Poverty and the Environment : Investment Poverty and the Role of Assets in Generating Welfare for Farmer Households in the Province of Herrera, Panama

Köyhiä maanviljelijöitä on usein syytetty kehitysmaiden ympäristöongelmista. On väitetty, että eloonjäämistaistelu pakottaa heidät käyttämään maata ja muita luonnonvaroja lyhytnäköisesti. Harva asiaa koskeva tutkimus on kuitenkaan tukenut tätä väitettä; perheiden köyhyyden astetta ja heidän aiheuttamaansa ympäristövaikutusta ei ole kyetty kytkemään toisiinsa. Selkeyttääkseen köyhyys-ympäristö –keskustelua, Thomas Reardon ja Steven Vosti kehittivät investointiköyhyyden käsitteen. Se tunnistaa sen kenties suuren joukon maanviljelijäperheitä, jotka eivät ole köyhiä perinteisten köyhyysmittareiden mukaan, mutta joiden hyvinvointi ei ole riittävästi köyhyysrajojen yläpuolella salliakseen perheen investoida kestävämpään maankäyttöön. Reardon ja Vosti korostivat myös omaisuuden vaikutusta perheiden hyvinvointiin, ja uskoivat sen vaikuttavan tuotanto- ja investointipäätöksiin. Tässä tutkimuksessa pyritään vastaamaan kahteen kysymykseen: Miten investointiköyhyyttä voidaan ymmärtää ja mitata? Ja, mikä on viljelijäperheiden omaisuuden hyvinvointia lisäävä vaikutus? Tätä tutkimusta varten haastateltiin 402 maanviljelijäperhettä Väli-Amerikassa, Panaman tasavallan Herreran läänissä. Näiden perheiden hyvinvointia mitattiin heidän kulutuksensa mukaan, ja paikalliset köyhyysrajat laskettiin paikallisen ruoan hinnan mukaan. Herrerassa ihminen tarvitsee keskimäärin 494 dollaria vuodessa saadakseen riittävän ravinnon, tai 876 dollaria vuodessa voidakseen ravinnon lisäksi kattaa muitakin välttämättömiä menoja. Ruoka- eli äärimmäisen köyhyyden rajan alle jäi 15,4% tutkituista perheistä, ja 33,6% oli jokseenkin köyhiä, eli saavutti kyllä riittävän ravitsemuksen, muttei kyennyt kustantamaan muita perustarpeitaan. Molempien köyhyysrajojen yläpuolelle ylsi siis 51% tutkituista perheistä. Näiden köyhyysryhmien välillä on merkittäviä eroavaisuuksia ei vain perheiden varallisuuden, tulojen ja investointistrategioiden välillä, mutta myös perheiden rakenteessa, elinympäristössä ja mahdollisuuksissa saada palveluja. Investointiköyhyyden mittaaminen osoittautui haastavaksi. Herrerassa viljelijät eivät tee investointeja puhtaasti ympäristönsuojeluun, eikä maankäytön kestävyyttä muutenkaan pystytty yhdistämään perheiden hyvinvoinnin tasoon. Siksi investointiköyhyyttä etsittiin sellaisena hyvinvoinnin tasona, jonka alapuolella elävien perheiden parissa tuottavat maanparannusinvestoinnit eivät enää ole suorassa suhteessa hyvinvointiin. Tällaisia investointeja ovat mm. istutetut aidat, lannoitus ja paranneltujen laiduntyyppien viljely. Havaittiin, että jos perheen hyvinvointi putoaa alle 1000 dollarin/henkilö/vuosi, tällaiset tuottavat maanparannusinvestoinnit muuttuvat erittäin harvinaisiksi. Investointiköyhyyden raja on siis noin kaksi kertaa riittävän ravitsemuksen hinta, ja sen ylitti 42,3% tutkituista perheistä. Heille on tyypillistä, että molemmat puolisot käyvät työssä, ovat korkeasti koulutettuja ja yhteisössään aktiivisia, maatila tuottaa paremmin, tilalla kasvatetaan vaativampia kasveja, ja että he ovat kerryttäneet enemmän omaisuutta kuin investointi-köyhyyden rajan alla elävät perheet. Tässä tutkimuksessa kyseenalaistettiin yleinen oletus, että omaisuudesta olisi poikkeuksetta hyötyä viljelijäperheelle. Niinpä omaisuuden vaikutusta perheiden hyvinvointiin tutkittiin selvittämällä, mitä reittejä pitkin perheiden omistama maa, karja, koulutus ja työikäiset perheenjäsenet voisivat lisätä perheen hyvinvointia. Näiden hyvinvointi-mekanismien ajateltiin myös riippuvan monista väliin tulevista tekijöistä. Esimerkiksi koulutus voisi lisätä hyvinvointia, jos sen avulla saataisiin paremmin palkattuja töitä tai perustettaisiin yritys; mutta näihin mekanismeihin saattaa vaikuttaa vaikkapa etäisyys kaupungeista tai se, omistaako perhe ajoneuvon. Köyhimpien perheiden parissa nimenomaan koulutus olikin ainoa tutkittu omaisuuden muoto, joka edisti perheen hyvinvointia, kun taas maasta, karjasta tai työvoimasta ei ollut apua köyhyydestä nousemiseen. Varakkaampien perheiden parissa sen sijaan korkeampaa hyvinvointia tuottivat koulutuksen lisäksi myös maa ja työvoima, joskin monesta väliin tulevasta muuttujasta, kuten tuotantopanoksista riippuen. Ei siis ole automaatiota, jolla omaisuus parantaisi perheiden hyvinvointia. Vaikka rikkailla onkin yleensä enemmän karjaa kuin köyhemmillä, ei tässä aineistossa löydetty yhtään mekanismia, jota kautta karjan määrä tuottaisi korkeampaa hyvinvointia viljelijäperheille. Omaisuuden keräämisen ja hyödyntämisen strategiat myös muuttuvat hyvinvoinnin kasvaessa ja niihin vaikuttavat monet ulkoiset tekijät. Ympäristön ja köyhyyden suhde on siis edelleen epäselvä. Köyhyyden voittaminen vaatii pitkällä tähtäimellä sitä, että viljelijäperheet nousisivat investointiköyhyyden rajan yläpuolelle. Näin heillä olisi varaa alkaa kartuttaa omaisuutta ja investoida kestävämpään maankäyttöön. Tällä hetkellä kuitenkin isolle osalle herreralaisia perheitä tuo raja on kaukana tavoittamattomissa. Miten päästä yli tuhannen dollarin kulutukseen perheenjäsentä kohden, mikäli elintaso ei yllä edes riittävään ravitsemukseen? Ja sittenkin, vaikka hyvinvointi kohenisi, ei ympäristön kannalta parannuksia ole välttämättä odotettavissa, mikäli karjalaumat kasvavat ja eroosioalttiit laitumet leviävät.

From Francovich to Köbler and beyond : The evolution of a State liability regime for the EC

The aim of this paper is to present the evolution of the Francovich doctrine within the European legal order. The first part deals with the gradual development of the ECJ's case law on State liability in damages for breach of EC law. Starting from the seminal Francovich and Brasserie du Pêcheur, the clarification of the criteria set by the Court is attempted with reference to subsequent case law, whereas issues concerning the extent and form of the compensation owned are also mentioned. The second part concerns one of the more recent developments in the field, namely State liability for breaches of Community law attributed to national judiciary. The Court's ruling in Köbler is examined in connection with two other recent judgments, namely Commission v. Italy of 2003 and Kühne & Heitz, as an attempt of the ECJ to reframe its relationships with national supreme courts and appropriate for itself the position of the Supreme Court in the European legal order. The implications on State liability claims by the ruling in Commission v. France of 1997 constitute the theme of the third part, where it is submitted that Member States can also be held liable for disregard of Community law by private individuals within their respected territories. To this extent, Schmidberger is viewed as a manifestation of this opinion, with fundamental rights acquiring a new dimension, being invoked by the States, contra the individuals as a shield to liability claims. Finally, the third part examines the relationship between the Francovich doctrine and the principle of legal certainty and concludes that the solutions employed by the ECJ have been both predictable and acceptable by the national legal orders. Keywords: State liability, damages, Francovich, Köbler, Schmidberger

The Politics of Pulp Investment and the Brazilian Landless Movement (MST)

The Politics of Pulp Investment and the Brazilian Landless Movement (MST) The paper industry has been moving more heavily to the global South at the beginning of the 21st century. In a number of cases the rural populations of the global South have engaged in increasingly important resistance in their scuffle with the large-scale tree plantation-relying pulp investment model. The resistance had generally not yet managed to slow down Southern industrial tree plantation expansion until 2004. After all, even the MST, perhaps the strongest of the Southern movements, has limited power in comparison to the corporations pushing for plantation expansion. This thesis shows how, even against these odds, depending on the mechanisms of contention and case-specific conflict dynamics, in some cases the movements have managed to slow and even reverse plantation expansion. The thesis is based on extensive field research in the Brazilian countryside. It outlines a new theory of contentious agency promotion, emphasizing its importance in the shaping of corporate resource exploitation. The thesis includes a Qualitative Comparative Analysis of resistance influence on the economic outcomes of all (14) Brazilian large-scale pulp projects between 2004-2008. The central hypothesis of the thesis is that corporate resource exploitation can be slowed down more effectively and likely when the resistance is based on contentious agency. Contentious agency is created by the concatenation of five mutually supporting mechanisms of contention: organizing and politicizing a social movement; heterodox framing of pulp projects; protesting; networking; and embedding whilst maintaining autonomy. The findings suggest that contentious agency can slow or even reverse the expansion of industrial plantations, whereas when contentious agency promotion was inactive, fast or even unchecked plantation expansion was always the outcome. The rule applied to all the assessed 14 pulp conflict cases. The hypothesis gained strong support even in situations where corporate agency promotion was simultaneously active. In previous studies on social movements, there has been a lack of contributions that help us understand the causal mechanisms of contention influencing economic outcomes. The thesis answers to the call by merging a Polanyian analysis of the political economy with the Dynamics of Contention research program and making a case for the impact of contentious agency on capital accumulation. The research concludes that an efficient social movement can utilize mechanisms of contention to promote the potential of activism among its members and influence investment outcomes. Protesting, for example via pioneering land occupations, seemed to be particularly important. Until now, there has been no comprehensive theory on when and how contentious agency can slow down or reverse the expansion of corporate resource exploitation. The original contribution of this research is to provide such a theory, and utilize it to offer an extensive explanation on the conflicts over pulp investment in Brazil, the globalization of the paper industry, and slowing of industrial plantation expansion in the global South.

The Macroeconomic Effects of Fiscal Policy in a Small Open Economy under a Flexible Exchange Rate Regime

This licentiate's thesis analyzes the macroeconomic effects of fiscal policy in a small open economy under a flexible exchange rate regime, assuming that the government spends exclusively on domestically produced goods. The motivation for this research comes from the observation that the literature on the new open economy macroeconomics (NOEM) has focused almost exclusively on two-country global models and the analyses of the effects of fiscal policy on small economies are almost completely ignored. This thesis aims at filling in the gap in the NOEM literature and illustrates how the macroeconomic effects of fiscal policy in a small open economy depend on the specification of preferences. The research method is to present two theoretical model that are extensions to the model contained in the Appendix to Obstfeld and Rogoff (1995). The first model analyzes the macroeconomic effects of fiscal policy, making use of a model that exploits the idea of modelling private and government consumption as substitutes in private utility. The model offers intuitive predictions on how the effects of fiscal policy depend on the marginal rate of substitution between private and government consumption. The findings illustrate that the higher the substitutability between private and government consumption, (i) the bigger is the crowding out effect on private consumption (ii) and the smaller is the positive effect on output. The welfare analysis shows that the less fiscal policy decreases welfare the higher is the marginal rate of substitution between private and government consumption. The second model of this thesis studies how the macroeconomic effects of fiscal policy depend on the elasticity of substitution between traded and nontraded goods. This model reveals that this elasticity a key variable to explain the exchange rate, current account and output response to a permanent rise in government spending. Finally, the model demonstrates that temporary changes in government spending are an effective stabilization tool when used wisely and timely in response to undesired fluctuations in output. Undesired fluctuations in output can be perfectly offset by an opposite change in government spending without causing any side-effects.

Oligarchs, political regime changes, and firm valuation

This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin-Putin regime shift in Russia, we find that the valuations of outside shareholders claims are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweigh the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results show that effects driven by the political regime change complement the traditional view stating that increased ownership concentration improved the performance of Russian oligarch firms.

Discursive (de)legitimation of a contested Finnish greenfield investment project in Latin America

Despite the central role of legitimacy in corporate social responsibility debate, little is known of subtle meaning-making processes through which social actors attempt to establish or de-establish legitimacy for socially contested corporate undertakings, and through which they, at the same time, struggle to define the proper social role and responsibility of corporations. We investigated these processes in the context of the intense socio-political conflict around the Finnish forest industry company Metsa¨-Botnia’s world-scale pulp mill in Uruguay. A critical discursive analysis of Finnish media texts highlights three types of struggle that characterized the media coverage: legalistic argumentation, truth fights, and political battles. Interestingly, this case illustrates how the corporate representatives — with the help of the national media — tend to frame the issue in legalistic terms, emphasize their expert knowledge in technical and environmental evaluations, and distance themselves from political disputes. We argue that similar tendencies are likely to characterize corporate social responsibility debates more generally.

Essays on Financial Analyst Forecasts and Recommendations

The trade of the financial analyst is currently a much-debated issue in today’s media. As a large part of the investment analysis is conducted under the broker firms’ regime, the incentives of the financial analyst and the investor do not always align. The broker firm’s commercial incentives may be to maximise its commission from securities trading and underwriting fees. The purpose of this thesis is to extend our understanding of the work of a financial analyst, the incentives he faces and how these affect his actions. The first essay investigates how the economic significance of the coverage of a particular firm impacts the analysts’ accuracy of estimation. The hypothesis is that analysts put more effort in analysing firms with a relatively higher trading volume, as these firms usually yield higher commissions. The second essay investigates how analysts interpret new financial statement information. The essay shows that analysts underreact or overreact to prior reported earnings, depending on the short-term pattern in reported earnings. The third essay investigates the possible investment value in Finnish stock recommendations, issued by sell side analysts. It is established that consensus recommendations issued on Finnish stocks contain investment value. Further, the investment value in consensus recommendations improves significantly through the exclusion of recommendations issued by banks. The fourth essay investigates investors’ behaviour prior to financial analysts’ earnings forecast revisions. Lately, the financial press have reported cases were financial analysts warn their preferred clients of possible earnings forecast revisions. However, in the light of the empirical results, it appears that the problem of analysts leaking information to some selected customers does not appear systematically on the Finnish stock market.

Real Estate Investment and Uncertainty: Econometric Modelling using Finnish Data

The purpose of this paper is to test for the effect of uncertainty in a model of real estate investment in Finland during the hihhly cyclical period of 1975 to 1998. We use two alternative measures of uncertainty. The first measure is the volatility of stock market returns and the second measure is the heterogeneity in the answers of the quarterly business survey of the Confederation of Finnish Industry and Employers. The econometric analysis is based on the autoregressive distributed lag (ADL) model and the paper applies a 'general-to-specific' modelling approach. We find that the measure of heterogeneity is significant in the model, but the volatility of stock market returns is not. The empirical results give some evidence of an uncertainty-induced threshold slowing down real estate investment in Finland.

The impact of stock option incentives on investment and firm value

This paper analyzes the relations among firm-level stock option portfolio incentives, investment, and firm value based on a sample of Finnish firms during the time period 1987 – 2000. Utilizing exact and complete information regarding stock option portfolio characteristics, we find some evidence that firm investment is increasing in the incentives to increase stock price (delta) and risk (vega). Furthermore, we find strong evidence of a positive relation between both incentive effects and firm value (Tobin’s Q). In contrast, when we allow for stock option incentives, investment, and firm value to be simultaneously determined, we find no evidence that investment is increasing in incentives. However, even after controlling for endogeneity, we find that both incentive effects arising from stock option compensation display a positive and significant effect on firm value. Finally, in contradiction to earlier findings, we observe that neither Tobin’s Q nor investment drives incentives.

The link between foreign aid, public investment and economic growth

Länsimaat ovat rahoittaneet kehitysyhteistyöhankkeita jo lähes kuuden vuosikymmenen ajan, mutta kehitysavun tehokkuudesta ei olla edelleenkään päästy yksimielisyyteen. Yksi avunantajamaiden tapa vaikuttaa kehitysavun tehokkuuteen, eli avun vaikutukseen vastaanottajamaan taloudellisen kasvun kiihdyttäjänä, on sitoa ne julkisen sektorin infrastruktuurihankkeisiin. Joissain tapauksissa tämä vaikuttaa avun vastaanottajan käytökseen ja asenteisiin kehitysapua kohtaan. Tutkielmassa käsitellään kehitysavun tehokkuutta tilanteessa, jossa se on sidottu julkisen sektorin investointeihin kehitysmaassa. Tutkimus pohjaa Kalaitzidakisin ja Kalyvitisin (2008) malliin, jossa osa kehitysmaan julkisen talouden investoinneista rahoitetaan kehitysavulla. Seuraavaksi tarkastellaan ylijäämää tavoittelevan käyttäytymisen (rent- seeking) vaikutusta kehitysavun tehokkuuteen pohjaten Economidesin, Kalyvitisin ja Philippopoulosin (2008) malliin. Tutkielmassa referoidaan lisäksi tutkimuskysymystä sivuavia empiirisiä tutkimuksia, esitellään aluksi tavallisimmat kehitysyhteistyön muodot, sekä esitellään talousteoreettisia näkökulmia kehitysyhteistyön tehokkuuden määrittelylle. Tutkielma perustuu puhtaasti teoreettisiin malleihin ja niissä sovelletut menetelmät ovat matemaattisia. Tutkielmassa käsitellään ensin tapaus, jossa kehitysyhteistyöllä rahoitetaan julkisen sektorin investointihankkeita. Jossain tapauksissa kehitysavun kasvu lasku siirtää vastaanottajamaan kulutusta julkisista investoinneista kulutukseen, jolloin kehitysyhteistyövaroin osittain rahoitettujen hankkeiden koko pienenee, ja suhteellinen tehokkuus laskee. Seuraavaksi tarkastellaan tilannetta, jossa kehitysyhteistyövaroista vain osa päätyy hankkeen rahoittamiseen, ja todetaan, että kehitysavun tehokkuus ja vaikutus maan kansantulon kasvuun vähenee talouden toimijoiden ylijäämää tavoittelevan käyttäytymisen (mukaan lukien korruptio) myötä entisestään. Tämän tutkimuksen perusteella voidaan todeta, että kehitysapu vaikuttaa kehittyvän maan talouden kasvuun tapauksessa, jossa julkisia infrastruktuurihankkeita rahoitetaan osittain maan omin verovaroin ja osittain kehitysyhteistyövaroin. Ylijäämää tavoitteleva käyttäytyminen vaikuttaa kehitysavun tehokkuuteen negatiivistesti vähentäen kehitysavun positiivisia kasvuvaikutuksia.

Does Uncertainty Affect Investment and Labor Demand?

This paper analyzes the effect of uncertainty on investment and labor demand for Finnish firms during the time period 1987 – 2000. Utilizing a stock return based measure of uncertainty decomposed into systematic and idiosyncratic components, the results reveal that idiosyncratic uncertainty significantly reduces both investment and labor demand. Idiosyncratic uncertainty seems to influence investment in the current period, whereas the depressing effect on labor demand appears with a one-year lag. The results provide support that the depressing effect of idiosyncratic uncertainty on investment is stronger for small firms in comparison to large firms. Some evidence is reported regarding differential effects of uncertainty on labor demand conditional on firm characteristics. Most importantly, the depressing effect of lagged idiosyncratic uncertainty on labor demand tends to be stronger for diversified firms compared with focused firms.

Nonlinear mixture autoregressive model: economic applications

The aim of this dissertation is to model economic variables by a mixture autoregressive (MAR) model. The MAR model is a generalization of linear autoregressive (AR) model. The MAR -model consists of K linear autoregressive components. At any given point of time one of these autoregressive components is randomly selected to generate a new observation for the time series. The mixture probability can be constant over time or a direct function of a some observable variable. Many economic time series contain properties which cannot be described by linear and stationary time series models. A nonlinear autoregressive model such as MAR model can a plausible alternative in the case of these time series. In this dissertation the MAR model is used to model stock market bubbles and a relationship between inflation and the interest rate. In the case of the inflation rate we arrived at the MAR model where inflation process is less mean reverting in the case of high inflation than in the case of normal inflation. The interest rate move one-for-one with expected inflation. We use the data from the Livingston survey as a proxy for inflation expectations. We have found that survey inflation expectations are not perfectly rational. According to our results information stickiness play an important role in the expectation formation. We also found that survey participants have a tendency to underestimate inflation. A MAR model has also used to model stock market bubbles and crashes. This model has two regimes: the bubble regime and the error correction regime. In the error correction regime price depends on a fundamental factor, the price-dividend ratio, and in the bubble regime, price is independent of fundamentals. In this model a stock market crash is usually caused by a regime switch from a bubble regime to an error-correction regime. According to our empirical results bubbles are related to a low inflation. Our model also imply that bubbles have influences investment return distribution in both short and long run.

Development of foreign direct investment in Finland

During 1990 to 2009, Foreign Direct Investment (FDI henceforth) in Finland has fluctuated greatly. This paper focused on analyzing the overall development and basic characteristics of Foreign Direct Investment in Finland, covering the period from 1990 to present. By comparing FDI in Finland with FDI in other countries, the picture of Finland’s FDI position in the world market is clearer. A lot of statistical data, tables and figures are used to describe the trend of Foreign Direct Investment in Finland. All the data used in this study were obtained from Statistics Finland, UNCTAD, OECD, World Bank and International Labor Office, Investment map website and etc. It is also found that there is a big, long-lasting and increasing imbalance of the inward FDI and outward FDI in Finland, the performance of outward FDI is stronger than the inward FDI in Finland. Finland’s position of FDI in the world is rather modest. And based on existing theories, I tried to analyze the factors that might determine the size of the inflows of FDI in Finland. The econometric model of my thesis is based on time series data ranging from 1990 to 2007. A Log linear regression model is adopted to analyze the impact of each variable. The regression results showed that Labor Cost and Investment in Education have a negative influence on the FDI inflows into Finland. Too high labor cost is the main impediment of FDI in Finland, explaining the relative small size of FDI inflows into Finland. GDP and Economy openness have a significant positive impact on the inflows of FDI into Finland; other variables do not emerge as significant factor in affecting the size of FDI inflows in Finland as expected. Meanwhile, the impacts of the most recent financial and economic crisis on FDI in the world and in Finland are discussed as well. FDI inflows worldwide and in Finland have suffered from a big setback from the 2008 global crisis. The economic crisis has undoubtedly significant negative influence on the FDI flows in the world and in Finland. Nevertheless, apart from the negative impact, the crisis itself also brings in chances for policymakers to implement more efficient policies in order to create a pro-business and pro-investment climate for the recovery of FDI inflows. . The correspondent policies and measures aiming to accelerate the recovery of the falling FDI were discussed correspondently.