Data is Different: Why the World Needs a New Approach to Governing Cross-border Data Flows

November 2018

Susan Ariel Aaronson

IIEP Working Paper 2018-10

Executive Summary: Companies, governments and individuals are using data to create new services such as apps, artificial intelligence (AI) and the Internet of Things (IoT). These data-driven services rely on large pools of data and a relatively unhindered flow of data across borders (few market access or governance barriers). The current approach to governing cross-border data flows through trade agreements has not led to binding, universal or interoperable rules governing the use of data. Trade diplomats first established principles to govern cross-border data flows, and then drafted e-commerce language in free trade agreements (FTAs), rather than through the World Trade Organization (WTO), the most international trade agreement. Data-driven services will require a different domestic and international regulatory environment than that developed to facilitate e-commerce. Most countries with significant datadriven firms are in the process of debating how to regulate these services and the data that underpins them. But many developing countries are not able to participate in that debate. Policy makers must devise a more effective approach to regulating trade in data for four reasons: the unique nature of data as an item exchanged across borders; the sheer volume of data exchanged; the fact that much of the data exchanged across borders is personal data; and the fact that although data could be a significant source of growth, many developing countries are unprepared to participate in this new data-driven economy and to build new data-driven services. This paper begins with an overview and then describes how trade in data is different from trade in goods or services. It then examines analogies used to describe data as an input, which can help us understand how data could be regulated. Next, the paper discusses how trade policy makers are regulating trade in data and how these efforts have created a patchwork. Finally, it suggests an alternative approach.

Development and Microfinance: Learning from Steve Hollingworth

Steve Hollingworth

President and CEO of the Grameen Foundation

Co-Sponsored with Sigma Iota Rho, Official Honor Society of the Elliott School

Thursday, November 29, 2018

7:30pm to 9:00pm – Reception to Follow

 

Elliott School of International Affairs
Room B12
1957 E Street NW
Washington, DC 20052

Steve HollingworthSteve Hollingworth’s unflagging commitment through 30 years of work in international development has been to ensure that the delivery of financial services benefits the world’s poorest people and fulfills its promise of alleviating poverty.

Prior to joining Grameen Foundation, Steve was President of Freedom from Hunger. Beginning in 2011, he focused that organization on the intersection of financial services and ending hunger through the empowerment of women in rural communities. Previously, he served as Chief Operating Officer for CARE, where he was instrumental in developing and implementing the organization-wide strategy and was responsible for direct-line management of global operations and programs with a total of 13,000 employees and a budget of $650 million. He has also held senior field positions in Asia (India, Sri Lanka and Bangladesh), Africa (Lesotho) and Latin America (Bolivia), building collaboration between practitioners, technical assistance providers, donors and government agencies.

Steve’s roots in financial services for the very poor go back to early days with CARE-Bangladesh, the largest CARE mission in the world. Based on his leadership in the financial services sector, he also served for many years as a member of the Microfinance CEO Working Group. His areas of expertise include microenterprise and microfinance, education, agriculture, health and civil society strengthening.

Steve has an M.S. in Economics, Development Studies, from Victoria University of Manchester, in Manchester, England. He enrolled there as a Rotarian Fellow, and his thesis analyzed the field of microcredit and the role of Grameen Bank. In that sense, Steve’s position as President and CEO of Grameen Foundation brings him full circle. Steve has a B.A. in Economics from Augustana College in Rock Island, Illinois, not far from his home town of Elgin, Illinois.

Is There a Kuznets Curve for Intra-City Earnings Inequality?

November 2018

Haixiao Wu

IIEP Working Paper 2018-9

Abstract: Many papers have found a positive relation between income inequality and city size in the US and other countries. This literature has assumed that the relation is linear. Tests performed here find that it is concave, resembling the classic Kuznets curve. A theoretical model based on the Income Elasticity Hypothesis (IEH), explains that inequality is a concave function of housing prices that tend to increase with city size. Further tests confirm the concavity of the relation between Gini and housing costs that is predicted by the IEH. Although for most cities, inequality still rises with housing costs, if housing costs continue to grow in large cities, inequality should eventually fall, resembling the Kuznets Curve at the country level

The International Monetary Fund’s World Economic Outlook

We are delighted to invite you to the International Monetary Fund’s 2018 World Economic Outlook at the George Washington University. The talk will consist of three sections, starting with an overview of global prospects and policies and then moving onto a discussion of the global recovery 10 years after the global financial crisis and challenges for monetary policy in emerging economies.

 

Tuesday, November 6, 2018
9:30 a.m. – 12:30 p.m.
The Commons, 6th Floor
Elliott School of International Affairs
1957 E Street, NW
Washington, DC 20052

Schedule of Events

9:30 –  9:45 a.m. Opening Remarks

  • Maggie Chen, George Washington University

9:45 – 10:15 a.m. Chapter 1: Global Prospects and Policies

  • Presenter: Gian Maria Milesi-Ferretti, International Monetary Fund

10:15 – 10:30 a.m. Coffee Break

10:30 – 11:15 a.m. Chapter 2:  The Global Recovery 10 Years after the 2008 Financial Meltdown

  • Presenter: Wenjie Chen, International Monetary Fund
  • Discussant: David Dollar, Brookings Institute

11:15 – 11:30 a.m. Coffee Break

11:30 – 12:15 p.m. Chapter 3:  Challenges for Monetary Policy in Emerging Economies as Global Financial Conditions Normalize

  • Presenter: Rudolfs Bems, International Monetary Fund
  • Discussant: Jay Shambaugh, George Washington University

12:15 p.m. Concluding remarks

Chapter 1: Global Prospects and Policies

Global growth for 2018–19 is projected to remain steady at its 2017 level, but its pace is less vigorous than projected in April and it has become less balanced. Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded. Global growth is projected at 3.7 percent for 2018–19—0.2 percentage point lower for both years than forecast in April. The downward revision reflects surprises that suppressed activity in early 2018 in some major advanced economies, the negative effects of the trade measures implemented or approved between April and mid-September, as well as a weaker outlook for some key emerging market and developing economies arising from country-specific factors, tighter financial conditions, geopolitical tensions, and higher oil import bills.

Chapter 2:  The Global Recovery 10 Years after the 2008 Financial Meltdown

This chapter takes stock of the global economic recovery a decade after the 2008 financial crisis. Output losses after the crisis appear to be persistent, irrespective of whether a country suffered a banking crisis in 2007–08. Sluggish investment was a key channel through which these losses registered, accompanied by long-lasting capital and total factor productivity shortfalls relative to precrisis trends. Policy choices preceding the crisis and in its immediate aftermath influenced postcrisis variation in output. Underscoring the importance of macroprudential policies and effective supervision, countries with greater financial vulnerabilities in the precrisis years suffered larger output losses after the crisis. Countries with stronger precrisis fiscal positions and those with more flexible exchange rate regimes experienced smaller losses. Unprecedented and exceptional policy actions taken after the crisis helped mitigate countries’ postcrisis output losses.

Chapter 3:  Challenges for Monetary Policy in Emerging Economies as Global Financial Conditions Normalize

Inflation in emerging market and developing economies since the mid-2000s has, on average, been low and stable. This chapter investigates whether these recent gains in inflation performance are sustainable as global financial conditions normalize. The findings are as follows: first, despite the overall stability, sizable heterogeneity in inflation performance and in variability of longer-term inflation expectations remains among emerging markets. Second, changes in longer-term inflation expectations are the main determinant of inflation, while external conditions play a more limited role, suggesting that domestic, not global, factors are the main contributor to the recent gains in inflation performance. Third, further improvements in the extent of anchoring of inflation expectations can significantly improve economic resilience to adverse external shocks in emerging markets. Anchoring reduces inflation persistence and limits the pass-through of currency depreciations to domestic prices, allowing monetary policy to focus more on smoothing fluctuations in output.