The Rule of Law: A Critical Building Block for Good Governance and Economic Growth

The Rule of Law: A Critical Building Block for Good Governance and Economic Growth. Center for Strategic & International Studies. Conor M. Savoy. June 18, 2019

This report seeks to provide a brief overview of how donors have traditionally approached the rule of law, what the problem is from an investment climate perspective, an overview of U.S. support for rule of law, and, finally, recommendations going forward. [Note: contains copyrighted material].

[PDF format, 23 pages].

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Beyond Neoliberalism: Insights From Emerging Markets

Beyond Neoliberalism: Insights From Emerging Markets. Brookings Institution. Geoffrey Gertz and Homi Kharas.  May 1, 2019

Across Western economies, the future of capitalism is suddenly up for debate. Driven in part by the twin shocks of Brexit and the election of Donald Trump, the prevailing neoliberal economic model—which prioritized a light touch regulatory regime, minimal barriers to trade and foreign investment, and overall a small role for the state in managing the economy—is under attack from both the left and the right. Will neoliberalism be displaced? And what will come next?

Around the world, meanwhile, emerging markets have been grappling with similar questions for decades. Neoliberalism spread unevenly across emerging markets, and likewise many of them have been moving beyond neoliberalism for decades. These varied experiences provide valuable insights into the strengths and weaknesses of neoliberalism and the future of economic and political policymaking in a post-neoliberal world. If the Washington Consensus mantra of “stabilize, privatize, and liberalize” has lost relevance today, what—if anything—has taken its place? How are different countries reevaluating the relative roles of states and markets in delivering economic development? Are there new “models” that are generalizable and applicable across countries and contexts? [Note: contains copyrighted material].

[PDF format, 109 pages].

Business Bribery Risk Assessment

Business Bribery Risk Assessment. RAND Corporation. Karlyn D. Stanley et al. May 13, 2019

Report introduces a new index, the TRACE Matrix, for business bribery risk assessment. The index provides a quick and useful guide for businesses operating overseas based on a conceptual model of bribery risk and supported by data specific to firms. [Note: contains copyrighted material].

[PDF format, 75 pages].

The Higher Road: Forging a U.S. Strategy for the Global Infrastructure Challenge

The Higher Road: Forging a U.S. Strategy for the Global Infrastructure Challenge. Center for Strategic & International Studies. Matthew P. Goodman et al. April 23, 2019

Over the next 15 years, more hard infrastructure is projected to be built around the world than currently exists. This global build-out is already underway, and the changes it brings will only accelerate. Infrastructure projects, especially in the transport, energy, information and communications technology (ICT), and water sectors, have long been recognized as the backbone of modern economies. Going forward, emerging digital infrastructure, including fifth-generation (5G) networks, remote sensing, and other advanced technologies, will be especially critical. As our infrastructure is transformed, so will be the economies it fuels, the regions it connects, and the global commons it underpins. These trends are too powerful and potentially beneficial for the United States to stop, and too consequential to ignore. [Note: contains copyrighted material].

[PDF format, 61 pages].

Artificial Intelligence Primer: What is Needed to Maximize AI’s Economic, Social, and Trade Opportunities

Artificial Intelligence Primer: What is Needed to Maximize AI’s Economic, Social, and Trade Opportunities. Brookings Institution. Joshua P. Meltzer. May 13, 2019

Artificial intelligence (AI) has the potential to transform economic growth, commerce, and trade, affecting the types of jobs that are available and skills that are needed. The United States, China, Japan, Germany, the United Kingdom, France, and others have recognized the opportunity and are supporting AI research and development as well as preparing their workforce.

For AI to develop also requires an enabling environment that includes new regulation in areas such as AI ethics and data access and revisiting existing laws and regulation in areas such as privacy and intellectual property (IP) rights to ensure that they work for AI. In addition, AI development requires an international agenda to avoid unnecessary regulatory heterogeneity that creates barriers to data access and use and impedes the global diffusion of AI products. [Note: contains copyrighted material].

[PDF format, 26 pages].

Catalyzing Neighborhood Revitalization through Strengthening Civic Infrastructure: Principles for Guiding Place-Based Initiatives

Catalyzing Neighborhood Revitalization through Strengthening Civic Infrastructure: Principles for Guiding Place-Based Initiatives. Urban Institute. Aaron Shroyer, Joseph Schilling, Erika C. Poethig. April 16, 2019

Place-based revitalization initiatives seek to make every neighborhood safe and healthy and to connect them to high-quality services. These initiatives share a few common characteristics. They concentrate resources in a specific geography; combine physical revitalization with the provision of services (e.g., health, education, and job training programs); leverage existing institutions, networks, and capital; and engage local leaders and residents. However, they have a mixed track record on whether and how much current residents benefit from such redevelopment. To address these and other limitations, more place-based initiatives are starting to marry physical revitalization with intentional efforts to build civic infrastructure. Civic infrastructure incorporates a broad view of community assets and therefore seeks to improve physical and civic assets as well as the processes, practices, and interactions those assets enable. By strengthening civic infrastructure, revitalizing physical assets can help create equitable outcomes for residents and increase community benefits. [Note: contains copyrighted material].

[PDF format, 42 pages].

Dealing with the Offshore Economy

Dealing with the Offshore Economy. Atlantic Council.  Alan Riley. April 2, 2019

Given that offshore tax havens are largely located in small, independent states or self-governing territories, it could be assumed that they have little connection to OECD states and major financial centers such as London and New York. This is not the case. The so-called tax havens are in fact part of a much larger network of financial and corporate services that depends on lawyers, accountants, and bankers located in major Western cities. Only one part of the havens’ business actually involves providing lower tax rates to individual foreign account holders.

These techniques originally developed to assist American executives and Belgian dentists, and later multinational corporations, to limit their exposure— sometimes lawfully, sometimes unlawfully—to their respective tax authorities. Today, they’re increasingly deployed to flows of tainted capital from developing countries, helping those funds transit from their home jurisdictions and ultimately to the West.

There are more capital flows into the offshore world from OECD states than from developing countries. The argument of this paper, however, is that while OECD origin capital flows erode the tax base and some of the flows amount to illegal tax evasion, the overall effect of the money coming from developing countries, especially the tainted flows, is more damaging from both an economic and a security perspective.

In other words, the West, with its rule of law and creation of the Western-governed offshore economy, has given corrupt elites in developing countries the tools and capacity to avoid ever establishing the rule of law in their own countries. They are the beneficiaries of the West’s firmly-established rule of law and can leverage that advantage against their own people to ensure that they never benefit from the rule of law themselves. This is the rule of law paradox. [Note: contains copyrighted material].

[PDF format, 24 pages].