Samuel Brazys

From Tiger to PIIGS: Ireland and the use of heuristics in comparative political economy

Acronyms for groups of countries provide an often useful shorthand to capture emergent similarities, and terms such as PIIGS, BRICs and LDCs pervade the lexicon of international and comparative political economy. But they can also lead to misleading narratives, since the grounds for use of these terms as heuristic devices are usually not well elaborated. This can become problematic when the use of such heuristics drives market responses in areas such as risk perception and changes in interest rates. In this paper we look at the narrative construction of the group of countries that has been grouped as ‘PIIGS’ (Portugal, Ireland, Italy, Greece, and Spain). We examine the process whereby the group came into being, trace how Ireland became a member of this grouping, and assess the merits of classifying these countries together. Our contention is that the repetition of the acronym in public debate shaped the behaviour of market actors toward these countries. We find evidence of Granger causality, such that increased media usage of the term ‘PIIGS’ is followed by converging interest rate correlations between Ireland and the other PIIGS, compared to the interest rate correlations between Ireland and the ‘northern’ Eurozone economies. We argue that this is a pointer toward the independent effect of perceptions and discourse over economic fundamentals. We conclude with more general thoughts and cautions on the use of heuristics in comparative political economy.

Evidencing donor heterogeneity in Aid for Trade

ABSTRACT This paper is the culmination of a multi-country, multi-method investigation into the export effects of Aid for Trade (AfT). Building on previous single-donor statistical studies of AfT, this paper conducts a statistical study of 19 Organisation for Economic Co-operation and Development (OECD) AfT donors and then examines the delivery and implementation of AfT in four recipient countries – Indonesia, the Philippines, Timor-Leste and Vietnam – from four donor countries – Germany, Japan, Norway and the US. The paper finds considerable variation in the export effects of the AfT programs, ranging from programs with no impact on recipient country exports to programs that are positively correlated with recipient country exports to the donor country and/or the rest of the world. Taking a closer look at the AfT programs of Germany, Japan, Norway and the US suggests that differences in program design and implementation may account for differences in AfT export effects.

The Politics of Capitalist Diversity in Europe: Explaining Ireland’s Divergent Recovery from the Euro Crisis

The 2008 financial crisis hit few places harder than the Euro periphery. Faced with high levels of public debt, Portugal, Italy, Ireland, Greece, and Spain were each compelled to implement harsh austerity reforms. Yet despite this common policy response, the recoveries have shown significant divergence. In particular, Ireland seems to have managed to succeed economically in a way that the other peripheral countries have not. The prevailing narrative is that Ireland’s recovery from the crisis is due to “austerity” and improved “cost competitiveness.” Drawing upon theories from the study of comparative capitalism we challenge this narrative, and argue that the Irish recovery is an outcome of a state-led enterprise policy aimed at nurturing a close relationship with corporate firms from Silicon Valley. Using qualitative and quantitative investigation we find evidence that this state-led FDI growth model, rather than austerity induced competitiveness, kick-started Ireland’s recovery from crisis. As Ireland is a critical case for the “success” story of austerity in Europe, our findings represent a significant challenge to the politics of adjustment. It suggests the strategies of business-state elites, and not simply the workings of electoral coalitions, explains the politics of adjustment in advanced capitalism.

Race to give? The selective effectiveness of United States trade capacity building assistance

ABSTRACT Pundits and scholars have long debated the effectiveness of foreign aid: does it lead to economic growth or is it simply throwing money ‘down the rat hole’? This paper re-invigorates the debate by examining the question through a new lens. Rather than examining the effectiveness of general foreign aid on economic growth, this paper tests the impact of targeted foreign aid on a narrower economic activity. Specifically, this paper investigates the impact of United States trade capacity building aid. This targeted aid aims to increase recipient countries’ exporting capacity, which may lead to growth, rather than directly increasing growth. If trade capacity building assistance is universally effective, one would expect to see increases in recipient-country exports to both the US and the rest of the world. If trade capacity building is selectively effective, recipient-country exports should increase only to the US. If trade capacity building is ineffective, one would expect no impact on recipient-country exports. This paper finds substantial support that US trade capacity building is selectively effective. US trade capacity building tends to increase recipient-country exports to the United States, but not to the rest of the world. Although the US results may not be generalizable to other donors, this approach suggests an easily expandable research program.

Why do states change positions in the United Nations General Assembly

Many international organizations deal with repeated items on their agendas. The United Nations General Assembly (UNGA) is no exception as many of its resolutions reoccur over time. A novel dataset on UNGA voting on repeated resolutions reveals considerable, but variable, amounts of change on resolutions by states over time. To shed light on underlying causes for voting (in)consistency, this paper draws on IR literature on negotiations and foreign policy changes to develop hypotheses on the role of domestic and international constraints. Our findings suggest that states with limited financial capacity cannot develop their own, principled, voting positions on all norms on the negotiation agenda. Consequently, these states can be more flexible in adjusting their voting position for reoccurring IO norms and are more prone to change their positions over time. Moreover, states with constrained decision-makers change position less frequently due to pluralistic gridlock. Finally, while large and rich states make a small number of purposive vote shifts, poor and aid-recipient states engage in ‘serial shifting’ on the same resolutions, a finding suggestive of vote-buying. The prevalence of position changes suggests that the international norm environment may be more fragile and susceptible to a revisionist agenda than is commonly assumed.

Outside looking in: Non-accession to the WTO

Since its institutional birth in 1947, the General Agreement on Tariffs and Trade (GATT) / World Trade Organization (WTO) has mushroomed from 23 original contracting parties to 157 members as of September 2012. Another 28 countries are currently observers, each at varying stages of the accession process. WTO members and observers cover some 99 per cent of the worlds population and over 99 per cent of global trade. However, there are still 13 states outside the multilateral rules-based trading system. This paper argues that existing explanations of membership and accession do not fully explain why these states remain outside the WTO, with implications for membership in international institutions generally. The paper tests hypotheses of non-membership based on a lack of willingness (domestic support), ability (technical capacity) or external pressure, and augments these statistical findings with a comparative country-level narrative of WTO (non-)accession decision-making in two small island countries.

Celtic phoenix or leprechaun economics? The politics of an FDI led growth model in Europe

ABSTRACT In this paper, we argue that Ireland’s post-crisis economic recovery in Europe was driven by foreign direct investment (FDI) from Silicon Valley, and while this growth model was made possible by Ireland’s low-corporate tax rates, it was also a result of these firms using Ireland to directly access the European labour market. We evidence this contention via sectoral and geographic analyses while simultaneously showing that Irish fiscal policies have not redistributed gains from the recovery to the broader population. As a result, the economic recovery has been most actively felt by those in the FDI sectors, including workers from the EU and beyond. Building on theories from the study of comparative capitalism, we suggest that this experience indicates that Ireland’s FDI-led growth model has created clear winners and losers, with significant distributional implications. The FDI growth regime been made possible by inward migration and European integration, but given the unequal distribution of the economic benefits that this generates, it is unlikely to be politically, or electorally, sustainable.

Canary in the Coal Mine? China, the UNGA and the Changing World Order

How China assumes its position of superpower is one of the most important questions regarding global order in the twenty-first century. While considerable and sustained attention has been paid to China’s growing economic and military might, work examining how China is attempting, if at all, to influence the ecosystem of global norms is in its earlier stages. In this article we examine China’s actions in an important venue for the development of global norms, the United Nations General Assembly (UNGA). Using a unique dataset that captures how other countries move into or out of alignment with China on UNGA resolutions that are repeated over time, we find statistical evidence that China used diplomatic and economic means in an attempt to subtly alter international norms. We further illustrate these findings by examining four states that made substantive moves toward China on resolutions concerning national sovereignty, democracy, international order, non-interference, and human rights.

Democracy or Accountability? Governance and Social Spending in Africa

Abstract In recent years, democracy has often served as shorthand for good governance when considering what facilitates development-friendly public expenditure. While recognising the sufficiency of democracy, we argue that it is accountability, achievable outside full democracy, that is the necessary component of governance. However, vague conceptualisations of accountability as ‘responsiveness’ or ‘answerability’ have prevented empirical work from exploring the relationship between accountability and public spending. In this paper we develop an understanding of accountability as the interaction between opposition, transparency, and enforcement and test its impact on social spending in Africa in both the presence and absence of electoral institutions.

Nothing to hide: Commitment to, compliance with, and impact of the special data dissemination standard

Understanding why states voluntarily cede power to international institutions, and if those institutions fulfill their stated goals, remain a pressing question in international relations. In order to evaluate the material and normative logics that may drive this type of behavior, this paper considers state commitment to and compliance with the Special Data Dissemination Standard (SDDS) initiative launched by the IMF in 1996. This effort seeks to enhance the availability of comprehensive economic data based on best dissemination practices to facilitate pursuing sound macroeconomic policies. Using panel data on 120 countries during the 1996–2011 period, we find that commitment to the SDDS occurs when costs for states are low, and that compliance with the SDDS initiative is associated with increased data transparency after controlling for self†section bias. Our results are robust to controlling for endogeneity, alternative sample, and estimation methods.