From stabilisation to stagnation. Viktor Yanukovych's reforms. OSW Point of View Number 32, March 2013

After winning the 2010 presidential election, Viktor Yanukovych and his government developed an ambitious and comprehensive programme of reforms across key areas of social and political life. The return to a presidential system of government created the ideal conditions for the introduction of deep reforms: it allowed Viktor Yanukovych to consolidate more power than any other Ukrainian president before him.The authorities launched an overhaul of the tax and the pension systems, and of the Ukrainian gas sector. Kyiv also completed its negotiations on an Association Agreement with the EU and on a Deep and Comprehensive Free Trade Area. However, the reformist zeal of Ukraine’s political elite progressively diminished as the parliamentary election approached, the economy slowed down, and the polls showed a decline in support for the ruling Party of Regions. Many of the reforms still remain in the planning stages, and in many areas the government has moved backwards. Viktor Yanukovych has proved unable to make systemic changes, and has increasingly used his powers to crush political opposition in Ukraine. The outcome of the latest parliamentary elections prevents the formation of a stable parliamentary majority, which in turn, removes any chance of reform before the 2015 presidential ballot.

Russia's best ally: The situation of the Russian oil sector and forecast for its future. OSW Study 39/2012

Oil is a strategic raw material for Russia and one of fundamental significance for the functioning of the state and its future. Taxes on oil production and exports are the most important source of state budget revenues which guarantee Russia maintains its political and economic stability. Russia is building its international position on the basis of its vast raw material and energy potential. While a great number of various publications have been devoted to Russian gas and Gazprom, surprisingly little research has been done into the present condition and possible future developments of the Russian oil sector, despite the fact that oil has and will have a much greater impact than gas on the functioning and the future of Russia. The main objective of this text is to describe the present situation of the Russian oil sector, its problems and the challenges it is posing, as well as the government’s policy towards this key branch of the Russian economy. This will be an introduction to an attempt to answer to the questions about the possible future production and the export levels of Russian oil, also broken down into the European and Asian directions.

Simulation of Land Use and Investment Behaviour under Different Policy Scenarios: Results of the extended farm/household model. Factor Markets Working Paper No. 27, July 2012

Factor markets are a central issue in analyses of farm development and of agricultural sector vitality. Among the different production factors, land is one of the most studied. Several studies seek to estimate the effect of government policy payments on land value or land rental prices. The studies mostly agree that government payments and other types of policy support are significant in explaining land prices and account for a large share of them. In October 2011, the European Commission published a new policy proposal for the common agricultural policy (CAP) up to 2020. The proposed regulation includes a shift from historical to regional payments. The objective of this paper is to provide an ex ante analysis of the impact of the new CAP policy instruments on the land market. In particular, the effect of the regionalisation of payments in Italy is examined. The analysis is based on the use of a mathematical programming model to simulate the changes in land demand for a farm in Emilia Romagna. The results highlight the relevance of the new policy mechanism in determining a change in land demand. Yet the effect is highly dependent on initial ownership of entitlements under the historical payment scheme.

The Labour Allocation Decisions of Farm Households: Defining a theoretical model. Factor Markets Working Paper No. 31, October 2012

This paper presents a theoretical model for the analysis of decisions regarding farm household labour allocation. The agricultural household model is selected as the most appropriate theoretical framework; a model based on the assumption that households behave to maximise utility, which is a function of consumption and leisure, and is subject to time and budget constraints. The model can be used to describe the role of government subsidies in farm household labour allocation decisions; in particular the impact of decoupled subsidies on labour allocation can be examined. Decoupled subsidies are a labour-free payment and as such represent an increase in labour-free income or wealth. An increase in wealth allows farm households to work less while maintaining consumption. On the other hand, decoupled subsidies represent a decline in the return to farm labour and may lead to a substitution effect, i.e., farmers may choose to substitute non-farm work for farm work. The theoretical framework proposed in this paper allows for the examination of these two conflicting effects.

Influence of the Common Agricultural Policy and Heterogeneous Land Quality on Land Rent and Land Allocation. Factor Markets Working Paper No. 38, March 2013

Against the background of the current discussion about the EU’s common agricultural policy (CAP) after 2013, the question of the impact of government support on land prices is crucially important. Validation of the CAP’s success also hinges on a proper assessment of a choice of policy instruments. This study therefore has the objective of investigating on a theoretical basis the effects of different government support measures on land rental prices and land allocation. The different measures under consideration are the price support, area payments and decoupled single farm payments (SFPs) of the CAP. Our approach evaluates the potential impact of each measure based on a Ricardian land rent model with heterogeneous land quality and multiple land uses. We start with a simple model of one output and two inputs, where a Cobb-Douglas production technology is assumed between the two factors of land and non-land inputs. In a second step, an outside option is introduced. This outside option, as opposed to land use of the Ricardian type, is independent of land quality. The results show that area payments and SFPs become fully capitalised into land rents, whereas in a price support scheme the capitalisation depends on per-acreage productivity. Moreover, in a price support scheme and a historical model, the capitalisation is positively influenced by land quality. Both area payments and price supports influence land allocation across different uses compared with no subsidies, where the shift tends to be larger in an area payment scheme than in a price support scheme. By contrast, SFPs do not influence land allocation.

A Spatial Analysis of Agricultural Land Prices in Bavaria. Factor Markets Working Document No. 50, June 2013

This paper empirically analyses a dataset of more than 7,300 agricultural land sales transactions from 2001 and 2007 to identify the factors influencing agricultural land prices in Bavaria. We use a general spatial model, which combines a spatial lag and a spatial error model, and in addition account for endogeneity introduced by the spatially lagged dependent variable as well as other explanatory variables. Our findings confirm the strong influence of agricultural factors such as land productivity, of variables describing the regional land market structure, and of non-agricultural factors such as urban pressure on agricultural land prices. Moreover, the involvement of public authorities as a seller or buyer increases sales prices in Bavaria. We find a significant capitalisation of government support payments into agricultural land, where a decrease of direct payments by 1% would decrease land prices in 2007 and 2001 by 0.27% and 0.06%, respectively. In addition, we confirm strong spatial relationships in our dataset. Neglecting this leads to biased estimates, especially if aggregated data is used. We find that the price of a specific plot increases by 0.24% when sales prices in surrounding areas increase by 1%.

Development of Multisector Alliances (MSAs): Organization and Leadership. ACES Working Papers, 2012

The research team reviewed numerous several multi- sectoral entities and identified nine GGNs that became the subject of our case studies. The research team conducted semi-structured interviews with executives and staff from each of these GNNs and prepared a profile, including a description of the unique evolution of the organization, goals and objectives, organizational structure and governance arrangements for each GGN. The following list provides an overview of the nine GGNs profiled: 1. Every Woman Every Child is an unprecedented global effort that mobilizes and amplifies action by governments, multilaterals, the private sector, research centers, academia and civil society to address life-threatening health challenges facing women and children globally. 2. HERproject catalyzes global partnerships and local Networks to improve female workers’ general and reproductive health in eight emerging economies. 3. R4 Rural Resilience Initiative is a cutting-edge, strategic, large-scale partnership between the public and private sectors to innovate and develop better tools to help the world’s most vulnerable people build resilient livelihoods. 4. Extractive Industry Transparency Initiative is a coalition of governments, companies, civil society groups, investors and international organizations that aims to improve transparency and accountability in the extractives sector. 5. Global Network for Neglected Tropical Diseases works with international partners at the highest level of government, business and society to break down the logistical and financial barriers to delivering existing treatments for the seven most common neglected tropical diseases. 6. Global Alliance for Improved Nutrition is an alliance that supports public-private partnerships to increase access to the missing nutrients in diets necessary for people, communities and economies to be stronger and healthier. 7. Inter-Agency Network For Education in Emergencies is a global Network of individuals and representatives from NGOs, United Nations and donor agencies, governments, academic institutions, schools and affected populations working to ensure all persons have the right to a quality and safe education in emergencies and post- crisis recovery. 8. mHealth Alliance works with diverse partners to advance mobile-based or mobile-enhanced solutions that deliver health through research, advocacy, support for the development of interoperable solutions and sustainable deployment models. 9. The Rainforest Alliance is a global non-profit that focuses on environmental conservation and sustainable development and works through collaborative partnerships with various stakeholders.

Potemkin conservatism. An ideological tool of the Kremlin. OSW Point of View 48, February 2015

Since the beginning of his third presidential term, Vladimir Putin has consistently invoked conservative ideology. Thus he legitimises the Kremlin’s new political strategy, the aim of which is to stabilise the regime and prevent any political mobilisation in Russia around a liberal agenda. This strategy is also intended to strengthen the legitimacy of the current model of government, by portraying it as ‘traditional’ for Russia; and to justify the government’s repressive and anti-Western policies. It also includes the policy of reintegrating the post-Soviet space under the auspices of Moscow, as evidenced by the annexation of Crimea and the Novorossiya project. This strategy was devised as a response to the galvanisation of adherents of liberalisation in Russia, namely the new middle class and a part of the business and administrative elites who publicly demonstrated their dissatisfaction with the regime in 2011 and 2012. However, the dissonance between the conservative slogans mouthed by the ruling elite and its actual conduct suggest that the Kremlin’s ‘conservative project’ is purely instrumental in nature, which in the longer term will undercut its effectiveness by undermining its credibility in the eyes of Russian society.

European Union Leadership and Enlargement in 2014. Jean Monnet/Robert Schuman Paper Series Vol. 14 No. 14, July 2014

On July 15, 2014 the European Parliament confirmed the new European Commission President. An absolute majority was needed for this purpose, and the 422 votes “For” cleared the 376-vote threshold in the legislative body of 751 members. A Grand Coalition has been formed among the three largest political parties: the European People’s Party (EPP), the Progressive Alliances of Socialists Democrats (S&D), and the Alliance of Liberals and Democrats for Europe (ALDE). Considering policy decisions going forward, the European Union (EU) faces the pressing question: Will there be more, less, or similar power from the EU? There are a greater number voices from across the political spectrum contributing to the democratic plurality. European leaders may regain trust by acknowledging that future governance will not be “business as usual” as the reform agenda gets underway. 2014 has been an exciting and important year in European politics. “This time is different” was the motto for the European Parliament’s election campaign. This essay analyzes recent EU political trends with the new Commission leadership and the Parliamentary elections results. The Parliamentary elections, held in late May, and the new European Commission, planned to be in place in the autumn, influence the leadership direction of the 28-member bloc. Additionally, this year on July 1 Croatia celebrated the first anniversary of joining the EU in 2013. Leading the way for candidate countries, Croatia embraces the democratic politics and capitalist market economics embodied by the EU. The greater number of seats held by newer political parties in the European Parliament demonstrates increasing plurality in the EU democracy. The Parliamentary elections have taken place every 5 years since 1979. In this eighth legislative session, the EPP and the S&D remain the largest parties represented, with 221 and 191 seats respectively. As the EU has evolved, a greater number of voices influence politics. The ongoing point of contention on a host of policies is national sovereignty in relation to pooled sovereignty in the EU. The European Parliament is important for democracy in EU governance since it is the direct link from the national citizens to their elected leaders at the supranational level. The representatives of the European Commission are appointed by the national governments of Member States, and their heads of government are the representatives to the European Council. These three political institutions – the European Parliament, the European Commission, and the European Council – together with other important institutions, including the European Court of Justice Luxembourg, form the EU. The new European Commission President is Jean-Claude Juncker, former Prime Minister and Minister of Finance of Luxembourg (1995-2013). After being nominated by the European Council on June 27, his candidacy was voted on by the European Parliament on July 15, according to the guidelines of the Lisbon Treaty. The leadership for the President of the European Commission has been an important issue, considering Britain’s deliberations on whether or not to stay in the EU in the face of a future national referendum. Voting on June 27, among the European Council on the nomination of Commission President-Designate Juncker, was 26 in favor and 2 opposed. Only Viktor Orbán, the prime minister of Hungary, joined David Cameron, the prime minister of the United Kingdom (UK), with a negative vote (Spiegel and Parker 2014). The UK had not been supportive, being concerned that Juncker embraces the policies of a federalist, prioritizing an ever-closer union above the interests of individual Member States. Historically, since joining the predecessor institution of the European Economic Community in 1973, the UK has had a relatively independent attitude about participation in the EU.

Combating corruption in Ukraine – the beginning of a long march. OSW COMMENTARY Number 170, 06.05.2015

From a public opinion point of view, corruption has been the gravest problem of today’s Ukraine, excepting the armed conflict in the east of the country. The government might be able to delay certain key reforms such as the constitutional reform or the reform of local government structures, however, without stepping up measures to combat corruption they would face the risk of losing social support which has already been weak. There is no single strategy for combating corruption in Ukraine. What has been implemented is a series of often contradictory concepts and actions (initiated by the president’s office, the government, civil society institutions, or launched to meet the requirements of donors). The successes of the new government have included efforts aimed at fighting corruption at the middle level of government and the introduction of legislative changes in compliance with international practice. The main weaknesses, on the other hand, have been the lack of efficient mechanisms to implement the adopted legislation to ensure that an individual charged with corruption (regardless of political connections) could be effectively tried and the money received as bribery could be returned to the state. Similarly, the judiciary system has not been prepared to actively handle corruption cases.

The ‘Visible Hand’ of the ECB’s Quantitative Easing. CEPS Working Document No. 407/May 2015

Quantitative easing à la ECB has produced so far an impact on long-term nominal rates through ex ante channels: signalling channels, term duration channels, and risk premia channels. The term duration channel will also lead to a lengthening of the average maturity of government debts, with possible implications for fiscal policy. The ECB’s determination to buy government bonds in a fragmented market with a low net supply may also produce an ex post impact, during the actual asset purchases, but less on nominal rates and more on financial plumbing, as recent volatility suggests. As the effects of scarce supply in collateral markets are felt, repo rates remain well below zero. Lower supply and limited re-usability of high quality collateral, capped by regulatory requirements, is a constraint on market liquidity and compresses dealers’ balance sheets. By keeping a depressed yield curve and asset prices high, QE may also accelerate the consolidation of both traditional and capital-market based (dealer) bank business models. What is less clear is how these changing business models will interact with the sharp rise of the asset management industry in the aftermath of the crisis, which raises questions about the implications for global collateral flows and deposit-like funding channels.