From Cash to Electronic Payments: Microeconomic, Macroeconomic, and Policy Aspects of Retail Payment Systems

This dissertation explores three aspects of the economics and policy issues surrounding retail payments (low-value frequent payments): the microeconomic aspect, by measuring costs associated with retail payment instruments; the macroeconomic aspect, by quantifying the impact of the use of electronic rather than paper-based payment instruments on consumption and GDP; and the policy aspect, by identifying barriers that keep countries stuck with outdated payment systems, and recommending policy interventions to move forward with payments modernization. Payment system modernization has become a prominent part of the financial sector reform agenda in many advanced and developing countries. Greater use of electronic payments rather than cash and other paper-based instruments would have important economic and social benefits, including lower costs and thereby increased economic efficiency and higher incomes, while broadening access to the financial system, notably for people with moderate and low incomes. The dissertation starts with a general introduction on retail payments. Chapter 1 develops a theoretical model for measuring payments costs, and applies the model to Guyana—an emerging market in the midst of the transition from paper to electronic payments. Using primary survey data from Guyanese consumers, the results of the analysis indicate that annual costs related to the use of cash by consumers reach 2.5 percent of the country’s GDP. Switching to electronic payment instruments would provide savings amounting to 1 percent of GDP per year. Chapter 2 broadens the analysis to calculate the macroeconomic impacts of a move to electronic payments. Using a unique panel dataset of 76 countries across the 17-year span from 1998 to 2014 and a pooled OLS country fixed effects model, Chapter 2 finds that on average, use of debit and credit cards contribute USD 16.2 billion to annual global consumption, and USD 160 billion to overall annual global GDP. Chapter 3 provides an in-depth assessment of the Albanian payment cards and remittances market and recommends a set of incentives and regulations (both carrots and sticks) that would allow the country to modernize its payment system. Finally, the conclusion summarizes the lessons of the dissertation’s research and brings forward issues to be explored by future research in the retail payments area.

Who Governs Educational Change? The Paradoxes of State Power and the Pursuit of Educational Reform in Post-Neoliberal Ecuador (2007-2015)

This study identifies and compares competing policy stories of key actors involved in the Ecuadorian education reform under President Rafael Correa from 2007-2015. By revealing these competing policy stories the study generates insights into the political and technical aspects of education reform in a context where state capacity has been eroded by decades of neoliberal policies. Since the elections in 2007, President Correa has focused much of his political effort and capital on reconstituting the state’s authority and capacity to not only formulate but also implement public policies. The concentration of power combined with a capacity building agenda allowed the Correa government to advance an ambitious comprehensive education reform with substantive results in equity and quality. At the same time the concentration of power has undermined a more inclusive and participatory approach which are essential for deepening and sustaining the reform. This study underscores both the limits and importance of state control over education; the inevitable conflicts and complexities associated with education reforms that focus on quality; and the limits and importance of participation in reform. Finally, it examines the analytical benefits of understanding governance, participation and quality as socially constructed concepts that are tied to normative and ideological interests.

THE IMPACT OF UPPER-LEVEL PROCESSES ON THE INTENSITY AND STRUCTURAL CHANGES OF HURRICANE SANDY (2012)

The first part of this study examines the relative roles of frontogenesis and tropopause undulation in determining the intensity and structural changes of Hurricane Sandy (2012) using a high-resolution cloud-resolving model. A 138-h simulation reproduces Sandy’s four distinct development stages: (i) rapid intensification, (ii) weakening, (iii) steady maximum surface wind but with large continued sea-level pressure (SLP) falls, and (iv) re-intensification. Results show typical correlations between intensity changes, sea-surface temperature and vertical wind shear during the first two stages. The large SLP falls during the last two stages are mostly caused by Sandy’s moving northward into lower-tropopause regions associated with an eastward-propagating midlatitude trough, where the associated lower-stratospheric warm air wraps into the storm and its surrounding areas. The steady maximum surface wind occurs because of the widespread SLP falls with weak pressure gradients lacking significant inward advection of absolute angular momentum (AAM). Meanwhile, there is a continuous frontogenesis in the outer region during the last three stages. Cyclonic inward advection of AAM along each frontal rainband accounts for the continued expansion of the tropical-storm-force wind and structural changes, while deep convection in the eyewall and merging of the final two survived frontal rainbands generate a spiraling jet in Sandy’s northwestern quadrant, leading to its re-intensification prior to landfall. The physical, kinematic and dynamic aspects of an upper-level outflow layer and its possible impact on the re-intensification of Sandy are examined in the second part of this study. Above the outflow layer isentropes are tilted downward with radius as a result of the development of deep convection and an approaching upper-level trough, causing weak subsidence. Its maximum outward radial velocity is located above the cloud top, so the outflow channel experiences cloud-induced long-wave cooling. Because Sandy has two distinct convective regions (an eyewall and a frontal rainband), it has multiple outflow layers, with the eyewall’s outflow layer located above that of the frontal rainband. During the re-intensification stage, the eyewall’s outflow layer interacts with a jet stream ahead of the upper-level trough axis. Because of the presence of inertial instability on the anticyclonic side of the jet stream and symmetric instability in the inner region of the outflow layer, Sandy’s secondary circulation intensifies. Its re-intensification ceases when these instabilities disappear. The relationship between the intensity of the secondary circulation and dynamic instabilities of the outflow layer suggests that the re-intensification occurs in response to these instabilities. Additionally, it is verified that the long-wave cooling in the outflow layer helps induce symmetric instability by reducing static stability.