiques this rationalist/institutionalist paradigm and its assumptions. The third section reviews studies that locate politics within central banks themselves and that analyze decision-making processes therein. The final section builds on the strengths of the existing literature to outline a future trajectory for political science scholarship on the global politics of central banking, one that incorporates a more sophisticated conception of politics and that is attentive to the post-crisis world in which transnational forces, governing ideas and worldviews, unconventional monetary policy, and non-monetary policy central bank functions are of paramount importance.
The Changing Politics of Central Banking: A Legal Perspective
Prates, Marcelo (Mario Einaudi Center for International Studies, 2016-06)
Central banks around the world emerged from the financial crisis in a curious situation. On the one hand, central banks were criticized because they had not been able to anticipate or prevent the crisis. On the other hand, central banks were called on to lead the way to economic recovery, using unprecedented means if necessary. We can, thus, tell two different, even opposite tales of central banks after the financial crisis. One of losing prominence, and the other of becoming the most powerful institution of our times. And both accounts are very true. How is that possible? This white paper reviews the legal literature in search of answers to this question. It starts by revisiting the issue of central-bank independence and looking at how the different branches of government now interact with central banks. The paper also explores the legal questions associated with central banks making use of unconventional tools.
After Crimea: Disarmament, Frozen Conflicts, And Illicit Trafficking Through Eastern Europe
Gheorge, Eliza (Mario Einaudi Center for International Studies, 2015-07)
This paper examines the principal-agent problem in the case of Russia and breakaway republics in its near abroad, with a specific focus on nuclear smuggling. These spaces have been a haven for nuclear traffickers, posing important challenges for international efforts aimed at stemming proliferation. Given that secessionist regimes in this area owe their existence to Moscow’s military presence, scholars have blamed Russia for nuclear smuggling incidents in frozen conflict areas, arguing that Moscow has never been cooperative on nuclear matters. However, the historical record reveals that Russia does not take the dangers posed by nuclear smuggling lightly, as insurgent groups in the region have repeatedly threatened to use dirty bombs against it. A closer look at both the theory and the empirical evidence around the illicit trade with nuclear materials, drawing on examples of nuclear trafficking through Transnistria, shows that it is the state of lawlessness in these breakaway republics that makes these territories a fertile ground for smuggling networks. As organized crime engulfs these quasi-states, professional traffickers take over smuggling rings from amateurs. This paper shows that the increasing frequency of nuclear smuggling incidents in breakaway republics is better explained by the growing sophistication of trafficking networks rather than by Russia’s involvement in these frozen conflict zones.
Constructing and Maintaining Legitimacy: Sociological Perspectives of the Politics of Central Banking
Bea, Megan Doherty (Mario Einaudi Center for International Studies, 2016-06)
This working paper reviews central banking research produced in sociology and anthropology, most of which has been published in the last five to ten years. These studies focus on institutional structures and social and cultural processes that shape central bank activity, with significant attention to the ways in which central banks seek to legitimate their actions. I outline key themes that have emerged, including central banks’ internal decision-making and analysis of the international pressures they face. I review research examining the ways in which central bankers are influenced by one another, use performative rhetoric to manage the market, and engage in relational work with a variety of actors as they seek to maintain their legitimacy. This research is an important complement to traditional central banking research published in the fields of economics, political science, and law, and underscores the complexity involved in the day-to-day operations of central banks.
Going Global In Academia: International Ranking Systems and Their Implication for Economic Research Variety
Palea, Vera (Mario Einaudi Center for International Studies, 2015-07)
There is nowadays a growing sense of unease about the current state and the direction of financial academic research. A number of critical studies have highlighted the failure of academia in anticipating the recent financial crisis and criticizing economic models used by financial market practitioners. Too much intellectual inquiry has operated within the parameters set by academic practice rather than questioning and challenging them. This paper argues that the current state of research is strictly linked to the adoption of international journal ranking lists as university management tools, which has led to a hegemony of the U.S. elite in research. Affected by a genuine ethnocentrism, U.S. research is very much capital market-oriented and optimized for liberal stock market economies, while completely ignoring different approaches and critical studies. The strength of economics and, more generally, social sciences instead lies in their rich, reflexive research analyses, carried out within their specific contexts, so essential to the social and economic advancement of society. Knowledge would therefore be better served by alternative research agendas tailored to the needs of different forms of capitalism. It is at times of great uncertainty and changes, such as the ones in which we are living, that advantages of variety in research can be appreciated. According to this view, this paper focuses on the European Union and presents a view of research that is strongly embedded in the EU constitutional framework and its ideal of social market economy.
Africanizing Apartheid: Identity, Ideology, and State-Building in Post-Independence Africa
Miller, Jamie (Mario Einaudi Center for International Studies, 2015-04)
Between 1968 and 1975, the leaders of white South Africa reached out to independent African leaders. Scholars have alternately seen these counterintuitive campaigns as driven by a quest for regional economic hegemony, divide-and-lure realpolitik, or a desire to ingratiate the regime with the West. This article instead argues that the South African government’s outreach was intended as a top-down recalibration of the ideology of Afrikaner nationalism, as the regime endeavored to detach its apartheid program from notions of colonialist racial supremacy, and instead reach across the color line and lay an equal claim to the power and protection of African nationalism. These diplomatic maneuverings, therefore, serve as a prism through which to understand important shifts in state identity, ideological renewal, and the adoption of new state-building models.
Mapping the Contours of Identity Contestation: Hybridization, Polarization, and Self-Marginalization
Hintz, Lisel (Mario Einaudi Center for International Studies, 2016-05)
This paper is part of a larger project that forays into the murky waters of sub-national identity contestation, understood here as struggles among members of a state’s population who support competing various proposals for the content of that state’s national identity. The paper attempts to capture these contours, map their shifts, and parse out the mechanisms by which these changes occur in Turkey, a state with multiple, politically salient identity cleavages. To do so, the paper analyzes these three key episodes that each constitute major challenges to the ruling party’s pursuit of identity hegemony for its own proposal of Ottoman Islamism. Each of these challenges shaping the contours of Turkey’s identity debates over the course of just two years (May 2013 – May 2015) represents a different dynamic of identity contestation: hybridization of opposition demonstrators during the Gezi Protests, polarization among supporters of the AKP and the Gülen Movement, and self-marginalization of the AKP through its increasingly radical rhetoric. Drawing from a wide array of popular culture and social media sources as well as interviews, surveys, and participant observation, the analysis provides new insight into the vernacular politics of identity in contemporary Turkey, while contributing to wider studies of social movements and contentious politics through its examination of various mechanisms of change.
Georgia in His Mind: A Cognitive Explanation for George W. Bush’s Decision-Making in the 2008 August War
Hintz, Lisel (Mario Einaudi Center for International Studies, 2016-05)
This paper explores the case of US President George W. Bush’s unwavering support for the Republic of Georgia in its aggressive engagement with Russia during the 2008 August War, a nearly universally acknowledged judgment error that puzzled Bush’s own team as much as it did foreign policy analysts. Finding explanations grounded in alliance behavior, audience costs, and resource security inadequate, the paper offers a cognitive heuristics account that focuses on the fundamental attribution error (FAE). Examining how the FAE can function in terms of assessing the actions of perceived friends reveals Bush’s failure to update his beliefs about the increasingly erratic behavior of Georgian President and Bush confidante Mikhail Saakashvili. In presenting an explanation for this empirical puzzle, the paper contributes a new perspective on the FAE of use in the burgeoning literature employing psychological approaches to foreign policy outcomes.
The EU Financial Crisis – European Law and Constitutional Law Implications
Kube, Hanna (Mario Einaudi Center for International Studies, 2012-06)
The EU Financial Crisis is not only an economic crisis, but also a crisis of the rule of law and of democracy. This paper, which deals with the European Law and the Constitutional Law Implications of the EU Financial Crisis, was presented as a lecture in the Berger International Speaker Lectures Series at Cornell Law School on April 11th, 2012. It outlines the core elements of the crisis and presents the strategies adopted by the EU and the Member States for coping with the crisis. After that, the author turns to the struggle with the rule of law that the crisis has led to and argues that Europe has taken some steps in order to rest the new fiscal policy rules and the rescue mechanisms on a legal framework, but that – on the whole – we are still on the way to reaching a satisfying level of compliance with the rule of law and corresponding clarity again. The great remaining challenge is the challenge of democratic legitimacy. Insofar, it is argued that the ESM can be democratically legitimized, at least in the case of Germany. However, the financial crisis gives rise to further questions regarding the future democratic foundation of the EU and regarding – as the German Federal Constitutional Court put it – the future ability of a constitutional state to democratically shape itself. The decisive question will eventually be whether the fiscal discipline aspect or the bail?out aspect of the current political process will actually shape the Union. Complementing the monetary union by a transfer and debt union would have a detrimental effect on the future development of Europe. Therefore, financial support for a member state has to remain an exception, and it has to be granted under strict conditionality. State insolvency should remain an option.
The Changing Relationship between Foreign Language Studies and International Studies at Cornell University
Michelsen, Heike; van Morgan, Sydney (Mario Einaudi Center for International Studies, 2011-09)
Foreign language study has long been a critical component of international studies in higher education in the United States, and there is evidence that the popularity of language study is on the rise again. Recently, this rising demand for second-language instruction was confronted with unprecedented cuts in public and private funding for higher education. This study analyzes how the reduced resources have impacted the fields of language and international studies at Cornell and how reconfigurations in university priorities and strategies have affected the nature of foreign language instruction. The study is based on a series of interviews, faculty surveys, and secondary sources. This paper describes the current state of and trends in language and international studies instruction addressing issues of policy, organization and structure, resources, and performance. It also compares language studies at Cornell to eight other comparable universities and identifies key challenges at Cornell.
Standardizing Financial Reporting Regulation: What Implications for Varieties of Capitalism?
Palea, Vera (Mario Einaudi Center for International Studies, 2015-03)
Financial reporting is a powerful practice that shapes social and economic processes. This paper argues that there are fundamental reasons against current attempts to establish a single set of global financial reporting standards, moreover tailored to the needs of stock marketbased capitalism. Evidence shows that there exists more than one way of doing business. Social market economy, for instance, is one of the founding principles of the European Union. Standardizing financial reporting onto a single economic model could therefore harm alternative forms of capitalism. It is at time of great uncertainty and change that the advantages of variety can be appreciated. Consistent with this view, this paper claims that the optimal design of financial reporting regulation should depend on the specific institutional characteristics of the economic and political systems.
A “War on Terror” by any other name… What did Obama change?
Evangelista, Matthew (Mario Einaudi Center for International Studies, 2012-09)
Barack Obama came into office promising a major departure from the policies of his predecessor regarding the so-called Global War on Terror. This paper compares the policies of the Bush and Obama administrations on four issues: 1) treatment of prisoners, particularly indefinite detention at Guantánamo Bay and trial by military commissions; 2) kidnapping, “extraordinary rendition,” and torture of terrorist suspects; 3) targeted killings by unpiloted aerial vehicles or “drones;” and 4) preventive wars and “humanitarian interventions.” It considers four main indicators of change: 1) whether the Obama administration continued existing policies or stopped them; 2) whether it publicly stigmatized illegal practices or remained silent; 3) whether or not it investigated crimes of Bush officials and punished the perpetrators; and 4) whether the Obama administration expanded the practices of its predecessors. The fourth indicator is most relevant to the topic of drone attacks, where the administration extended the practice of targeting killing by drones in number, frequency, space, and by category of target beyond what the Bush administration did. The paper concludes with brief speculation about the impact of the Obama administration’s policies – and other factors -- on the evolution of legal and ethical norms governing the struggle against terrorism.
National Security and Property: The War on Terrorism as Mid-Wife to Changes in Ownership
Geisler, Charles (Mario Einaudi Center for International Studies, 2009-09)
Many have noted that the war on terror has driven a wedge between security needs and civil rights, yet the consequences of this war for property rights have received little attention. This paper explores the conditions under which private property rights are suspended despite their central place in the constellation of values for which the war on terror is fought. These conditions are exceptional--states of emergency in which governments amend their own rules, including normal protections for property. Focusing on the Department of Homeland Security (DHS), the principal institutional offensive against terrorist threats within the United States, I examine four DHS program areas for their property-related impacts. These impacts are direct, through eminent domain, as well as indirect, through the federal preemption of the police power historically reserved to state and local governance. The retreat of strong property rights long viewed as sacrosanct—referred to here as post property--does not apply evenly to all property owners and signals an important way that states of emergency can redistribute property and related wealth.
Parties and Issues in Francophone West Africa: Towards a Theory of Non-Mobilization
Bleck, Jaimie; van de Walle, Nicolas (Mario Einaudi Center for International Studies, 2010-04)
This paper builds a theory about electoral discourse in Africa and the salience of political issues since the return of competitive elections in the early 1990s, based on empirical materials from recent elections in Mali, Mauritania, Niger, Benin, Burkina Faso, and Senegal, six roughly similar semi-democratic francophone states in West Africa, which have conducted a least one reasonably free and fair election since the early 1990s. Drawing on content analysis from newspapers, the electronic press, party websites, as well as interviews and secondary sources on elections in these countries, we formulate two empirical arguments; first, issues do in fact captivate and potentially mobilize African voters. Our survey of the subregion suggests that politics is more substantive than generally credited. Second, however, we argue that political parties in the subregion fail to mobilize citizens along many of these issues, for two primary reasons. First, we hypothesize that the shared values and identities of political actors emerging during third wave transitions in the region shaped conceptions of what constitutes democratic politics. For the most part, the world view of Francophone, secular, elites have come to dominate political discourse, restricting the types of issues that could be incorporated into formal politics. Secondly, we employ the concept of issue-ownership to explain why opposition parties have difficulty mobilizing voters with programmatic rhetoric, and shy away from other issues, despite their vote-mobilizing potential.
The Institutional Origins of Inequality in Sub-Saharan Africa
van de Walle, Nicolas (Mario Einaudi Center for International Studies, 2008-12)
This paper seeks to provide a political explanation for the unexpectedly high levels of inequality found in the African region today. There is much variation within the region, however the common history and structural factors suggests a distinctly African kind of inequality. The paper describes the recent literature on African inequality and examines the limitations of traditional explanations for inequality in Africa. Instead, it is argued that natural endowments in the region shaped the nature of colonial institutions, which in turn created the conditions for high levels of inequality. The author concludes that the surprisingly high levels of inequality in Africa can be understood as part and parcel of a process of class formation linked to processes of state building that have their origins in the economic institutions of the early colonial state. Colonialism favored, in relative terms, certain indigenous groups, which often inherited the state at independence. Insofar as political power has often been used to gain economic advantages during the postcolonial era, inequality has changed little over the course of the last forty years, despite the official focus on development and poverty alleviation by donors and governments alike.
Chiapas, the South, and Mexico’s Regional Inequality in the Context of Trade Openness
Rivas, Marcela Gonzalez (Mario Einaudi Center for International Studies, 2009-07)
This paper studies the southern state of Chiapas in the context of Mexico’s regional inequality, and particularly examines the effects of Mexico's trade policy. The paper shows that Chiapas is one of a group of southern states that have consistently performed worse than other states from 1940 to 2000, even during periods when regional inequality has improved. The paper demonstrates that Mexico’s trade policies have affected states differently, depending on their endowments of infrastructure. This partly explains why Chiapas and its neighbors – states with exceptionally low values of infrastructure – consistently performed worse than other states over the entire time period, and particularly poorly in the open trade regime. Finally, the paper argues that these low levels of infrastructure have deep historical roots in the government policies implemented during the 20th century. I conclude that it is unlikely that the south will catch up without policies specifically addressing this infrastructure gap.
Controlling the Locusts: Germany and the Global Governance of New Financial Markets
Zimmermann, Hubert (Mario Einaudi Center for International Studies, 2008-04)
In April 2005, during the national election campaign in Germany, the Chairman of the German Social Democratic Party, Franz Müntefering, likened private equity firms and hedge funds to swarms of locusts sucking out firms and laying off employees. His remarks were among the shrillest in an increasingly intense international debate on thebetter regulation of international financial markets. New forms of private capital have amassed such huge amounts of financial resources that state regulators not only in Germany increasingly fear risks for global financial stability. However, Germany is particularly active in this regard. During its presidency of the G-8 in 2007, Germany has made the tighter regulation of global financial industries one of its core objectives. These initiatives lead directly into some of the core controversies of the literature on global economic governance: what is the extent of state capacity in regulating global financial markets, which forms of regulation are achieved, and what are the theoretical instruments allowing us to explain cooperation and non-cooperation among states and between states and private actors? This paper looks at the reasons and prospects of Global Economic Governance initiatives under the new financial (non)architecture, using Germany as empirical example
Germany’s Role in Global Pharmaceutical Regulation
Kaiser, Robert (Mario Einaudi Center for International Studies, 2008-05)
Since the 1990s, the member states of the European Union (EU) have in an increasing number of cases agreed to pool their individual market power in order to valorize their bargaining position in various global governance arrangements. The most prominent examples of those interactions with multilateral regimes certainly are the World Trade Organization and the global climate regime. Against this background, this paper has a theoretical and an empirical aim. Concerning the theoretical perspective, the paper proposes an extended multi-level governance approach (eMLG) in order to analyze the dynamics of institutional change that emerge both at the EU and the member states’ level as a consequence of the agreement to Europeanize the mediation of national interests. Empirically, I refer to the example of global pharmaceutical regulation and I ask why even larger member states of the EU, such as Germany, engage in the Europeanization of interest mediation and under what conditions they are able to pursue their interests if the European Commission represents them at the global stage. In this respect I argue that not the size or the relative power of individual member states play a decisive role, but their ability to make use of the institutional multi-level structure.

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