Jihad: a South African perspective

The India, Brazil and South Africa Dialogue Forum (IBSA) established in 2003 brings together three like-minded, democratic, market economies of multi-cultural and multi-ethnic character, sharing a broadly similar economic, political and development situation. At the time of its formation IBSA was widely regarded as representing a novel form of South-South cooperation, transcending older models rooted in the logic of North-South confrontation in the post-colonial, Cold War world. However, now, as the respective countries prepare for their tenth anniversary summit in India, the forum seems to face a growing sense of irrelevance, perhaps even an existential crisis. There has been a proliferation of other forums—notably BRICS and the G20—which means that IBSA needs to differentiate itself if it is to endure. This paper suggests a common vision for IBSA, based on the concept of international liberalism, implying an open international market, well-regulated capital markets and tailored domestic policies such as social policy, health policy and education policy, may well increase the weight IBSA can gain in different international forums.     

Institutions and savings in developing and emerging economies

Domestic savings are an important prerequisite for capital formation and growth. In this paper we analyze a new channel through which institutions influence aggregate savings and economic development. Whereas research in the field of savings decisions concentrates largely on the level of the individual, the literature on institutions and growth as well as on aggregate savings formation focuses on the aggregate, national level. First, we develop a framework that brings together both lines of reasoning, arguing that institutions may influence the individual savings decision as well as national savings in aggregate. This potential for institutional quality to influence economic performance has been neglected so far. Second, we build upon the empirical literature on aggregate savings formation and provide results supporting our hypothesis that better economic institutions drive aggregate savings formation upwards. By contrast, we do not find such effects in the case of the political environment. Our findings are robust when checked against a number of changes in explanatory variables, estimation methods and the treatment of instruments.     

Naturbasierte Lösungen im Klimaschutzrecht – zugleich eine Anmerkung zu 3a KSG

Natur und Recht - Mit Novellierung des Klimaschutzgesetzes (KSG) hat sich Deutschland ab 2045 zu Netto-Treibhausgasneutralität verpflichtet. Der Beitrag richtet den Blick auf die...     

The credibility of monetary reform – New evidence

The history of monetary policy is characterised by crisis and reform. The paper is dedicated to an explanation of what makes monetary reforms successful. A cross-sectional econometric analysis is chosen to deal with this problem. It is based on a standard macroeconomic model of commitment and credibility. As the dependent variable, we calculate a post-reform inflation rate. The exogenous variables are the degree of legal commitment, the constraining influence of institutions and a new variable for ex-ante credibility of the reform. The paper allows for the conclusion that monetary commitment, the consideration of institutional constraints and abstinence from the money press are crucial for the success of a monetary reform.     

Bribery and public procurement: an experimental study

A procurement contract is granted by a bureaucrat (the auctioneer) who is interested in a low price and a bribe from the provider. Procurement is thus a multi-dimensional bidding contest with one-dimensional type space (the privately known cost). The optimal price and bribe bid is derived based on an iid private cost assumption. In the experiment, bribes are negatively framed to capture that society is better off if bribes are rare or low. Although bid prices are lower than predicted, behavior is qualitatively in line with the linear equilibrium prediction. When bribes generate a negative externality, there is a significant increase in the variability of the data.