Current Research Projects

Regional Integration in Sub-Saharan Africa

Since the early 1990s, the number of regional trade agreements has increased significantly in both developed and developing countries. By creating a larger market for trade and investments, these regional relations may accelerate economic growth and improve welfare levels. The research project aims at identifying the drivers of regional integration with a focus on sub-Saharan Africa (African Continental Free Trade Agreement, AfCFTA). Furthermore, it empirically examines the effects on bilateral trade within this regional trade agreement.

 

Institution Building and Good Governance in Developing Countries

It is widely accepted that high-quality institutions and good governance are important for economic and social development. Many studies have shown that institutional quality and good governance are major prerequisites for higher growth rates in the mid- to long-term. The research project aims to analyze the drivers of changes in these two areas, that is, the political and economic factors that enhance the quality of institutions and ensure that good governance prevails.

 

Determinats of Foreign Direct Investment

Foreign Direct Investment (FDI) inflows are widely perceived to be superior to other types of capital inflows. Apart from offering additional investment resources, FDI may help host countries foster economic development by offering more (and, sometimes, better paid) jobs as well as access to internationally available technologies and managerial know-how. These factors in turn render it easier for the host countries to penetrate foreign markets and make them less prone to sudden reversal of flows in times of crisis. The research project examines the determinants of FDI, in particular political ones, and their effect on different types of FDI, like greenfield and brownfield investments.

 

Globalization and Industrialization

The increasing globalization of the world economy offers developing countries numerous opportunities in terms of fostering industrialization. Exports and the GDP growth rate may increase and new jobs may be created. For those developing countries, that have had a rather lower per capita income level, this applies especially to labor-intensive manufacturing products. On the other hand, globalization also entails risks, for example due to increasing competition from imports from other countries. This research project examines the effects of the increasing integration of developing countries into the world economy on the industrial sector in the respective countries (value added, employment).

 

Trade Liberalisation and IMF Structural Adjustment Programs

Most countries significantly liberalized their trade policy over the past decades resulting in halving the world-wide average tariff rate. Reasons for this drastic shift have been identified in economic crisis, internal interests, the spread of policy ideas, and external pressure. One piece of the puzzle regarding external pressure might be conditionality to lower tariff rates in Structural Adjustment Programs (SAPs) of the International Monetary Fund (IMF) during times of economic crisis. At the same time, non-tariff measures became the dominant trade policy tool of many countries, a dynamic known as trade policy substitution.  In this light, we investigate the effects of conditionality to decrease tariff rates by the IMF on tariff and non-tariff measures.

 

The Effect of Generator Ownership on Firm Productivity during Power Outages in East Africa

Unreliable electricity supply is a widespread problem in developing countries and past studies suggest a negative effect of power outages on firm performance. However, there has been relatively little research on how generator ownership might mitigate these negative effects and when the acquisition of generators is profitable for firms. This research project examines the impact of power outages on firm productivity in East Africa considering the effect of generator ownership in general and during blackouts using data from the World Bank Enterprise Survey.

 

Mitigating climate change in food consumption

Contemporary consumer food choices and the production practices that support them put extensive pressure on the environment. Unsustainable food systems, particularly diets high in meat and other animal protein, contribute markedly to climate change. In order to achieve necessary greenhouse gas reductions in the food sector, policy mixes need to address both the supply-side as well as the demand-side. This research aims to examine different demand-side policies to support the transition to a sustainable, low carbon food system.