The Role of Goods Trade Networks for Services Trade Volume

In this paper, we address the role of countries’ goods-trade networks for their services-trade volume. The paper employs a large cross section of bilateral trade data on aggregate cross-border goods and services sales and illustrates that the depth and overlap of two countries’ services networks induce a positive direct impact on their services-trade volume. The evidence takes into account that goods trade flows and networks are potentially endogenous so that the estimated direct effects support a causal interpretation. We find that the magnitude of the multilateral goods-trade network effect on the bilateral services-trade volume is much larger than that of bilateral goods-trade volume.

Secondary Forests and Local Livelihoods along a Gradient of Accessibility: A Case Study in Northern Laos

Rural livelihoods in developing countries can be enhanced by improving access to natural resources, services, and markets. In remote rural areas of the humid or semihumid tropics, forests represent an important resource for livelihoods. In countries like Laos, where most primary forest has been converted to secondary forest, and where an intricate and interlinked mosaic of forest and farmland prevails, people depend on secondary forests as a prime source of goods and services. The linkages between local livelihoods and secondary forest resources are subject to changes caused by improving accessibility. This article studies how accessibility affects the condition of forests and local livelihoods by comparing three villages along a gradient of accessibility in Phonxay district, Luang Prabang province, northern Laos. The results of this research show that accessibility strengthens the influence of the government and of markets, and that local livelihoods improve with increasing accessibility, while forest condition deteriorates.

Practice Movements: The Politics of Non-sovereign Power

Practice movements, that is, forms of unorganized collective action, are a central site of politics. Their defining moments are that their goals are expressed in practices rather than in words, and that these “pre-ideological” practices aim at access to or redistribution of goods, whether material or symbolic, rather than at representation. They are transgression rather than resistance in that they transgress restrictions inherent in the material organization of space, property relations, status orders, and normative regulations, be they laws, morals, or customs. Practice movements are above all about access and participation rather than about autonomy, and thus have an ambiguous relation to the transformation of the status quo. Their politics are transformative and they can produce temporary or lasting changes in the material grounds or in the regulation of the everyday life of those who pursue them, and potentially of the normativity and the organization of the wider social order.

Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

Implications of the sustainable development paradigm for Switzerland

The sustainable development paradigm raises issues of global, intra- and intergenerational social equity as well as respect for nature, and economic welfare. Switzerland is confronted by these issues within its own country, and has a moral responsibility vis-a-vis the rest of the world. Syndromes of global change are affecting many eco-regions, not only in developing and transition countries, but to a lesser extent also the affluent countries. Switzerland as a nation has an impact on syndromes through its far-reaching economic activities, which are non-sustainable. At the global level, more modest consumption patterns, a considerably slowed demographic change, a nonconsumptive but sustainable use of natural resources, and conflict transformation are the main prerequisites for improving sustainability. Switzerland's current contribution to sustainability is much less than what it could be, hence the need for additional action along general principles in,accordance with Swiss traditions and innovative potentials. A number of concrete actions could be taken immediately. These are: labelling the socially and ecologically sustainable production of goods and services, and their negotiation at WTO level; enhancing international cooperation and research; strengthening education and research for sustainability, and emphasizing energy and material flux efficiency at home and abroad.

To fuse or not to fuse? Assessing the case for convergent disciplines on goods and services trade

Think piece by Pierre Sauvé for the E15 Initiative on Strengthening the Global Trade System In his latest essay for the ICTSD-World Economic Forum E15 initiative on Strengthening the Global Trade and Investment System for Sustainable Development, WTI Director of External Programmes and Academic Partnerships and faculty member Pierre Sauvé explores the case for fusing the law of goods with that of services in a world of global value chains. The paper does so by directing attention to the questions of whether the current architectures of multilateral and preferential trade governance are compatible with a world of trade in tasks; whether the existing rules offer globally active firms a coherent structure for doing business in a predictable environment; whether it is feasible to redesign the structure and content of existing trade rules to align them to the reality of production fragmentation; and what steps can be envisaged to better align policy and realities in the marketplace if the prospects for restructuring appear unfavourable. The paper argues that fusing trade disciplines for goods and services is neither needed nor feasible and may actually deflect attention from a number of worthwhile policy initiatives where more realistic (if never easily secured) prospects of generic rule-making may well exist.

Benchmarking analogue models of brittle thrust wedges

We performed a quantitative comparison of brittle thrust wedge experiments to evaluate the variability among analogue models and to appraise the reproducibility and limits of model interpretation. Fifteen analogue modeling laboratories participated in this benchmark initiative. Each laboratory received a shipment of the same type of quartz and corundum sand and all laboratories adhered to a stringent model building protocol and used the same type of foil to cover base and sidewalls of the sandbox. Sieve structure, sifting height, filling rate, and details on off-scraping of excess sand followed prescribed procedures. Our analogue benchmark shows that even for simple plane-strain experiments with prescribed stringent model construction techniques, quantitative model results show variability, most notably for surface slope, thrust spacing and number of forward and backthrusts. One of the sources of the variability in model results is related to slight variations in how sand is deposited in the sandbox. Small changes in sifting height, sifting rate, and scraping will result in slightly heterogeneous material bulk densities, which will affect the mechanical properties of the sand, and will result in lateral and vertical differences in peak and boundary friction angles, as well as cohesion values once the model is constructed. Initial variations in basal friction are inferred to play the most important role in causing model variability. Our comparison shows that the human factor plays a decisive role, and even when one modeler repeats the same experiment, quantitative model results still show variability. Our observations highlight the limits of up-scaling quantitative analogue model results to nature or for making comparisons with numerical models. The frictional behavior of sand is highly sensitive to small variations in material state or experimental set-up, and hence, it will remain difficult to scale quantitative results such as number of thrusts, thrust spacing, and pop-up width from model to nature.

Exploring complementarities between goods and services trade in trade agreements

More than three decades of research on trade costs and goods trade have unveiled fundamental insights into the determinants, the nature and the consequences of goods trade agreements. A cottage literature has also evolved studying similar issues from a services trade perspective, but the two-way interaction between goods and services trade has not been explored formally. We bridge this gap by providing a formal treatment of the inter-linkages between goods and services trade. The model provides insights into how trade agreements impact goods and services trade. We also explore the impact of the complementarities of goods and services agreements on goods and services trade empirically using bilateral goods and services trade data for OECD and BRICS trading partners over 1995-2010.

Innovation and Development in the Age of Climate Change Adaptation: Open or Closed?

Change Adaptation: Open or Closed? Paper read at the Second African International Economic Law Network Conference, 7-8 March 2013, Wits School of Law, Johannesburg, South Africa. In a time of rapid convergence of technologies, goods, services, hardware, software, the traditional classifications that informed past treaties fail to remove legal uncertainty, or advance welfare and innovation. As a result, we turn our attention to the role and needs of the public domain at the interface of existing intellectual property rights and new modes of creation, production and distribution of goods and services. The concept of open culture would have it that knowledge should be spread freely and its growth should come from further developing existing works on the basis of sharing and collaboration without the shackles of intellectual property. Intellectual property clauses find their way into regional, multilateral, bilateral and free trade agreements more often than not, and can cause public discontent and incite unrest. Many of these intellectual property clauses raise the bar on protection beyond the clauses found in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In this paper we address the question of the protection and development of the public domain in service of open innovation in accord with Article 15 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) in light of the Objectives (Article 7) and Principles (Article 8) set forth in TRIPS. Once areas of divergence and reinforcement between the intellectual property regime and human rights have been discussed, we will enter into options that allow for innovation and prosperity in the global south. We then conclude by discussing possible policy developments.

The Mountain Research Initiative Reaches Outward and Clombs Upward

Mountain regions provide a multitude of goods and services for much of humanity (Price and Butt 2000; Becker and Bugmann 2001), especially in the realms of water supply, biodiversity, and other ecosystem services (Schimel et al 2002; Körner et al 2005; Viviroli et al 2007; Viviroli et al 2011). However, the future ability of mountain regions to provide goods and services to both highland and lowland residents is seriously threatened by climatic changes, environmental pollution, unsustainable management of natural resources, and serious gaps in understanding of mountain systems (Huber et al 2005). Disciplinary, interdisciplinary, and transdisciplinary research is required to maintain these goods and services in the face of these forces. The global mountain research community, however, has historically operated at a suboptimal level because of insufficient communication across geographic and linguistic barriers, less than desirable coordination of research frameworks, and a lack of funding.

Information Systems Outsourcing. Enduring themes, global challenges, and process opportunities

he notion of outsourcing – making arrangements with an external entity for the provision of goods or services to supplement or replace internal efforts – has been around for centuries. The outsourcing of information systems (IS) is however a much newer concept but one which has been growing dramatically. This book attempts to synthesize what is known about IS outsourcing by dividing the subject into three interrelated parts: (1) Traditional Information Technology Outsourcing, (2) Information Technolgy Offshoring, and (3) Business Process Outsourcing. The book should be of interest to all academics and students in the field of Information Systems as well as corporate executives and professionals who seek a more profound analysis and understanding of the underlying factors and mechanisms of outsourcing.

The Trade Versus Culture Discourse: Tracing its Evolution in Global Law

The intensified flows of goods, services, peoples and ideas across borders intrinsic to globalization have had numerous and multi-faceted effects. Those affecting culture have been perhaps the most controversial, as it is more often than not difficult to identify the spill-overs across economic and non-economic areas and across borders, as it is equally hard to qualify the effects of these spill-overs as positive or negative. The debate also tends to be politically and even emotionally charged, which has so far not proven advantageous to establishing a genuine dialogue, nor to finding solutions. This contention and the divergent interests of major players in the international community have been reflected in the institutions and rules of global law. It is the objective of this chapter to explore this institutional architecture, in particular its main (and opposing) constituent fora of the World Trade Organization (WTO) and the United Nations Educational Social and Cultural Organization (UNESCO). The chapter traces the evolution of these institutions and their interaction over time, as well as the underlying objectives, demands and strategies of the key proponents in the trade versus culture discourse, which ultimately shaped the existent law and policy. The chapter concludes with an appraisal of the present state of affairs situating the discussion into the contemporary global governance landscape.

Taking a New Look at Neo-Assyrian Gates

The Assyrian capitals are not only known for their magnificent temples and palaces, but also for their monumental city walls. The most impressive and at the same time most delicate features of all the town defenses were the city gates. As they interrupted the line of defense, they were al-ways a vulnerable spot of every system of fortifications. However, the walled cities’ economic needs demanded these gateways to be built, in order to ensure the steady flow of goods and pro-visions. Apart from that, they also had a significant ideological meaning, which is emphasized by many cuneiform texts. During the excavations of the Assyrian capitals of Ashur, Dūr Šarrūkīn, and Nineveh, a fairly large number of Assyrian city gates were brought to light. By re-examining the archaeological reports and employing remote sensing, many details of these structures can still be revealed. The paper aims at illuminating the different considerations that went into constructing these gates, as well as the development Assyrian city gates underwent and what may have influenced this process.

A "Beyond WTO" Scenario for Swiss Agriculture: Consequences for Income Generation and the Provision of Public Goods

The conclusion of the Doha Round negotiations is likely to influence Swiss agricultural policy substantially. The same goes for a free trade agreement in agriculture and food with the European Communities. Even though neither of them will bring about duty-free and quota-free market access, or restrict domestic support measures to green box compatible support, both would represent a big step in that direction. There is no empirical evidence on the effect of such a counterfactual scenario for Swiss agriculture. We therefore use a normative mathematical programming model to illustrate possible effects for agricultural production and the corresponding agricultural income. Moreover, we discuss the results with respect to the provision of public goods under the assumption of continuing green box-compatible direct payments. The aim of our article is to bring more transparency into the discussion on the effects of freer and less distorted trade on the income generation by a multifunctional agriculture. The article will be organized as follows. In the first Section we specify the background of our study. In the second section, we focus on the problem statement and our research questions. In Section 3, we describe in detail a counterfactual scenario of “duty-free, quota-free and price support-free” agriculture from an economic as well as a legal perspective. Our methodology and the results are presented in Section 4 and 5 respectively. In Section 6, we discuss our results with respect to economic and legal aspects of multifunctional agriculture.