Two IEE members, Prof. Dr. Wilhelm Löwenstein, Dr. Elkhan Richard Sadik-Zada, and a former RUB student and current European Investment Fund and Center for Economic Development & Social Change fellow, Mattia Ferrari, published an article on Privatization in the Latin American Power Sector.
The authors explore the cross-national impact of privatization in the network industries on the access to network services. They focus on the assessment of the electricity sector in 20 Latin American countries and analyse the time series between 1985 and 2010. To control for the relevance of the subsidiarity (social commons) argument, they assess the interaction between commodification and the role of the sub-national governments in the power sector. Privatization was found to have a statistically significant positive effect on the level of electricity access. In the absence of federalism, it was shown that privatization in the electricity sector had a greater impact on electrification than was the case with a federalist government system. Federalism had a positive impact on the electricity access if electricity was mainly generated and supplied by state-owned enterprises. Another interesting finding is the relationship between the degree of subsidiarity and electrification: A higher degree of subsidiarity had a negative effect on electrification. This could be a result of the increasing transaction costs and rent-seeking behaviour in decentralized settings. The study complements the existing literature by analysing the privatization reform from the subsidiarity perspective.
Wilhelm Löwenstein, Elkhan Richard Sadik-Zada and Mattia Ferrari (2018): Privatization and the Role of Sub-National Governments in the Latin American Power Sector: A Plea for less Subsidiarity?, in: International Journal of Energy Economics and Policy, Volume 8, No.1, pp. 95-103.
In addition, Prof. Dr.Wilhelm Löwenstein and Dr.Elkhan Richard Sadik-Zada co-authored an article on revenue distribution and rent-seeking incentive in the International Journal of Energy Economics and Policy.
The paper presents a simple model of rent-seeking incentive to explain the emergence and dominance of rapacious rent-seeking policies in a number of oil-abundant developing and transitional economies. The Hubbertian distribution of the commodity exports over time, the magnitude of these revenues, and the availability of offshore havens for the illicitly appropriated rent explain the shift from productive public policies to rapacious rent-seeking. In addition, we show that the existence of the well-functioning democratic institutions prior to the revenue boom precludes the emergence of rapacious rent-seeking institutions due to prohibitively high costs of rent-seeking. The paper complements the existing literature by delivering a novel theoretical rationale for the predisposition of the oil-rich countries to the resource curse.
Wilhelm Löwenstein and Elkhan Richard Sadik-Zada (2018): A Note on Revenue Distribution Patterns and Rent-Seeking Incentive, in: International Journal of Energy Economics and Policy, Volume 8, No.2, pp. 196-204.
Raffael Beier published an article on the role of the city in the 'Arab Spring' in the transdisciplinary journal "City".
The paper departs from the observation thta cities were at the centre of the ‘Arab Spring’ to ask whether they played a decisive role or were just the passive settings in which these uprisings took place. The paper develops a new way of understanding the role of the city in social movements by looking at changes and continuities in urban policy in North Africa after the ‘Arab Spring’. The paper’s main argument is that the role of the city in social movements can be understood through an analysis of governments’ urban policy responses to those movements. First, it shows that North African urban policy has always reacted sensitively to social unrest and that neoliberal planning schemes have even strengthened this sensitivity. Second, the paper provides an empirical comparative analysis of urban policy in Egypt, Morocco, and Tunisia after the ‘Arab Spring’. The study shows that public authorities give pivotal attention to public space and to informal settlements as they have been stigmatised as breeding grounds of social unrest and as a threat to the political establishment.
Raffael Beier (2018): Towards a new perspective on the role of the city in social movements - Urban Policy after the ‘Arab Spring’, in: City, published online first.
Britta Niklas published two articles (one as a co-author) in the Journal of Wine Economics:
The first paper analyses the impact of annual weather fluctuations on the total output of wine and on the share of output of different wine-quality categories in Germany, using a set of wine data from all 13 German wine regions and daily weather data taken from regional weather stations. The empirical analysis suggests that rising average temperatures have a significantly positive impact on the total output of wine as well as on the output shares of wine in higher quality categories. The number of freezing days appears to be detrimental to overall production; precipitation during the growing season particularly impairs higher-quality wines.
Britta Niklas (2017): Impact of Annual Weather Fluctuations on Wine Production in Germany, in: Journal of Wine Economics, Volume 12, Issue No. 4, pp. 436 – 445.
The second paper analyses wine price dispersion in the United Kingdom. In particular, the authors examined whether Fairtrade wines were different from non-Fairtrade wines. Because Fairtrade wines serve an additional social purpose, one may think that consumers search less aggressively for the outlet with the lowest price, thus allowing for a larger price dispersion than for regular wines. The draws on data from about seven thousand wines from South Africa, Fairtrade and non-Fairtrade; sold in the United Kingdom between 2007 and 2012. In a first step, the applied a hedonic regression model explaining the wine prices using Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) Instrumental Variable (IV) approaches. In the next step, they regressed the squared residuals from the first step on a Fairtrade 0-1 dummy variable. When using the squared residuals from the OLS model, the found that Fairtrade is a negative determinant of price dispersion. Therefore, Fairtrade wines exhibit a significant lower price dispersion than the comparison group. However, when using the squared residuals from the IV model, the authors found the opposite, lending support to the initial hypothesis.
Britta Niklas, Karl Storchmann and Nick Vink (2017): Fairtrade Wine Price Dispersion in the United Kingdom, in: Journal of Wine Economics, Volume 12, Issue No. 4, pp. 446 – 456.
In the context of his PhD thesis, Casper Agaton recently published three articles plus one article as a co-author. These papers inform the debate on renewable energy investments in developing countries by comparing the attractiveness of investing in renewable sources with alternative options of continued use of carbon-based energy sources or investment in nuclear energy.
The first paper aims to analyse the comparative attractiveness of either investing in various renewable energy sources or continuing the use of coal for electricity generation in the Philippines. Using the Real Options approach, this research evaluates the investment value and trigger prices of coal for switching technologies with some scenarios in coal price uncertainty and social discount rate. The results show that investing in renewable energy is a better option than continuing to use coal for electricity generation. Among renewable energy sources, geothermal is the most attractive to invest in, followed by wind, hydroelectric, and solar photovoltaic.
Casper B. Agaton (2018): Use coal or invest in renewables: a real options analysis of energy investments in the Philippines, in: Renewables: Wind, Water, and Solar, Volume 5, pp. 1–8.
Casper Agaton co-authored the second paper with his thesis supervisor Helmut Karl. The paper evaluates the attractiveness of investing in renewable energy sources over continuing to burn oil for electricity generation using the case of Palawan island in the Philippines. The paper applies the Real Options approach to analyse how the timing of investment in renewable energy depends on volatility of diesel price, electricity price, and externality for using oil. This research found a positive net present value for renewable energy investment. Under uncertainty in oil prices, dynamic optimization describes how waiting or delaying investment in renewables incurs losses. Decreasing the local electricity price and incorporating negative externality favour investment in renewable energy over continuing the use of oil for electricity generation. The Real Options approach highlights the flexibility in the timing of making investment decisions. At the current energy regime in the Philippines, substituting renewable energy is a better option than continuing to import oil. Policies should aim at supporting investment in more sustainable sources of energy by imposing externality for oil use or decreasing the price of electricity.
Casper B. Agaton and Helmut Karl (2018): A real options approach to renewable electricity generation in the Philippines, in: Energy, Sustainability and Society, Volume 8, pp. 1–9.
The third paper evaluates the comparative attractiveness of either investing in alternative energy sources or continuing the use of coal for electricity generation in the Philippines. Applying the Real Options approach under coal price uncertainty, the study analyses investment values and optimal timing of switching technologies from coal to renewable or nuclear energy. It also examines how negative externality and the risk of nuclear accidents affect investment decisions. Results identify possible welfare losses from waiting or delaying investing in alternative energy. Negative externality favours investment in nuclear energy over coal, whereas the risk of nuclear accident favours investment in renewable energy.
Casper B. Agaton (2017): Coal, renewable, or nuclear? A real options approach to energy investments in the Philippines, in: International Journal of Sustainable Energy and Environmental Research, Volume 2, pp. 50–61.
The fourth paper departs from the observation that, with continuously rising energy demand and much dependence on imported fossil fuels, the Philippines is developing more sustainable sources of energy. Renewable energy seems to be a better alternative for meeting the country’s energy supply and security concerns. Despite its huge potential, investment in renewable energy sources is challenged by competitive prices of fossil fuels, high start-up cost for renewables, and lower feed-in-tariff rates for renewables. To address these problems, the study aims to analyse energy investment scenarios in the Philippines using the Real Options approach. It compares the attractiveness of investing in renewable energy over continuing to use coal for electricity generation under uncertainties in coal prices, investments cost, electricity prices, growth of investment in renewables, and imposing a carbon tax for using fossil fuels.
Casper B. Agaton (2017): Real options analysis of renewable energy investment scenarios in the Philippines, in: Renewable Energy and Sustainable Development, Volume 3, Issue 3, pp. 284–292.
PhD IDS graduate Diotima Chattoraj recently published an article on displacement of Sri Lankan Tamils that was also part of her PhD work.
This paper focuses on the experiences, challenges and aspirations of three middle-aged Sri Lankan Tamil displaced persons in Colombo, who are reluctant to return to their places of origin in the northern provinces of Sri Lanka due to several personal and professional reasons. The paper aims to analyse the diverse experiences they faced due to displacement. It also uncovers strategies used to cope in a new city and portrays the differences they experience between the places they came from and the city they now live in. The empirical point of departure has been drawn from the stories of three middle-aged Sri Lankan Tamil Displaced persons in Colombo. The paper argues that they have adapted to their place of displacement and view the city as a more suitable place to live compared to their places of origin. In addition, they also identify displacement as a blessing in disguise as they believe integrating in Colombo helped them aspire to a better future, which would have never been possible in their places of origin. Thus, this paper provides a picture of how they have reconstructed their lives in Colombo and how this has led them to reconsider and renegotiate their relationships to their 'homes'.
Diotima Chattoraj (2018): Experiences of Sri Lankan Tamils Displaced to Colombo: Three Narratives, in: eTropic Volume 17, Issue 1, pp. 137-148.
You can subscribe to our newsletter via this link:
Or have a look at our current Newsletter first.