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The Role of Fintech in Promoting Financial Inclusion in Developing Countries: THE CASE OF MEXICO
(2019)
Financial inclusion is globally on the rise since 2011; however, still, nearly 1.7 billion adults worldwide do not have a bank account at a formal institution (Demirguc- Kunt et al, 2018). Supply, demand and societal factors may lead to barriers to financial inclusion, and accelerate voluntarily and involuntarily exclusions in the developing countries (World Bank, 2008; Beck and De La Torre, 2006; Beck el at, 2008). With the mobile phone technology and advancements in the innovations, the number of participants has increased with the entrance of new challenger i.e. Fintech startups, in the financial services market. The literature reveals that Fintech has a great
potential to broaden access to financial services through lowering costs, reducing information asymmetries, enabling more transparency, increasing competitiveness, etc. This thesis analyzes the role of Fintech in promoting financial inclusion with the case of Mexico, approaching the lack of financial inclusion issue from the perspective of the household. To approach this issue, one of the objectives of this thesis is to investigate the barriers refraining households from accessing and using financial services.
In Mexico, more than half of the adult population do not have a bank account at a formal institution including mobile money account (Demirguc-Kunt et al, 2018). The G20’s financial inclusion indicators revealed that account ownership as well as saving and borrowing at financial institutions has decreased since 2014. The main barriers are the difficulties to use financial services, financial illiteracy and insufficient financial infrastructure leads to barriers to
financial inclusion in Mexico. Ideally, Fintech has a great potential to reduce the barriers to financial inclusion and promote access to and use of financial services for the people who are excluded by traditional financial institutions due to prohibitive prices, lack of documentation, etc. However, Fintech alone is not sufficient to transmit its full potential benefits. Even though Fintech ecosystem is growing rapidly in Mexico, and seen as a potential solution for lack of financial inclusion issue in Mexico, this study reveals that Fintech ecosystem couldn’t achieve its potential in Mexico so far.
Unpaid care policies in the time of right-wing populism: a comparative analysis of Poland and Turkey
(2021)
In recent years, increasing political repressions on women that result with social unrests and street protests in Poland and Turkey arouse interest around the ties between unpaid care workers and the current governments. Rising conservative, right-wing and populist discourses and their effects relating to care work made a further exploration in this field inevitable. Thus, this thesis examines the impacts of current policies on unpaid care workers in social and economic terms. The hypothesis of this study suggests that unpaid care workers in Poland and Turkey are exploited to a greater extent by familialist policies during the right-wing and populist governments. The discourses and policies of the governments are analyzed in the light of previous literature on care work. The paper also applies an assessment developed by Leitner (2003) in order to classify Poland and Turkey together with six European countries according to their ways of providing childcare and elderly care services. The study clearly shows that unpaid care workers have been socially downgraded and not remunerated mainly through familialist policies either explicitly or implicitly under the hegemony of right-wing populist parties in Poland and Turkey.
The Unhealthy Trade: The Expansion of the Food Industry in Latin America, case study of Mexico
(2019)
The text analyses the global and local inequalities that emerge because of the global food industry. More specifically, it analyzes how the consumption of food has changed affecting the health of the most vulnerable groups of people. In that sense, first, I analyze how the global food industry has expanded generating a health problem of obesity and Non-Communicable Diseases (NCDs), especially in the Global South. The result is that global inequalities are wider between Global North and South. This is reflected in higher rates of obesity and NCDs in peripherical countries, while Global North companies have more profits. Second, I analyze how this expansion is impacting local inequalities in Mexico. There, socioeconomic dynamics shape the way that ultra-processed food and drinks are consumed generating differentiated impacts by gender, class, and age. Women, poor people, and children are the most affected. In the end, the expansion of the global food industry has been contributing to reinforce previous inequalities at global and local levels
Transnational Climate Change Governance Challenges and Prospects: The Case of Private Governance
(2021)
There are multiple environmental and social risks associated with climate change, which increases the severity of climate change and necessitates immediate actions to be taken. Responding to the challenge of climate change has traditionally been seen as the primary responsibility of nation-states. However, there is a surge of transnational actors consisting of non-state, sub-state actors, and private-public partnerships that claim governance responsibilities in climate change in recent years. The purpose of this thesis to identify circumstances and motivations that induced transnational climate governance practices. This research mainly focuses on private climate governance activities that are managed and regulated by the private sector and non-governmental organizations in the absence of a public authority. This thesis also aims to illuminate potentials and limitations of private climate governance mechanisms to scale up global climate action. Critical evaluation of the literature revealed that as United Nations-sponsored international climate change governance, architecture evolved from a top-down regulatory framework towards a flexible, bottom-up approach, from the Kyoto Protocol to the Paris Agreement. This process rendered intergovernmental structures and states to delegate and orchestrate greater authority to non- state actors to take climate action. In addition to this, governance deficits and governance gaps associated with the United Nations-regulated international climate governance lead non- state actors to entrepreneurially engage in governance practices due to their dissatisfaction with the intergovernmental framework. Two case studies are conducted to analyze private governance mechanisms in the form of voluntary carbon markets and carbon disclosure, which exhibit this entrepreneurial action in the absence of formal public authority. Results revealed that private climate governance practices incentivize climate action in the short-run, yet they might not accrue actual environmental progress in the long-run. In that sense, it remains puzzling whether the private governance practices can expand the scale and reach of global responses to climate change.
The debate over a European Green Deal has contributed to emphasize the need to reduce environmental cost and the urgency of decarbonizing the road transport sector. Therefore, the thesis operationalizes the materialist state theory to distinguish between competing hegemony projects in the struggle over the EU’s mobility transition, in order to identify the driving forces in the European road transport sector. By empirically analyzing the power relations behind the Energy Taxation Directive and the CO2 emissions for passenger cars, the results indicate two dominant hegemony projects that are contesting the implementation of the green transition: 'the authoritarian neoliberal project' and 'the green capitalist project'. None of these projects will be enough to decarbonize the transport sector without shifting emissions and environmental costs elsewhere, nor will either project move away from a car-dependent system.
This master thesis examines global value chains and more specifically the creation and distribution of value in the case of baby-care product business. As the world economy and linkages between participants of international trade are changing and becoming more complicated, the research project addressing at bringing an applicable prototype and model of a global value chain and outlining the distribution of value-added in the chain from both organizational and geographical perspective. In addition, the study includes an analysis of the value chain structure of the case company Kindoh in terms of GVC governance and tries to find out the main strategy of Kindoh for making a profit.
After the breakdown of the Union of Soviet Socialist Republics, the Kyrgyz Republic started its transition period. During the Soviet Union Kyrgyzstan was one of the fifteen states having planned economic system which was later transited into the market driven mechanism. Consequently, Kyrgyzstan like a number of Commonwealth Independent States (CIS) suffered from primary drastic decline in economic development as well as from considerable transformation in the whole economic system. There was a severe increase in the unemployment situation, rising inequality and poverty and decrease in real wages. In spite of the fluctuations in the economic system, stagnation involving poverty and inequality lasted till 2000s. Therefore the national government had to undertake a number of reforms destined for economic recovery. Moreover, Kyrgyz government stated attracting international donors to help with the situation. The transition period was especially hard for kyrgyz women. There were not equal number of employment opportunities for women compared to men. Also, wage disparities resulted in income inequality for women. It is important to note that due to the more popularised beliefs of patriarchal values in the country, women were obliged to stay at home and do child care rather than pursue their career in social, economic or political spheres. The data is taken from national and international organisation’s sources.
This research analyses whether the amended European Union (EU) Securitisation Regulation that aims to revitalise the securitisation markets is effectively reducing concerns of financial stability. Securitisation activities are a substantial part of the universe of non-bank financial intermediation, elsewhere referred to as the ‘shadow’ banking universe. Securitisations were a channel of contagion during the global financial crisis (GFC). When highly rated assets that had been packaged in mortgage-backed securities began to default, investors tried to quickly dispose of these instruments. The distrust did not discriminate, instead spreading to other securitisation instruments. The consequence was that the market for securitisation froze. This was problematic, as asset-backed securities (ABSs) are used as collateral in interbank lending. Since the GFC, securitisation markets have only recovered slowly. ABS products should stimulate access to market-based finance for the non-financial sector, primarily for small- and medium-seized enterprises, as an alternative to bank-centred finance. This assessment of whether problems of financial stability of securitisations can be ruled out takes a twofold approach. First, it is found that the regulation takes a market
rational approach and attempts to rule out false incentives and moral hazard problems with’skin-in-the-game’ rules, due diligence requirements and stringent supervision. Nevertheless, the second approach of the assessment looks beyond market failure and finds that there are problems which cannot be ruled out. Securitisation comes with bank-like risks, such as maturity and liquidity transformation, potentially divergent expectations between debtors and lenders, asset price bubbles and excessive leverage, which continue to be a potential
source of systemic risk.
Bangladesh has been experiencing tremendous GDP growth for a long time and is now one of the fastest-developing economies in the world. Recent CDP report on eligibility and suitability for graduation to a middle-income country from a least developed country indicates that she is on the right track to achieving development status. In her development, all her development partners have contributed on a large scale in different aspects. Currently, China is the largest trade and reliable strategic partner for Bangladesh. It has a substantial attribution on the growth and development perspectives, but the trade deficit, concentration of FDI, and bitter experiences on debt in many countries have created suspicions. Simultaneously, the Chinese greater appearance in Bangladesh has raised the contention among other regional and global partners. They have active participation in several development endeavors to restrain Bangladesh from absolute Chinese influence. As an alternative development partner, China has enhanced better bargaining power for Bangladesh and introduced a greater dilemma to uphold her neutral foreign policy. Nevertheless, Bangladesh still has succeeded in diversifying her development partners on whom she depends on foreign direct investment, debt, trade, technology, and financial support. In general, her development approach is dependent on all rather than exclusive to one, and she needs to be rigid and transparent about her development objectives and policies.
This Master’s thesis examines the impact of heterogeneity on the assessment of systemic risk in the context of the German banking sector. Precisely, it is questioned whether currently employed, official systemic risk indicators are able to account for the German banking sector’s heterogeneity and to signal systemic risk reliably regardless of different bank types’ individual characteristics. For the assessment, a two-step procedure is employed. First, currently employed, official risk indicators are applied to bank-type-specific data for six different bank types from 1990 until 2018 and benchmarked against crises that occurred during the assessment period. Second, the implications of sectoral characteristics on systemic risk are assessed. The findings suggest that indicators are indeed able to account for the German banking sector’s heterogeneity, issuing different signals for various bank types. Moreover, the indicators allow for the identification of individual bank types’ behavior and their role in the accumulation of systemic risk. Yet, they are only partially able to signal crises correctly and behave more like thermometers than barometers of risk. Lastly, structural features of the German banking sector amplify the risk of individual institutions and thus their contribution to systemic risk at large.
This thesis investigates the impacts of large-scale asset purchases (LSAPs), which are an unconventional monetary policy (UMP) used by the Fed in the response to the 2008 global financial crisis and recession, on gender and racial wealth inequality in the US. After demonstrating that monetary policies have gendered and racial impacts and that none of these studies have yet considered UMPs, the thesis will then explain theoretically what the transmission channels of LSAPs to the wealth distribution are. Empirical studies show that LSAPs created a wealth effect, through increasing the price of some asset owned by households, primarily stocks prices, and to a lesser
extent house prices. Current literature on the impact of LSAPs in the US is still in dissension over whether it increased net wealth inequality or not. However, there is ample evidence from the current gender and racial economic literature that the wealth distribution in the US is significantly unequal, and a hole in the literature on the impact of LSAPs on the highly gendered and racial US wealth distribution. The thesis then begins to fill in some of these gaps in the literature by investigating what has happened to the financial and non-financial wealth of households disaggregated by gender and race in the period of the LSAPs, and whether the LSAPs did contribute to or reinforce these wealth inequalities. Due to limitations in the data collection the thesis is not able to conclude that there was a net negative gender wealth inequality effect. Nevertheless, there is strong empirical evidence that the LSAPs did increase racial wealth
inequality, due to white households disproportionately owning stocks and having higher rates on homeownership.
Fiscal policy is back in the academic and policy discussion as a tool to stabilize business cycle fluctuations and to stimulate output, which in turn has resulted into a new generation of fiscal multiplier estimates. Recent research shows that the macroeconomic effects of
fiscal policy are country-specific and potentially dependent on the state of the business cycle. Building upon the empirical literature on time-varying fiscal policy, I estimate the magnitude of public investment effects on output for 7 Eurozone countries, using a Bayesian time-varying parameters vector autoregression (TVP-VAR). The results show that public investment shocks have a positive effect on output growth in all countries; while the effect remained constant over time in Finland, France, Germany and the Netherlands, it exhibits time-variation in Italy, Spain and Portugal. The empirical evidence also suggests that public investment effects might not necessarily depend on the state of the business cycle, as they could also remain stable over time or vary due to other macroeconomic factors.
Necessity or Habit? A post-Keynesian Analysis of Rising Household Debt: The Case of Housing Market
(2021)
The road to the euro: Bulgaria’s economic development since 1989 under currency board conditions
(2018)
The goal of this paper is to provide a comprehensive analysis of the key economic developments in Bulgaria over the last three decades, capturing the multidimensionality of the transition process and defining the current economic trajectory of the country under currency board conditions.
With the implosion of the socialist regime and the loss of its main external market the Bulgarian economy failed to regain lost ground and slipped into deep economic crisis. The aggravating macroeconomic imbalances culminated in a severe ‘triple’ crisis combining a crash in public finances, ruined banking system and foreign exchange crisis, as a result of a collapse of the currency, all of which gave rise to a hyperinflationary hike in early 1997.
Introduced as a stabilization instrument and disinflation device, following the severe economic crisis, the implications of the Bulgarian currency board for the economy have been mixed. On the one hand, living up to the expectations a remarkable turnaround in terms of inflation has been achieved and macroeconomic and financial stability has been restored. However, the disinflation came at the cost of enlarging external debt and appreciation of the real exchange rate, which is a primary prerequisite for potential loss of competitiveness of the economy.
Digitalization as an attribute of many western countries developed in the 19th century. As a driver of technological change, digitalization has encouraged the developments and production of derived technologies such as internets, computer, smart phone etc. Software applications such as zoom, blue-button etc. are proves that distance is no longer a barrier for communication. Overall, digitalization and technological change are a fundamental foundation for today’s economic growth. There has been rapid increase in new businesses due to creativity and innovation. While this is evident, the present increase in low wage, non-standard work, working poverty and skill shortages are a concern on how digitalization impact employment pattern and social life. The objective of this paper is to provide evidence on the rise of precarious employment and to express the extent at which digitalization impact skill shortages in the German labour market. Structural labour market problems such as skill shortages (continuous demand for high skill individuals) and rise in precarious employment are a major concern that needs to be tackled in the German labour market.
This paper investigates whether macroeconomic policy regimes contributed to the emergence and shifts in macroeconomic demand and growth regimes in the core Euro Area before and after the Eurozone crisis. Against the background of Post-Keynesian/ Kaleckian theory, it is argued that financialisation has led to higher income inequality, lower investment in capital stock, an increase in the potential for debt- and wealth-based consumption as well as high current account imbalances. These four characteristics entailed the emergence of unstable and extreme macroeconomic demand and growth regimes, in particular the export-led mercantilist and the debt-led private demand boom type, in financialised economies. In a qualitative analysis based on quantitative data, it is assessed by which regime type eleven core Eurozone economies were characterized in the periods 2001-2009 and 2010-2019. In a second step, the main transmission channels of economic policies, namely of fiscal, monetary and wage policies, as well as open economy conditions on aggregate demand are examined, and placed in the European policy context. Building upon findings of the first empirical part, the macroeconomic policy mix of four prototype and major Eurozone economies is analysed for the period before and after the crisis. It is found that macroeconomic policy regimes contributed to the emergence and shifts in macroeconomic demand and growth regimes in core Eurozone economies during the considered period.
Towards a Fiscal Capacity in the Euro Area. A Critical Assessment of the Recent Policy Proposals.
(2018)
Is an Interest Rate Cap Warranted in Kenya? An Assessment Through a Vector Error Correction Analysis
(2018)
This paper investigates whether policy rates have an impact on bank lending rates and whether bank lending rates have an impact on credit to the private sector in Kenya. The analysis is based on a vector error correction model (VECM) on a data sample for Kenya over 1996-2016. This investigation was motivated by the recent interest rate capping law that necessitated the reexamination of this channel of monetary transmission. The empirical evidence shows a significant and robust long-run relationship between the policy rate and the bank lending rate. The short-run relationship is significant though less
robust. Similarly there is a significant and robust long-run relationship between credit and the lending rate; the short run relationship is also significant but less robust. These results
indicate that monetary transmission from policy rates to credit is effective in the long run but less so in the short run. Therefore, the interest rate capping law may somehow be justified as a means of containing the cost of credit to stimulate access to credit.
Historically high and rising level of external debt raises concerns among policymakers and academics around the globe. This master thesis proposes to examine several questions. Firstly, the paper attempts to provide the analysis of the current status quo of external debt in developing and emerging countries. Secondly, it attempts to determine the risks attached to low-quality debt structure. Lastly, the paper attempts answer whether expanding debt market through regional integration of local currency bond markets can increase financial stability and reduce “original sin”.
This thesis aims at analysing the potential benefits and obstacles of an Employer-of-Last-resort(ELR) policy in the case of Germany. Three main conclusions can be drawn from the analysis. First, as a bottom-up approach an ELR policy can tackle the issue of unemployment on the macroeconomic, socioeconomic and individual level in a unique way and promotes social inclusion of the unemployed. An ELR addresses non-pecuniary costs of unemployment and has the potential to tackle further socioeconomic problems. Second, this work points out that an ELR’s impact on inflation depends on excess production capacities of economic sectors as well as wage bargaining structures. In this regard, trade unions, government and employer representatives must
cooperate comprehensively in order to adapt to a potential raise of workers’ class consciousness. Third, the institutional setup of the European union does not allow for the application of functional
finance and the necessary fiscal spending for financing an ELR. Hence, Germany would need to abolish or redefine the debt break strategy, e.g. in accordance to the so-called Golden Rule, in order to implement a comprehensive ELR policy.
This Master’s thesis aims to explain the causes of rapidly increasing prices in Venezuela and establish whether the current episode can be considered to be of hyperinflationary nature from the post-Keynesian theoretical approach. The chosen approach highlights the role of distributive conflict, indexation mechanism, balance of payments constraint, devaluation expectations and gradual rejection of national currency in favour of foreign currency. We argue that the root cause of the precarious economic situation in Venezuela lies in the long term failure to implement structural changes ensuring industrial diversification and lessening the dependency on oil exports. The symptoms of the Dutch disease are observed in the prolonged currency overvaluation during the high oil revenue periods. In the face of growing external constraint the authorities introduce severe foreign currency rationing (and/or devalue the exchange rate) which ignites inflation due to external bottlenecks since many sectors face supply constraints as they depend on imports of inputs of production. This leads to a regressive distribution of income, which contributes to the growing distributive conflict and fuels inflation further, as workers oppose to the lowering of real wages. Moreover, the currency rationing puts pressure on the black market for exchange as the devaluation expectations increase, leading to a parallel market devaluation-inflation spiral, which threatens to turn into hyperinflation. Nevertheless, we argue that hyperinflation, according to the proposed post-Keynesian framework (the flight to foreign currency), does not materialise despite skyrocketing prices because of the particular institutional setting – the exchange controls, which have been in place since 2003, prevent full currency substitution.
This thesis looks at the potential role of the IG Metall, the biggest German trade union, in the Green Transition of the German automobile sector. The IG Metall’s power and influence in the political, social and economic sphere will be analysed based on the Power Resource Approach by Dörre and Schmalz (2014). The analysis will show that there are two tendencies within the union: a conservative and a progressive approach, differentiated by their goals. Consequently, both wings have different ways to approach the transition and are each relying and focusing on certain power resources. The result is a tightrope walk of the IG Metall, balancing both tendencies within one union in an environment that is as torn as the union itself.