At the end of 2019, the world community was shocked by the spreading of an unknown virus from China. This virus was finally named COVID-19 and was categorized as a pandemic by WHO (World Health Organization). Of course, COVID-19 has an impact on many sectors, one of the sector is economy. As a result of this virus, the world economy is weakening and this is also greatly felt by Indonesia. The sector which is dealing directly with the impact of this virus is the banking sector. With the current conditions, the banking sector must adjust to survive even in the toughest condition.
{"title":"Banking vs COVID-19","authors":"Ariella Felita Vashti","doi":"10.2139/ssrn.3591224","DOIUrl":"https://doi.org/10.2139/ssrn.3591224","url":null,"abstract":"At the end of 2019, the world community was shocked by the spreading of an unknown virus from China. This virus was finally named COVID-19 and was categorized as a pandemic by WHO (World Health Organization). Of course, COVID-19 has an impact on many sectors, one of the sector is economy. As a result of this virus, the world economy is weakening and this is also greatly felt by Indonesia. The sector which is dealing directly with the impact of this virus is the banking sector. With the current conditions, the banking sector must adjust to survive even in the toughest condition.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130707867","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Return on assets of the Russian banks at 2019-end has significantly increased despite a slide in bank margin and slowdown of lending growth rates. This fact was due to both credit risk mitigation and putting in operation of a new procedure for loan loss accounting. In 2019 as a whole, bank assets’ growth rates have decreased.
{"title":"Financial Performance of the Banking Sector in 2019","authors":"S. Zubov","doi":"10.2139/ssrn.3554994","DOIUrl":"https://doi.org/10.2139/ssrn.3554994","url":null,"abstract":"Return on assets of the Russian banks at 2019-end has significantly increased despite a slide in bank margin and slowdown of lending growth rates. This fact was due to both credit risk mitigation and putting in operation of a new procedure for loan loss accounting. In 2019 as a whole, bank assets’ growth rates have decreased.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"83 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132768398","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The effect of structural reforms on growth in Europe and Central Asia is assessed by looking separately at each supply-side channel: capital, labor, and productivity, with the last estimated using the stochastic frontier approach. By controlling for the interaction with the economic cycle, the paper also investigates whether timing matters. Improvements in human capital, regulatory quality, and government effectiveness have the most impact on potential growth, along with financial development. European Union accession may also boost growth, mainly by encouraging capital deepening. However, changes in labor market regulation and tariffs may have ambiguous effects. Applying the results to Serbia, the analysis demonstrates that closing certain structural gaps with the frontier would help boost its potential.
{"title":"Structural Reforms to Set the Growth Ambition","authors":"Natasha Rovo","doi":"10.1596/1813-9450-9175","DOIUrl":"https://doi.org/10.1596/1813-9450-9175","url":null,"abstract":"The effect of structural reforms on growth in Europe and Central Asia is assessed by looking separately at each supply-side channel: capital, labor, and productivity, with the last estimated using the stochastic frontier approach. By controlling for the interaction with the economic cycle, the paper also investigates whether timing matters. Improvements in human capital, regulatory quality, and government effectiveness have the most impact on potential growth, along with financial development. European Union accession may also boost growth, mainly by encouraging capital deepening. However, changes in labor market regulation and tariffs may have ambiguous effects. Applying the results to Serbia, the analysis demonstrates that closing certain structural gaps with the frontier would help boost its potential.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117021928","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Popular support for democracy is the lifeblood of stable democratic systems. Yet existing research is poorly suited for explaining why democratic support falls and how it might rise again, because it uses static research designs, and identifies the sources of support as being fairly static factors such as institutions and political cultures. In contrast, this paper proposes and tests two explanations for changes in democratic support: a political-economic theory focusing on fluctuations in the effectiveness of governance, and a moral-economic theory focusing on variations in the impartiality of governance and political equality. Using dynamic, time-series, cross-sectional tests, we find that the most important drivers of changes in support are moral rather than political-economic. Preserving the legitimacy of democracy, and therefore its survival, rests on the extent to which democratic governments can curb corruption, treat citizens impartially, and provide more equitable access to power across class, ethnic, and gender divides.
{"title":"The Political and Moral Economies of Democratic Support","authors":"Christopher Claassen, Pedro C. Magalhães","doi":"10.2139/ssrn.3541814","DOIUrl":"https://doi.org/10.2139/ssrn.3541814","url":null,"abstract":"Popular support for democracy is the lifeblood of stable democratic systems. Yet existing research is poorly suited for explaining why democratic support falls and how it might rise again, because it uses static research designs, and identifies the sources of support as being fairly static factors such as institutions and political cultures. In contrast, this paper proposes and tests two explanations for changes in democratic support: a political-economic theory focusing on fluctuations in the effectiveness of governance, and a moral-economic theory focusing on variations in the impartiality of governance and political equality. Using dynamic, time-series, cross-sectional tests, we find that the most important drivers of changes in support are moral rather than political-economic. Preserving the legitimacy of democracy, and therefore its survival, rests on the extent to which democratic governments can curb corruption, treat citizens impartially, and provide more equitable access to power across class, ethnic, and gender divides.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"295 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116209452","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The role of religion in the development of law and order, in the progress of the government institutions and ultimately the state of economy has long occupied the minds of political economists. The obvious difficulty of this topic stems from the inability to stage and execute the controlled experiments, and the complexities of discovering the counterfactual evidence that would not be confounded by latent variables. In this paper we explore the novel approach to this problem that uses structural learning algorithms capable of finding the best-fit distributions for factors linking religion to major traits of the governance and economy. We find that the importance of religion in the society is conditionally independent from the economy given state institutions (rule of law and business regulations). This means a society with strong institutions can possibly develop a strong economy with no regard to religious beliefs.
{"title":"The Impact of Religion on Economic Development","authors":"D. Kharitonov","doi":"10.2139/ssrn.3539228","DOIUrl":"https://doi.org/10.2139/ssrn.3539228","url":null,"abstract":"The role of religion in the development of law and order, in the progress of the government institutions and ultimately the state of economy has long occupied the minds of political economists. The obvious difficulty of this topic stems from the inability to stage and execute the controlled experiments, and the complexities of discovering the counterfactual evidence that would not be confounded by latent variables. In this paper we explore the novel approach to this problem that uses structural learning algorithms capable of finding the best-fit distributions for factors linking religion to major traits of the governance and economy. We find that the importance of religion in the society is conditionally independent from the economy given state institutions (rule of law and business regulations). This means a society with strong institutions can possibly develop a strong economy with no regard to religious beliefs.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130060245","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the effect of political factionalism in the presence of weak state capacity on long-term economic growth. To this end, we exploit the 1958 civil uprising between Maronite Christian and Sunni Muslim factions in Lebanon to estimate the impact of factious tensions on long-term growth. To isolate the impact of the uprising, we use synthetic control estimator and match Lebanon’s pre-1958 growth and development trajectory with the rest of the world where such uprising did not occur, and construct the counterfactual growth trajectory in the hypothetical absence of the political factionalism. Our evidence indicates large and pervasive negative growth effects of factionalism. In the absence of factionalism-led uprising, our estimates imply that Lebanon’s per capita income down to the present day is four times higher than the actual level, and does not seem to be driven by pre-existing or subsequent trends and shocks. The negative long-term growth effect of factionalism is robust to a battery of spatial and temporal placebo checks, covariate selection tests and is not sensitive to the composition of control groups.
{"title":"Long-Term Economic Consequences of Factious Tensions: Evidence from Lebanon","authors":"R. Spruk, T. Emery","doi":"10.2139/ssrn.3538578","DOIUrl":"https://doi.org/10.2139/ssrn.3538578","url":null,"abstract":"We examine the effect of political factionalism in the presence of weak state capacity on long-term economic growth. To this end, we exploit the 1958 civil uprising between Maronite Christian and Sunni Muslim factions in Lebanon to estimate the impact of factious tensions on long-term growth. To isolate the impact of the uprising, we use synthetic control estimator and match Lebanon’s pre-1958 growth and development trajectory with the rest of the world where such uprising did not occur, and construct the counterfactual growth trajectory in the hypothetical absence of the political factionalism. Our evidence indicates large and pervasive negative growth effects of factionalism. In the absence of factionalism-led uprising, our estimates imply that Lebanon’s per capita income down to the present day is four times higher than the actual level, and does not seem to be driven by pre-existing or subsequent trends and shocks. The negative long-term growth effect of factionalism is robust to a battery of spatial and temporal placebo checks, covariate selection tests and is not sensitive to the composition of control groups.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114709426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using novel receivable-based-loan data, we study the effect of aging-report loan covenants on borrowers’ accounts receivable reporting quality. Our purpose is to highlight a channel that lenders use to obtain private information and to understand whether lenders’ information acquisition affects the financial reporting quality of borrowers. Compared to receivable-based borrowers without aging-report requirements (control firms), borrowers with such requirements (test firms) increase their receivable reporting quality significantly after loan initiations. The shift in reporting quality is more pronounced when borrowers have weak bargaining power. Our results lend support to the argument that lender information access affects borrowers’ reporting quality.
{"title":"Bank Monitoring and Financial Reporting Quality: The Case of Accounts-Receivable-Based Loans","authors":"Richard Frankel, B. Kim, Tao Ma, Xiumin Martin","doi":"10.2139/ssrn.3532028","DOIUrl":"https://doi.org/10.2139/ssrn.3532028","url":null,"abstract":"Using novel receivable-based-loan data, we study the effect of aging-report loan covenants on borrowers’ accounts receivable reporting quality. Our purpose is to highlight a channel that lenders use to obtain private information and to understand whether lenders’ information acquisition affects the financial reporting quality of borrowers. Compared to receivable-based borrowers without aging-report requirements (control firms), borrowers with such requirements (test firms) increase their receivable reporting quality significantly after loan initiations. The shift in reporting quality is more pronounced when borrowers have weak bargaining power. Our results lend support to the argument that lender information access affects borrowers’ reporting quality.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128244047","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I examine the activity of political elites during a period of intensive state-building in pre-imperial China. Using a novel hand-collected dataset on 1,075 political elites, I find that civil unrest was responsible for a majority of the deaths of elites, that there was substitution away from incumbent nobles towards commoners in administrative roles, and rising competition over administrative office-holding among clans. I argue that such substitution was made possible by the rise of a class of literate commoners as a new source of administrative human capital, and propose a model to explain their emergence. I postulate that civil unrest improves commoners' access to learning by displacing a fraction of literati and learned nobles and forcing them to make a living out of teaching, and enhanced productivity enables more commoners to acquire literacy to enter state services. I discuss mechanisms through which human capital can facilitate state-building.
{"title":"Political Elites and Human Capital Formation in Pre-Imperial China","authors":"Joy Chen","doi":"10.2139/ssrn.3530279","DOIUrl":"https://doi.org/10.2139/ssrn.3530279","url":null,"abstract":"I examine the activity of political elites during a period of intensive state-building in pre-imperial China. Using a novel hand-collected dataset on 1,075 political elites, I find that civil unrest was responsible for a majority of the deaths of elites, that there was substitution away from incumbent nobles towards commoners in administrative roles, and rising competition over administrative office-holding among clans. I argue that such substitution was made possible by the rise of a class of literate commoners as a new source of administrative human capital, and propose a model to explain their emergence. I postulate that civil unrest improves commoners' access to learning by displacing a fraction of literati and learned nobles and forcing them to make a living out of teaching, and enhanced productivity enables more commoners to acquire literacy to enter state services. I discuss mechanisms through which human capital can facilitate state-building.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127033811","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose: The study is aimed not only at determining the current state of the bank asset securitization market but also at developing methods and ways to improve the processes of bank asset securitization in Russia. Design/methodology/approach: The article presents the results of a survey of Russian market securitization over the last 10 years, where the author separately considers mortgage and non-mortgage securitization, conducts a discrete analysis of regulatory changes in securitization, and identifies the main problems in the development of this important economic process and the issues that have remained unresolved during the decade. The main methods of study chosen by the author are systematization, generalization and econometric analysis. Finding: The author has demonstrated that there is a strong inverse relationship between the mortgage lending volume and the interest rate, and has built a linear function of the estimated mortgage lending volume. The excess in the real mortgage lending volume over the estimates confirms that the current state policy, including state support and reduction of the Central Bank key rate, in the sphere of mortgage lending is indeed stimulating. Research limitations/implications: The development of securitization in Russia has been constrained not only by sanctions and bureaucratic inconsistencies in the requirements set for securitized assets, but also by delay in the access of the official bodies such as the Federal Service for State Registration, the Cadastre, and Cartography (“Rosreestre”) to modern technologies, as well as by the insecurity and distrust of digital financial service technologies.Quite different conclusions follow from the analysis of non-mortgage securitization, where the author supports and develops critical remarks expressed by other researchers in previous years. Originality/value: The survey results not only show the achievements of mortgage lending in Russia in recent years, but also provide valuable recommendations to help support the positive dynamics of mortgage lending and securitization development in the Russian Federation.
{"title":"Current State and Perspectives of Securitization Processes in the Russian Federation","authors":"Mariia Koniagina","doi":"10.2139/ssrn.3803117","DOIUrl":"https://doi.org/10.2139/ssrn.3803117","url":null,"abstract":"Purpose: The study is aimed not only at determining the current state of the bank asset securitization market but also at developing methods and ways to improve the processes of bank asset securitization in Russia. Design/methodology/approach: The article presents the results of a survey of Russian market securitization over the last 10 years, where the author separately considers mortgage and non-mortgage securitization, conducts a discrete analysis of regulatory changes in securitization, and identifies the main problems in the development of this important economic process and the issues that have remained unresolved during the decade. The main methods of study chosen by the author are systematization, generalization and econometric analysis. Finding: The author has demonstrated that there is a strong inverse relationship between the mortgage lending volume and the interest rate, and has built a linear function of the estimated mortgage lending volume. The excess in the real mortgage lending volume over the estimates confirms that the current state policy, including state support and reduction of the Central Bank key rate, in the sphere of mortgage lending is indeed stimulating. Research limitations/implications: The development of securitization in Russia has been constrained not only by sanctions and bureaucratic inconsistencies in the requirements set for securitized assets, but also by delay in the access of the official bodies such as the Federal Service for State Registration, the Cadastre, and Cartography (“Rosreestre”) to modern technologies, as well as by the insecurity and distrust of digital financial service technologies.Quite different conclusions follow from the analysis of non-mortgage securitization, where the author supports and develops critical remarks expressed by other researchers in previous years. Originality/value: The survey results not only show the achievements of mortgage lending in Russia in recent years, but also provide valuable recommendations to help support the positive dynamics of mortgage lending and securitization development in the Russian Federation.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130908973","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Christine Laudenbach, Ulrike Malmendier, Alexandra Niessen-Ruenzi
We analyze the long-term effects of living under communism and its anticapitalist doctrine on households’ financial investment decisions and attitudes towards financial markets. Utilizing comprehensive German brokerage data and bank data, we show that, decades after Reunification, East Germans still invest significantly less in the stock market than West Germans. Consistent with communist friends-and-foes propaganda, East Germans are more likely to hold stocks of companies from communist countries (China, Russia, Vietnam) and of state-owned companies, and are unlikely to invest in American companies and the financial industry. Effects are stronger for individuals exposed to positive “emotional tagging,” e.g., those living in celebrated showcase cities. Effects reverse for individuals with negative experiences, e.g., environmental pollution, religious oppression, or lack of (Western) TV entertainment. Election years trigger further divergence of East and West Germans. We provide evidence of negative welfare consequences due to less diversified portfolios, higher-fee products, and lower risk-adjusted returns.
{"title":"The Long-Lasting Effects of Living Under Communism on Attitudes Towards Financial Markets","authors":"Christine Laudenbach, Ulrike Malmendier, Alexandra Niessen-Ruenzi","doi":"10.2139/ssrn.3526926","DOIUrl":"https://doi.org/10.2139/ssrn.3526926","url":null,"abstract":"We analyze the long-term effects of living under communism and its anticapitalist doctrine on households’ financial investment decisions and attitudes towards financial markets. Utilizing comprehensive German brokerage data and bank data, we show that, decades after Reunification, East Germans still invest significantly less in the stock market than West Germans. Consistent with communist friends-and-foes propaganda, East Germans are more likely to hold stocks of companies from communist countries (China, Russia, Vietnam) and of state-owned companies, and are unlikely to invest in American companies and the financial industry. Effects are stronger for individuals exposed to positive “emotional tagging,” e.g., those living in celebrated showcase cities. Effects reverse for individuals with negative experiences, e.g., environmental pollution, religious oppression, or lack of (Western) TV entertainment. Election years trigger further divergence of East and West Germans. We provide evidence of negative welfare consequences due to less diversified portfolios, higher-fee products, and lower risk-adjusted returns.","PeriodicalId":443031,"journal":{"name":"Political Economy - Development: Political Institutions eJournal","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115559230","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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