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SLI Call for Applications Updated

April 1, 2024

The Call for Applications for Sylff Leadership Initiatives (SLI) has been updated with tips on how eligible fellows can improve their chances of winning an award.

SLI aims to support current and graduated fellows who are committed to taking the small steps that can make a big difference for the benefit of society. A maximum of US$10,000 is provided for two categories of activities with high social value: (1) a social action project or (2) a forum, conference, seminar, or workshop. Fellows may apply for SLI any time of the year.

To apply, each applicant must submit a concept paper summarizing the proposed project and the social issue it seeks to address in a concise and convincing manner. Because the concept paper is a crucial component of the selection process, we have added some tips on what the concept paper should contain in the “4. Selection Criteria” section of the Call for Applications.

We hope the additional information will be helpful when applicants are preparing their project proposals. If you are planning an initiative that can benefit society, be sure to check the updated Call for Applications at: https://www.sylff.org/support_programs/sli/.

We look forward to receiving your application.

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The Role of Cooperatives in Promoting Interethnic Dialogue and Peaceful Coexistence

March 12, 2024
By 28817

Given their emphasis on collective work, democratic decision-making, and dialogue in promoting members’ economic and social well-being, cooperatives encourage an openness to others, which can also enable different ethnic groups to work together toward common goals and achieve peaceful coexistence. Rui Lora (University of Coimbra, 2020-21) writes that in Bosnia and Herzegovina, cooperatives were a major factor in overcoming discrimination and fostering reconciliation.

*     *     *

The economic, social, and political benefits of the cooperative movement—launched with the founding of the Rochdale Society of Equitable Pioneers in 1844—have long been recognized. In recent years, such benefits have also been observed in such fields as international relations, diplomacy, and even peace studies (Macpherson and Paz 2015; Emmanuel and Macpherson 2007; Cooperatives Europe 2019). One way of identifying the nature of these contributions is to analyze the movement through the lens of what is called diatopic hermeneutics. This allows cooperativism to be perceived as an actor in international relations from the perspective of “cosmopolitanism”—which views all people as being entitled to equal respect and consideration, regardless or citizenship or other affiliations.

The concept of diatopic hermeneutics was first presented by Panikkar (1982) and later expounded by Santos (1997). It is based on the principle that one culture cannot understand another from just its own viewpoint. Rather, it is “necessary to understand the other without assuming that it has our same self-knowledge or knowledge base” (Santos 1997). Diatopic hermeneutics thus seeks to “bring into contact radically different human horizons” in order to achieve true dialogue and the interaction of cultures (Santos 1997). It can be understood as the reciprocal translation of values, knowledge, and beliefs and is needed because the commonplace rhetoric of a given culture or tradition is often incomplete, incompatible, or potentially challenging from the perspective of another tradition. There must be dialogue between diverse cultural perspectives to enable the reciprocal translation of values, knowledge, and beliefs.

An examination of traditional principles of cooperativism reveals that they have much in common with diatopic hermeneutics. In fact, the cooperative might even be regarded as a practical instrument of the concept. The principles of cooperativism, for example, emphasize the importance of collective work, democratic decision-making, and dialogue in promoting the economic and social well-being of members. Such principles are aligned with the approach of diatopic hermeneutics in implying an openness to understanding the other and valuing cultural diversity.

Expanding Scope of Cooperatives

Historically, cooperativism has been a movement that, from the beginning, sought to build alternative economic models to capitalism through its emphasis on collective ownership and democratic management, while at the same time avoiding a state-centered economic model (Namorado 1999). Since its emergence after the Industrial Revolution, cooperatives have addressed a plurality of community needs, including in times of crisis (Vieta and Lionais 2015). In addition to making economic contributions, cooperativism is usually and directly related to many aspects of the social and solidarity economy (Singer 2018).

However, over the years, and particularly more recently, the scope and performance of cooperatives have expanded to other spheres. This has prompted the need to discuss the role of cooperatives from a cosmopolitanist perspective, as the globalization of the world economy and commercial liberalism have, according to some theoretical perspectives, deepened exclusion and wealth concentration, thereby threatening democracy and peace (Rodrigues 2008). In this context, cooperatives began to assume an increasingly prominent economic and political role with the emergence of an independent civil society around the world (Laville 2009).

The globalization process has greatly modified the way people interact in society in recent years. It has made possible the compression of time and space, reducing distances and speeding up information, and the promotion of the universalization of laws. But it has also highlighted differences in sociocultural identities in response to social homogenization, causing conflict between different human groups (Ioris 2007). This makes discussions of the tools and procedures that allow different segments of society—those with different worldviews—to communicate and meet the challenges of social and political coexistence quite important. Expanding the concept of diatopic hermeneutics with the aim of contributing to this discussion, especially with respect to diversity, may help bring together human groups that are isolated or in conflict due to globalization.

The author, top left, speaking with members of a multiethnic cooperative in Bosnia and Herzegovina as part of his SRG project.

Seeing cooperatives as an international actor reveals significant local and even global contributions that can be made by the cooperative movement in allowing actions and initiatives to transcend various disparities. Santos suggests that globalization can be understood through the lenses of “globalized localisms” and “localized globalisms,” referring to global perceptions of local customs and the impact of transnational practices on local conventions, respectively (Santos 1997, 14). These dynamics, characterized by asymmetries between central and peripheral countries, underscore the potential of cooperatives to contribute to regional integration by addressing such disparities.

An Actor in International Relations

In this context, cosmopolitanism emerges as a concept that enables actors, including regions, classes, and subordinate social groups, to interact transnationally in pursuit of common interests (Santos 1997). Cooperatives, rooted in cooperation among themselves and in contributing to the community, are connected to a global network through the International Cooperative Alliance (ICA), for example. They play a crucial role in inclusive socioeconomic development and can also serve as a tool for subaltern and insurgent cosmopolitanism, addressing the aspirations of oppressed groups and fostering global solidarity.

Cooperatives can thus be understood as an actor in international relations from a cosmopolitanist perspective, advocating for common interests shared by marginalized, excluded, and subordinated groups globally. When viewed as part of cosmopolitanism, moreover, the principles and values of cooperativism acquire a practical dimension, enabling dialogue and the exchange of experiences among cooperatives and members. The organizational structure of cooperatives, both locally and regionally, as well as their international representation through bodies like the ICA, empowers marginalized groups in global governance mechanisms and contributes to addressing asymmetries in integration processes.

To avoid overly idealistic conclusions, though, it is essential to identify specific situations and contexts where this relationship between cooperatives and cosmopolitanism can be verified, even tangentially. This approach can ensure a more nuanced understanding of cooperatives’ role in fostering regional integration, such as in the Western Balkans. According to the report by Cooperatives Europe (2019), two projects in Bosnia and Herzegovina have demonstrated the capacity of cooperatives to promote interethnic dialogue and economic development of the region: the “Fruits of Peace” project of the Insieme Cooperative in the Bratunac region and the creation in Doboj of multiethnic cooperatives as a consortium of rural producers.

At a meeting with a cooperative in Bosnia and Herzegovina.

The main success of both projects was the establishment of a flexible and progressive process for forming cooperatives, allowing exchange between different ethnic groups to develop within the cooperatives. The increased dialogue helped to overcome discrimination and promote peacebuilding, providing opportunities to correct misunderstandings and find a path toward peaceful coexistence. By promoting collective work, both projects also enabled the revitalization of sustainable rural economies and contributed to reconciliation by overcoming long-established divisions. Major factors behind their success were that the cooperative ensured continuous training and promoted constant dialogue for both its employees and producers.

An Analytical Lens for Understanding Global Dynamics in Local Contexts

Analyzing these cases from a cosmopolitanist perspective, one can argue that cooperatives have the potential to promote interethnic dialogue and build coexistence in diverse environments. By embodying such principles as cooperation, solidarity, and democracy, cooperatives provide a space for members of different ethnic groups to come together, work toward common goals, and build understanding to achieve reconciliation. The principles of cooperativism thus also incorporate the idea of diatopic hermeneutics, especially in seeking to understand cultural and legal diversity in different geographical contexts, as highlighted in examples like those observed in Bosnia and Herzegovina.

If, on the other hand, cooperatives are conceived within the framework of globalized localisms and localized globalisms, they can become subject to a complex and unequal power dynamic, which can manifest as oppression, exploitation, and marginalization. This may occur when global influences benefit dominant centers at the expense of those on the periphery. Diatopic hermeneutics can help us understand how these global processes are reinterpreted and experienced locally, and how communities like cooperatives resist and respond to these power dynamics.

In this context, the role of diatopic hermeneutics would be to offer an analytical lens for understanding how global dynamics are interpreted and experienced in specific local contexts, especially by the cooperatives in this case. In other words, diatopic hermeneutics allows an analysis sensitive to cultural, historical, and social differences in different places, recognizing that experiences and interpretations of globalism and localism vary according to geographical and cultural context. It helps us to understand how global influences are reinterpreted and adapted locally, and how these adaptations reflect and shape power relations, resistance, and identity.

Using diatopic hermeneutics to understand cooperativism in a cosmopolitanist scenario thus enables us to capture the nuances of the relationships between globalism, localism, and subalternity, providing a more holistic and contextualized approach to analyzing issues of justice, power, and social transformation in a globalized world and supporting the argument that cooperatives can contribute to interethnic dialogue.

 

References

Charles, Lorraine, and Kate Denman. 2013. “Syrian and Palestinian Syrian Refugees in Lebanon: The Plight of Women and Children.” Journal of International Womens Studies 14.5: 96-111.

Cooperatives Europe. 2019. Cooperatives and Peace: Strengthening Democracy, Participation and Trust. A Case Study Approach. Cooperatives Europe and Cooperatives Europe Development Platform.

Emmanuel, J., and MacPherson, I., eds. 2007. Co-operatives and the Pursuit of Peace. British Columbia: New Rochdale Press.

Gijselinckx, Caroline, and Matthias Bussels. 2014. “Farmers’ Cooperatives in Europe: Social and Historical Determinants of Cooperative Membership in Agriculture.” Annals of Public and Cooperative Economics 85.4: 509-530.

Ioris, Rafael Rossotto. 2007. Culturas em choque: a globalização e os desafios para a convivência multicultural. Annablume.

Larkin, Craig. 2012. Memory and Conflict in Lebanon: Remembering and Forgetting the Past. Routledge.

Laville J. L. 2009. A economia solidária: um movimento internacional. Revista Critica de Ciencias Sociais 84.

MacPherson, Ian, and Yehudah Paz. 2015. “Concern for Community: The Relevance of Co-operatives to Peace.” Joy Emmanuel, ed. Victoria: Turning Times Research and Consulting.

Madulu, Ndalahwa F. 2003. “Linking poverty levels to water resource use and conflicts in rural Tanzania.” Physics and Chemistry of the Earth, Parts A/B/C 28.20-27: 911-917.

Menashri, David. 2001. Post-Revolutionary Politics in Iran: Religion, Society, and Power. Routledge.

Namorado, Rui. 1999. Estrutura e Organização das Cooperativas. Oficina do Centro de Estudos Sociais de Coimbra 138.

McNally, D., 1993. Against the Market: Political Economy, Market Socialism and the Marxist Critique. London: Verso.

Panikkar, Raimundo. 1982. “Is the Notion of Human Rights a Western Concept?” Diogenes 30.120: 75-102.

Rodrigues, Roberto. 2008. “Cooperativismo: Democracia e Paz – surfando a segunda onda.” OCB.

Santos, Boaventura de Souza. 1997. “Uma concepção multicultural de direitos humanos.” Lua Nova 39: 105-124.

———. 2004. “Para uma sociologia das ausências e uma sociologia das emergências.” In Santos, B. de S, comp., Conhecimento Prudente para uma Vida Decente: ‘Um Discurso sobre as Ciências’ revisitado. São Paulo: Cortez, p. 777‐821.

Singer, Paul. 2018. Ensaios sobre economia solidária. Leya.

Vergalito, Esteban. 2009. “Acotaciones filosóficas a la ‘hermenéutica diatópica’ de Boaventura de Sousa Santos.” Impulso 19.48: 19-29.

Vieta, Marcelo, and Doug Lionais. 2015. “The Cooperative Advantage for Community Development.” Journal of Entrepreneurial and Organizational Diversity 4.1: 1- 10.

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How Hungary Came to “Accept” the Global Minimum Tax

March 5, 2024
By 31304

Hungary found itself isolated in the EU when it initially blocked the implementation of the OECD agreement on a minimum corporate tax rate for multinationals. In an article adapted from a paper that was submitted to Pázmány Péter Catholic University Budapest, Tamás Zoltán Wágner (Hungarian Academy of Sciences, 2022) writes that rather than stonewalling the agreement, the government wisely shifted its strategy, enabling it to embrace the deal while maintaining its tax sovereignty and competitiveness.

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Following the October 2021 agreement on a global minimum tax within the OECD framework on base erosion and profit shifting (BEPS), the focus in the European Union shifted to the question of how this should be implemented in national and EU legal systems. This became an issue because member states with low corporate tax rates, such as Ireland and Hungary, feared losing their competitiveness and were critical of the implementation efforts, triggering heated debate.

Hungary initially strongly opposed the implementation of the tax in the EU and anticipated vetoing it if necessary. Later, though, the Hungarian government adjusted its position and focused its efforts on how it could avoid implementing an actual tax increase. In the following, after briefly presenting the rules on the global minimum tax, I will examine whether Hungary’s fear was justified and then analyze the reasons for the change in the Hungarian position, which evolved from initial rejection to a search for a compromise.

Discouraging Tax Planning

Regarding the OECD agreement, it is important to point out that it is a two-pillar solution. The first pillar addresses the largest and most profitable multinational enterprises (MNEs) with a global turnover of more than €20 billion (€10 billion from 2028) and a pretax profitability ratio exceeding 10%. In countries where they sell their products and services and where they have consumers, these companies will need to pay 25% of their profits. By implementing this tax, countries that introduced or planned to introduce a digital tax will abandon it and commit to not introducing it in the future.

The second pillar is the global minimum tax, which aims to ensure that multinationals pay a minimum of 15% on all their profits in each jurisdiction where they have subsidiaries or establishments. According to pillar two rules, it is necessary to examine on a country-by-country basis whether the taxation of a given multinational reaches the effective tax rate. The global minimum tax applies to MNEs with an annual consolidated group revenue of €750 million operating in at least two of the four years preceding the current year and in two jurisdictions. States have the option of including for minimum taxation groups of companies operating in their own territories even if they do not have foreign subsidiaries or establishments. Not subject to the minimum tax, though, are government departments, international organizations, nonprofit organizations, pension or investment funds that are the ultimate parent companies of a group of companies, and the assets held by such entities.

The rate of the global minimum tax is not a nominal but an effective tax rate: only the taxes actually paid matter. Thus, if the effective tax rate of one of the subsidiaries in a given jurisdiction is less than 15%, then an additional tax is levied, to be paid by the parent company or the subsidiary. According to the three-element scheme developed by the OECD, the income inclusion rule (IIR) provides for the imposition of a top-up tax to make up for any difference in the taxes paid, or, if there is no IIR in the relevant jurisdiction, the undertaxed payments rule (UTPR) operates as a backstop to ensure that the tax rate for an MNE group is achieved by prohibiting cost deductions for group members or through similar mechanisms. The third element of the regulation is the subject to tax rule (STTR), a treaty-based rule that allows certain states to tax intra-group payments when the tax rate for such payments is below the minimum rate. This had been prohibited under the double taxation convention.

In the light of the above, it is clear that, contrary to the OECD BEPS Action Plan, adopted in 2013, the global minimum tax does not place emphasis on protecting the tax base but on eliminating the cause of tax planning: its basic philosophy assumes that MNEs will not use tax avoidance techniques if the tax advantage is taken away. It also aims to prevent a “race to the bottom” based on continuous decline in corporate tax rates and to reduce divergences between national tax systems, which also facilitate tax avoidance techniques.

An image generated by Craiyon (https://www.craiyon.com/).

Backlash from Hungarian Officials

Low-tax countries like Ireland and Hungary initially sharply criticized the concept because they feared losing their competitiveness and becoming less attractive to foreign investors. They also complained that the introduction of a global minimum tax would limit their tax policy, since it would essentially force them to raise their corporate tax rates: even if they apply lower tax rates, other states will collect the difference anyway. This fear seemed justified because, as Hindriks and Nishimura showed, the introduction of a global minimum tax would reduce the gap between high-tax and low-tax countries, which would also affect the ability to attract capital: large companies would be less likely to move their profits to low-tax countries.

Overall, countries with low tax rates can expect a decrease in tax revenues, while countries with high tax rates can expect an increase in tax revenues. In the longer term, the loss of a tax advantage could also jeopardize the very existence of tax havens and other preferential tax regimes. For this reason, these countries need to pursue one of the following strategies:

  • Maintain the status quo (for states that do not levy a corporate tax)
  • Raise the corporate tax rate to the level of the global minimum tax
  • Introduce a corporate tax system that applies to all companies
  • Introduce a threshold-based corporate tax system, which means that only companies subject to a global minimum tax must pay the higher corporate tax rate

Another strategy is for the state, in order to avoid an effective tax increase, to include as many types of tax as possible in the effective tax burden. This, in my view, is the best way forward, and it was, in fact, the choice made by Hungary.

Hungary, like other low-tax countries, was initially very skeptical about the global minimum tax. The proposed legislation triggered the following preliminary remarks from governmental officials:

  • “We should avoid a war of competition among tax systems in the global fight against harmful tax competition.”
  • “It is essential to respect the fiscal sovereignty of states regarding the taxation of income generated locally, and profits attributable to real economic activity shall be exempted to the greatest possible extent.”
  • “The situation should be avoided where the regulation penalizes differences between different methods of calculating the tax base instead of low taxation, which could substantially restrict the free movement of capital even between states applying tax rates close to the average.”
  • “A set of rules applicable only to subsidiaries would create a significant competitive disadvantage for capital-importing countries and, in many cases, lead to the relocation of headquarters to low-tax states.

These remarks were later supplemented by criticisms, such as:

  • “This reduces the sovereignty of the Hungarian tax system and would result in a competitive disadvantage for the European Union, which is unacceptable in the particularly sensitive economic situation caused by the Russo-Ukrainian war.”
  • “The Hungarian corporate tax rate (9%) is much lower than that of all our trading partners, which is the cornerstone of the Hungarian economic policy.”
  • “It would endanger hundreds of thousands of jobs in our country and would mean a return to the situation of 2010 in terms of corporate tax.

A Threat to Competitiveness

These comments indicate that the Hungarian government viewed the issue of the global minimum tax from a sovereigntist, tax competitiveness perspective. This was understandable, given the logic of Hungary’s economic policy: the implementation of an actual tax increase would endanger the competitiveness it had enjoyed thanks to low corporate tax rates. At the same time, the Hungarian government was under great pressure to support the adoption of the EU directive. After all, even if it did not introduce a global minimum tax, the tax difference would simply be collected by other governments. In other words, companies operating in Hungary will have to reckon with an increase in the tax burden no matter how Budapest decided, and moreover, by not implementing the tax, the government would be voluntarily forgoing sources of revenue that it could otherwise have claimed.

The situation of the Hungarian government became more difficult by the fact that on September 9, 2022, the EU’s largest economies—France, Germany, Italy, Spain, and the Netherlands—announced that if the EU directive was not adopted, they were ready to introduce the global minimum tax unilaterally. This step would have meant tens of billions of forints in additional tax liability just for German companies operating in Hungary, whose average effective corporate tax rate, due to various tax breaks, barely reached 3%. Hungary also faced concrete pressure owing to the termination of the US-Hungary double taxation avoidance treaty in early July 2022 and the decision of the European Parliament on national vetoes undermining the global tax agreement, also in early July.

Regarding the former, it is worth pointing out that this was not unexpected: even before the Ecofin (Economic and Financial Affairs Council) meeting in June 2022, US Treasury Secretary Janet Yellen warned Hungary to change its position on the global minimum tax or face the termination of the bilateral double taxation treaty. Although the treaty did not expire until January 2024, the United States showed no intention of concluding a new treaty with Hungary. In Tibor Pálszabó’s opinion, the potential implications for private individuals include the following:

  • If they become residents in both countries, their world income would become taxable in both states.
  • Even without multiple residence, they may become liable for taxation in the country of income in situations where they had previously been exempt, that is, a double taxation situation may arise.
  • The conventional exemptions that would have resolved such double taxation issues will be abolished.

In the case of businesses, there will be a negative change mainly in relation to the withholding tax: dividends, interest, and royalties will be subject to a withholding tax of 30% instead of the previous 5%. The Hungarian economy will experience the negative effects even in the short term (such as through a direct tax revenue loss of 70 billion to 80 billion forints due to the reorganization of the investment structure of US companies), but in the long term the situation is more serious: there could be a significant decline in the economy’s ability to attract capital and retain its labor force.

The European Parliament, meanwhile, criticized the unanimity requirement for decision-making in the field of taxation, calling on the European Commission and the Council to find alternative ways for the EU to fulfil its OECD/G20 commitments, such as through “enhanced cooperation,” unilateral implementation by member states, and transition to qualified majority voting. It also demanded that Hungary lift its veto and urged the Commission and member states to block approval of Hungary’s recovery and resilience plan unless all the criteria were fully complied with.

A Shift in Strategy

Based on the above, it was apparent that by the end of 2022 the Hungarian government found itself in a very difficult situation: it was isolated in the EU and risked being lumped together with conventional tax havens. The Hungarian position, which seemed rigid at first, thus gradually shifted to another strategy: including as many domestic taxes (such as the local business tax) as possible in the effective tax burden in order to avoid actually raising the corporate tax. In this respect, negotiations were successful, as Hungary achieved the following goals:

  • The inclusion of the local business tax in the global minimum tax
  • Exemption of real economic activity
  • Simultaneous introduction of rules in all countries adopting the global minimum tax (so that Hungary does not suffer a competitive disadvantage)
  • The likely collection of the tax difference from target MNE groups in the form of differentiated domestic taxes so that there is no need to change the corporate tax rate of 9%.

Subsequently, on December 12, 2022—after Hungary lifted its veto—EU member states reached an agreement on the directive submitted by the European Commission at the end of 2021 to ensure a global minimum level of taxation for MNEs, which entered into force on December 14, 2022.


The example of Hungary highlights that, contrary to initial fears, the introduction of the global minimum tax does not necessarily entail an increase in the corporate tax burden or restrict the tax sovereignty of low-tax countries if other types of domestic taxes (like the local business tax) are included in the effective tax burden. Therefore, the right strategy for the global minimum tax is not rigid resistance, as it can easily lead to international isolation and reputational loss (such as by being branded a tax haven), but to negotiate a compromise so that competitiveness can be maintained even after implementing the global minimum tax.

References

OECD/G20 Base Erosion and Profit Shifting Project. “Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.” https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.pdf.

Czoboly, Gergely. “Globális minimumadó bevezetésének lehetséges hatásai a klasszikus adóstruktúrákra” [Possible Effects of the Introduction of a Global Minimum Tax on Classical Tax Structures]. Miskolci Jogi Szemle, 2021/5. (3. különszám).

Nobilis, Benedek. “Globális minimumadó: ez nem csak Magyarországnak fájhat” [Global Minimum Tax: This May Hurt Not Just Hungary]. Portfolio. https://www.portfolio.hu/gazdasag/20210413/globalis-minimumado-ez-nem-csak-magyarorszagnak-fajhat-477960.

Hindriks, Jean and Yukihiro Nishimura. “The Compliance Dilemma of the Global Minimum Tax.” LIDAM Discussion Paper CORE, 2022/13. https://dial.uclouvain.be/pr/boreal/object/boreal%3A259159/datastream/PDF_01/view.

Essid, Colleen. “The Global Minimum Tax Agreement: An End to Corporate Tax Havens?” SLU Law Journal Online, 73. https://scholarship.law.slu.edu/lawjournalonline/73.

Deloitte Insights. “Global Minimum Corporate Income Tax. How Might Countries with ‘Low’ or ‘No’ Taxation Respond?” https://www2.deloitte.com/xe/en/pages/tax/articles/global-minimum-corporate-income-tax.html.

Prinz, Dániel and Eszter Kabos. “Miért van szükség globális társasági minimumadóra?” [Why Do We Need a Global Minimum Tax?]. Qubit. https://qubit.hu/2021/08/02/miert-van-szukseg-globalis-tarsasagi-minimumadora.

Hungarian National Assembly. “Az Országgyűlés 24/2022. (VI. 21.) OGY határozata a globális minimumadó bevezetésére vonatkozó európai uniós irányelv elfogadásának elutasításáról” [24/2022 (VI. 21) Decision of the Hungarian National Assembly Rejecting the Adoption of an EU Directive Introducing a Global Minimum Tax].

Kiss, Rajmund. “Kerékbe tört versenyképesség? A globális minimumadó súlyos kockázatairól” [Competitiveness in Tatters? The Serious Risks of the Global Minimum Tax]. Mathias Corvinus Collegium. https://corvinak.hu/gazdasag/2021/05/19/kerekbe-tort-versenykepesseg-a-globalis-minimumado.

Government of Hungary. “A globális minimumadó jelentené a kegyelemdöfést az európai gazdaságnak” [A Global Minimum Tax Would be a Coup de Grâce for the European Economy]. https://kormany.hu/hirek/a-globalis-minimumado-jelentene-a-kegyelemdofest-az-europai-gazdasagnak.

Pardavi, László. “Néhány gondolat a globális minimumadó történetéről, bevezetésének okairól és lehetséges magyarországi hatásairól” [A Few Thoughts on the History of the Global Minimum Tax, the Reasons for Its Introduction, and Its Possible Impact on Hungary]. In Barna Arnold Keserű, Katalin Szoboszlai-Kiss, and Richárd Németh, eds., Salus Vocalis. Csegöldi indulás - Győri érkezés. Ünnepi tanulmányok Fazekas Judit tiszteletére. Győr, Universitas-Győr Nonprofit Kft, 2023.

Adó Online. “Niveus: Magyarország a globális minimumadóról szóló csatát hamarosan elveszítheti [Niveus: The Battle over the Global Minimum Tax Could Soon Be Lost for Hungary]. https://ado.hu/ado/niveus-magyarorszag-a-globalis-minimumadorol-szolo-csatat-hamarosan-elveszitheti/.

Government of Hungary. “Az Egyesült Államok nyomást akar gyakorolni Magyarországra” [The United States Wants to Put Pressure on Hungary]. https://kormany.hu/hirek/az-egyesult-allamok-nyomast-akar-gyakorolni-magyarorszagra.

Pálszabó, Tibor, Veronika Oláh, and Dániel Bajusz. “USA-magyar adóegyezmény felmondása: mi lesz veletek expatok?” [Termination of the US-Hungarian Tax Treaty: What Will Happen to Expats?]. EY. https://www.ey.com/hu_hu/tax/usa--magyar-adoegyezmeny-felmondasa--mi-lesz-veletek-expatok-.

Dajkó, Ferenc Dániel. “Sérülnek az amerikai-magyar kapcsolatok? – Szakértők a kettős adóztatás felmondásáról” [Are US-Hungarian Relations Damaged? Experts on the Termination of Double Taxation]. novekedes.hu. https://novekedes.hu/interju/serulnek-az-amerikai-magyar-gazdasagi-kapcsolatok-szakertoket-kerdeztunk-mi-varhato-a-kettos-adoztatas-egyezmeny-felmondasa-utan.

European Parliament. “European Parliament Resolution of 6 July 2022 on National Vetoes to Undermine the Global Tax Deal (2022/2734(RSP)).” https://www.europarl.europa.eu/doceo/document/TA-9-2022-0290_EN.html.

Mattiassich, Enikő and Károly Szóka. “Impact of the Introduction of A Global Minimum Tax.” In Mustafa Göktuğ Kaya and Haldun Soydal, eds., International Congress of Finance and Tax. March 10–11, 2023, Konya, Türkiye.

Council of the European Union. “Council Directive (EU) 2022/2523 of 14 December 2022 on Ensuring a Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union.” Official Journal of the European Union, L 328, 22.12.2022, pp. 1–58. https://eur-lex.europa.eu/eli/dir/2022/2523/oj.

 

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Rice Bran and Gut Health: Unravelling the Molecular Mechanisms behind Colitis Suppression

February 26, 2024
By 30578

Rice bran has been shown in recent studies to help reduce inflammation in the digestive tract, but the mechanisms by which it affects the body have yet to be clearly elucidated. Using an SRG award, Kazuki Tanaka (Keio University, 2020 and 2021) isolated individual bacteria with the potential to produce colitis-suppressing substances and hopes to commercialize an anti-inflammatory agent in cooperation with a startup.

*     *     *

Japanese dishes like sushi and ramen are famous worldwide. And many Japanese foods are known for making us healthier, notable examples being natto (fermented soybeans), miso (fermented soybean paste), and matcha (green tea powder),[1][2][3] which feed our gut’s good bacteria to help us stay in shape.[4] Think of them as helping the water in our inner fish tank stay clean.

Another such food is rice bran[5]—the outer layer of brown rice—which has been shown in recent studies to help reduce inflammation in the colon, which is a part of the large intestine.[6][7][8][9] Rice bran is rich in fiber, vitamins, and antioxidants—nutrients that work like a multivitamin pill[7][8][10][11] to not only nourish the body but also to make our gut happy and potentially reduce inflammation. Science, though, is still trying to figure out exactly how rice bran affects the body.

Inflammatory bowel disease (IBD) is a debilitating condition characterized by inflammation of parts of the digestive tract. Many of the genes linked to this disease have been identified, yet the number of people getting IBD in Japan has skyrocketed in recent decades.[12] This suggests that the disease is not just about genetics; something else is at play—many scientists believe that an imbalance in the gut’s bacteria population might be a big factor. Using advanced DNA techniques, various studies have tried to pinpoint which bacteria trigger IBD and which ones inhibit it. But understanding the world of bacteria is like solving a giant jigsaw puzzle without knowing what the final picture looks like.[13]

The gut is always changing, and this makes studying it tricky—it is like trying to figure out the story of a movie by only seeing random scenes. Plus, everyone’s gut movie is different because of discrepancies in our diet,[14] lifestyles,[15] and environments.[16] So, to fully understand the many bacterial stories, scientists believe we need a big-picture approach.

Isolating Colitis-Suppressing Bacteria

In my research that was funded in part by SRG, I used a special mouse model to dig deeper into how eating rice bran might affect our gut, particularly whether rice bran might hold the key to keeping inflammation at bay. I adopted a technique that allowed me to look at a lot of data from multiple angles to get the clearest story possible.

Thus far, I have been able to identify a specific group of gut bacteria that seem to have a suppressive effect on colitis. Initially, I conducted a replication experiment to determine whether this bacterial group truly had a suppressive effect on colitis. For this, I compared the suppressive effect in germ-free mice and mice that were administered this colitis-suppressing gut bacterial group. As a result, mice with the colitis-suppressing gut bacterial group indeed showed a suppressive effect on colitis.

To understand which bacteria within this group were responsible for suppressing colitis, I attempted to isolate the different strains. I cultivated bacteria from this group under various conditions, using different media and under anaerobic states, and managed to isolate approximately 200 individual bacteria. Upon further investigation of their metabolic capabilities crucial for colitis suppression, five of these bacteria were found to potentially have the ability to produce substances vital for suppressing colitis. When I extracted and analyzed the genomic DNA of these five bacteria using next-generation sequencing, it turned out that all five were from the same bacterial species.

 

The inflammation-suppressing bacterial candidate strains on a plate medium.

A microscopic image of inflammation-suppressing bacterial candidate isolate.

 

Subsequently, I administered this colitis-suppressing bacterium to germ-free mice to evaluate its suppressive effect. However, a single species of the colitis-suppressing bacterium did not show any suppressive effect on colitis. That no significant increase in substances crucial for colitis suppression was observed in the intestines of these mice suggests that the presence of other gut bacteria is also necessary. Moving forward, I aim to isolate other gut bacteria that are needed for this colitis-suppressing bacterium to be effective.

Lastly, I conducted a whole genome analysis of the colitis-suppressing bacterium. Given that no previous reports suggested that gut bacteria produce substances vital for colitis suppression, this finding could be of great academic significance. However, despite several attempts under different conditions, I was unable to extract DNA of adequate quality for analysis. External agencies also faced challenges when trying to extract it. In the future, I plan to explore the conditions appropriate for DNA extraction.

Achieving High Impact

I expect that the detailed molecular mechanism by which rice bran intake leads to colitis suppression can eventually be clarified. In conventional nutritional science, importance is placed on the components contained in foods, and little has yet been elucidated regarding the mechanism of gut microbiota. In my research, I hope to promote a fuller understanding of the role gut microbiota plays in how food intake affects the body. Such findings can be expected to have a high social and academic impact, and I hope to publish them in a well-known international scientific journal. In addition, an application for an international patent will be filed to develop a new therapeutic drug for colitis based on the findings of the colitis suppression mechanism. I thus believe that my research will be able to contribute to patients with unmet medical needs.

Research results must be commercialized in order for them to be disseminated to the public. A patent for an anti-inflammatory agent is scheduled to be granted next year. A new patent is pending in collaboration with a startup company, and our research team is currently in discussions with the company to commercialize the product. We have presented our findings at conferences to promote food developments not only for rice bran but also for many other foods worldwide, and we will be writing papers this year to disseminate our findings.

 

[1] Takechi R, Alfonso H, Hiramatsu N, Ishisaka A, Tanaka A, Tan L, Lee AH. Elevated plasma and urinary concentrations of green tea catechins associated with improved plasma lipid profile in healthy Japanese women. Nutr Res. 2016;36(3):220–6.

[2] Nakata T, Kyoui D, Takahashi H, Kimura B, Kuda T. Inhibitory effects of laminaran and alginate on production of putrefactive compounds from soy protein by intestinal microbiota in vitro and in rats. Carbohydr Polym. 2016;143:61–9.

[3] Shirosaki M, Koyama T. Laminaria japonica as a food for the prevention of obesity and diabetes. Advances in Food and Nutrition Research. 2011;64:199–212.

[4] Kanai T, Matsuoka K, Naganuma M, Hayashi A, Hisamatsu T. Diet, microbiota, and inflammatory bowel disease: Lessons from Japanese foods. Korean J Intern Med. 2014;29(4):409–15.

[5] Yano JM, Yu K, Donaldson GP, Shastri GG, Ann P, Ma L, et al. Indigenous bacteria from the gut microbiota regulate host serotonin biosynthesis. Cell. 2015;161(2):264–76.

[6] Al-Fayez M, Cai H, Tunstall R, Steward WP, Gescher AJ. Differential modulation of cyclooxygenase-mediated prostaglandin production by the putative cancer chemopreventive flavonoids tricin, apigenin and quercetin. Cancer Chemother Pharmacol. 2006;58(6):816–25.

[7] Islam MS, Murata T, Fujisawa M, Nagasaka R, Ushio H, Bari AM, et al. Anti-inflammatory effects of phytosteryl ferulates in colitis induced by dextran sulphate sodium in mice. Br J Pharmacol. 2008;154(4):812–24.

[8] Komiyama Y, Andoh A, Fujiwara D, Ohmae H, Araki Y, Fujiyama Y, et al. New prebiotics from rice bran ameliorate inflammation in murine colitis models through the modulation of intestinal homeostasis and the mucosal immune system. Scand J Gastroenterol. 2011;46(1):40–52.

[9] Shafie NH, Esa NM, Ithnin H, Saad N, Pandurangan AK. Pro-apoptotic effect of rice bran inositol hexaphosphate (IP6) on HT-29 colorectal cancer cells. Int J Mol Sci. 2013;14(12):23545–58.

[10] Choi JY, Paik DJ, Kwon DY, Park Y. Dietary supplementation with rice bran fermented with Lentinus edodes increases interferon-γ activity without causing adverse effects: a randomized, double-blind, placebo-controlled, parallel-group study. Nutr J. 2014;13:35.

[11] Islam J, Koseki T, Watanabe K, Ardiansyah, Budijanto S, Oikawa A, et al. Dietary supplementation of fermented rice bran effectively alleviates dextran sodium sulfate-induced colitis in mice. Nutrients. 2017;9(7):747.

[12] Jostins L, Ripke S, Weersma RK, Duerr RH, McGovern DP, Hui KY, et al. Host-microbe interactions have shaped the genetic architecture of inflammatory bowel disease. Nature. 2012;491(7422):119–24.

[13] Ridenhour BJ, Brooker SL, Williams JE, Van Leuven JT, Miller AW, Dearing MD, Remien CH. Modeling time-series data from microbial communities. ISME J. 2017;11(11):2526–37.

[14] Sonnenburg JL, Bäckhed F. Diet–microbiota interactions as moderators of human metabolism. Nature. 2016;535(7610):56–64.

[15] David LA, Materna AC, Friedman J, Campos-Baptista MI, Blackburn MC, Perrotta A, et al. Host lifestyle affects human microbiota on daily timescales. Genome Biol. 2014;15(7):R89.

[16] Cervantes-Barragan L, Chai JN, Tianero MD, Di Luccia B, Ahern PP, Merriman J, et al. Lactobacillus reuteri induces gut intraepithelial CD4 + CD8αα + T cells. Science. 2017;357(6353):806–810.

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A Visit to the Multicultural Campus of Ritsumeikan Asia Pacific University

February 19, 2024

On January 19, 2024, three members of the Sylff Association secretariat visited Ritsumeikan Asia Pacific University (APU), located on the southernmost of Japan’s four main islands.

APU President Yoneyama, left, and Executive Director Suzuki.

The visit began with a meeting between Tokyo Foundation Executive Director Mari Suzuki and newly appointed APU President Hiroshi Yoneyama, who described the various measures APU took to meet the challenges of the COVID-19 pandemic and expressed his delight to see students actively interacting with one another on campus again. Members of the Sylff Association secretariat toured the Green Commons, the beautiful new academic building on the APU campus.

The meeting with the APU Sylff Steering Committee was attended by Vice President Satoshi Kawazoe; Professor Lailani Alcantara, dean of the School of Management; Director-General Yoshiki Osawa; Katsuya Sakai, director of the Finance Department at Ritsumeikan Trust; Deputy Director Keisuke Yamashita; and Michiko Nakamura and Asako Miyashita of the Student Office. This was the first on-site SSC meeting at APU in five years due to travel restrictions during the pandemic.

Vice President Kawazoe highlighted the unique, multicultural campus environment of APU, attended by students from 107 countries/regions. During the review of the Sylff program at the university, members of the SSC and the Sylff Association secretariat exchanged views on the selection of new Sylff fellows.

Eylla Gutierrez, center, and Alexander Dobrian, second from right, with members of the Sylff Association secretariat.

Members of the secretariat also had a chance to meet two fellows: Eylla Laire Gutierrez, enrolled in a doctoral program, and Alexander Dobrian, pursuing an MBA—both selected for a Sylff fellowship in 2023. In their presentations, they spoke with passion about their respective research topics and commitment to creating real-world impact through their expertise.

Gutierrez was recently awarded the first prize in a national essay contest for international students in Japan, hosted by the Foundation for the Advancement of Life & Insurance Around the World (FALIA Essay Competition 2023). Her winning essay echoed her doctoral research, focused on the empowerment of women in her native Philippines. We are delighted with her achievement and proud to have such outstanding fellows in the Sylff community.

Gutierrez at the awarding ceremony of FALIA Essay Competition 2023.

This year marks the fifteenth anniversary of the Sylff program at APU. We are grateful for this fruitful partnership and look forward to the emergence of many more young leaders from APU.

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Sylff Research Grant (SRG) Recipients for Fiscal 2023

February 13, 2024

The Sylff Association secretariat is pleased to announce that 51 fellows have been named to receive a Sylff Research Grant (SRG) for fiscal 2023 (April 2023 to March 2024).

SRG aims to support a variety of research activities of the applicant, including data collection, hiring of research assistant(s), domestic fieldwork, international fieldwork, and outsourcing of tasks requiring specialized knowledge or skills, to encourage fellows to pursue high quality research that will build the foundation for their future careers.

We received a great number of outstanding applications from fellows all over the world. The selection was highly competitive, and all applications were carefully reviewed from the perspectives of clarity of research issue(s), goal(s), and outcome(s); sophistication of research methodology; and feasibility of the budget proposal and its relevance to the research issues, goals, and outcomes.

Congratulations to all the awardees! We hope the research conducted with this award will bear much fruit, both for the fellow and for society. The list of the 51 awardees and their research disciplines can be viewed at: List of SRG Awardees FY2023

You may find their Sylff profiles at: https://www.sylff.org/fellows/?p=SRG

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Enhancing Immigrant Integration through Social Connections: An Experimental Study in Sweden

February 7, 2024
By 28006

Olle Hammar’s (Uppsala University, 2020) Sylff Research Grant focused on evaluating a program aimed at promoting social inclusion of immigrants and refugees in Sweden. The project, involving a randomized controlled trial in partnership with an NGO, assessed the impact of contact with natives on immigrants’ social, economic, and cultural integration. Preliminary results suggest potential benefits, including sustained relationships and increased job opportunities for immigrants.

*     *     *

Introduction

My project on “Social Networks and Immigrant Integration: Experimental Evidence from Sweden,” conducted together with Mounir Karadja and Akib Khan at Uppsala University, seeks to understand and enhance immigrant integration in Sweden, a country known for its progressive social policies but which is now grappling with the challenges of integrating its growing foreign-born population (Statistics Sweden 2019). The project began with a deep interest in understanding immigrant integration in Sweden. Intrigued by the pivotal role social networks can play, we aim to explore the impact of social interactions between immigrants and native Swedes on the integration process.

The study is conducted in partnership with Nya Kompisbyrån (New Friend Agency), a Swedish nongovernmental organization facilitating informal meetings between immigrants and natives in Sweden. Immigrants, predominantly from low- and middle-income countries, are matched with native Swedes, fostering opportunities for language practice, cultural exchange, and network expansion. Through a randomized controlled trial, we assessed the effectiveness of this program.

 

Nya Kompisbyrån operations manager Mardin Baban, left, and Mounir Karadja of Uppsala University’s Department of Economics.

The COVID-19 pandemic posed significant challenges to this project, temporarily forcing participants to shift from direct, in-person interactions to digital meetings. Thankfully, solutions to these challenges were facilitated by the SRG, which allowed for the implementation of a more structured and sustainable survey data collection approach.

Background and Methodology

Sweden has experienced a significant influx of immigrants from diverse backgrounds, and their social and economic integration has become a key issue (Statistics Sweden 2019). Our research focuses on evaluating the effectiveness of social networks in facilitating this integration by working closely with Nya Kompisbyrån, one of the largest NGOs of its kind in Sweden.

In this project, we use a randomized controlled field experiment to evaluate a novel program administered by Nya Kompisbyrån.

The methodology is based on the observation that, since more immigrants than natives sign up for this program, not all immigrants can be matched with a native Swede. As such, our evaluation uses a randomization design where two immigrants are selected as potential matches for each native, based on common interests, gender, and age.

One of the immigrants is randomly assigned to meet with the native, while the other is placed in the control group. Individuals in both groups, as well as the participating native Swedes, were surveyed by an external survey company (co-financed by SRG) during the implementation period between October 2022 and September 2023. Using this data and methodology, we are able to assess the causal effects of contact with natives on immigrants’ social, economic, and cultural integration.

While the data collection phase is now finished, which was the aim of the SRG-funded part of the project, our next step will be to analyze the data and assess the final results. Preliminary findings suggest large potential benefits for the participating immigrants. Most matched pairs continue to meet after their first contact, indicating that a large share of matches results in meaningful and sustained relationships. In addition, many of the job-searching participants indicate that they have received a job or internship through their native Swedish contact. The interactions also seemed to facilitate stronger social networks for participating immigrants.

Adapting to COVID-19

The pandemic posed significant challenges to our original plan of studying in-person meetings between the participants. We adapted to these circumstances by shifting to a more sustainable format of long-term survey data collection, which allowed us to continue our research without compromising the integrity of the participants or the depth of our analysis. The project had to be temporarily suspended when COVID-19 made in-person meetings impracticable, but we were able to continue conducting fieldwork thanks to SRG.

The project will potentially have broad implications for Sweden’s approach to immigrant integration. It examines the importance of social connections and cultural exchange in breaking down barriers and fostering a more inclusive society (Allport 1954). The findings will offer valuable insights for policymakers, demonstrating how initiatives promoting direct social interactions between immigrants and natives can enhance the integration process.

Another contribution of this project is its experimental attempt to evaluate an NGO-driven intervention for immigrant integration. Many NGOs are active in the field of integration across the globe and often have innovative approaches based on voluntary participation, as well as low operating costs (Lundberg et al. 2011). In Sweden, the government identifies civil society as an important actor for integration. Yet, despite public and private investments, there is a lack of knowledge on the causal effects of civil society organizations in this domain (Osanami Törngren et al. 2018). As such, this project also contributes to evaluating civil society’ broader role in immigrant integration.

Both Academic and Practical Benefits

This journey has been both challenging and rewarding. Adapting to the unforeseen circumstances posed by the pandemic while maintaining the integrity of our research project was a significant learning experience. We are very grateful for support from the Sylff Association in helping us quickly adapt to these changed circumstances. The SRG funding was instrumental in the success of this project, enabling us to navigate unforeseen obstacles and contribute significantly to the field. It has also allowed me to continue my collaboration with my research colleagues and the NGO, as well as other actors in the area of immigrant integration in Sweden and abroad.

The project has been pre-accepted for publication in the Journal of Development Economics (Hammar, Karadja, and Khan 2023), based on a pre-results review. This, we believe, is a testament to its academic significance and practical relevance. The insights gained from this research will contribute not only to the academic understanding of immigrant integration but also offer practical insights for NGOs and policymakers on the potential of social networks and informal meetings. It strengthens our belief in the power of simple human connections to bridge cultural divides and enhance societal cohesion.

Our next step will be to analyze and disseminate the final results of this project. Going forward, we will further explore the dynamics of immigrant integration in different cultural and societal contexts. Our research also highlights the need for more innovative approaches to policymaking in the realm of migration and integration.

 

Social integration through coffee?

References

Allport, G.W. 1954. The Nature of Prejudice. Reading, MA: Addison-Wesley.

Hammar, O., Karadja, M., and Khan, A. 2023. “Social Networks and Immigrant Integration: Experimental Evidence from Sweden,” Journal of Development Economics, Accepted (Pre-Results Review).

Lundberg, E., Brundin, P., Amnå, E., and Bozzini, E. 2011. “European Civil Societies and the Promotion of Integration: Leading Practices from Sweden, Great Britain, the Netherlands and Italy.” In Social Rights, Active Citizenship and Governance in the EU. Baden-Baden: Nomos Verlagsgesellschaft.

Osanami Törngren, S., Öberg, K., and Righard, E. 2018. “The Role of Civil Society in the Integration of Newly Arrived Refugees in Sweden.” In Newcomer Integration in Europe: Best Practices and Innovations since 2015.

Statistics Sweden. 2019. “Integration: En beskrivning av läget i Sverige,” Integration 13.

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Western Cape, Keio Fellows Featured at Symposium Co-Organized by the Tokyo Foundation

February 2, 2024

Two Sylff fellows were featured at a symposium held in Tokyo to discuss the biggest challenges facing global society, consider the changes required in adapting to a digitalized world, and explore ways to develop the human resources needed to build a brighter future. The November 9 hybrid event was jointly organized by the Tokyo Foundation for Policy Research and the Sasakawa Peace Foundation.

The session focusing on the activities of the Tokyo Foundation began with Executive Director Mari Suzuki introducing the Sylff program. She described the history of the global fellowship, launched at a time when the Cold War was nearing its end, and described the unique decentralized nature of its operations focused on developing the leaders required in each country and community.

Executive Director Mari Suzuki.

This was followed by a video introducing the Basic Concepts Program developed by Louis Benjamin (University of the Western Cape, 2001) as part of his doctoral studies. Using a Sylff Project Grant, Benjamin implemented the program from 2019 to 2022 in rural and disadvantaged communities of Northern Cape Province—one of the poorest regions of South Africa. BCP is a cognitive intervention initiative aimed at enhancing the preparedness of preschool children for early school education and beyond, and it is now being used throughout South Africa in collaboration with the Department of Basic Education and other education trusts and NPOs.



Mihoko Sakurai (Keio University, 2013) made an in-person presentation on the importance of enhanced global interaction in fostering the next generation of researchers in the digital age—drawing on her own experiences as a young scholar at US and European universities. She is an expert on information systems, particularly on how local municipalities can more effectively use digital tools to enhance community resilience in coping with natural disasters. In addition to serving as an executive research fellow and associate professor at the Global Communication Center, International University of Japan, she has recently been appointed a senior expert for disaster readiness in the Japanese government’s Digital Agency.

Mihoko Sakurai.

 

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SLI Award for Project to Create an Educational Model for the Indigenous Amahuaca People in Peru

January 24, 2024

Pilar Valenzuela

The Sylff Association secretariat is pleased to announce another recipient of a Sylff Leadership Initiatives (SLI) award.

Pilar Valenzuela (University of Oregon, 1995–96) is drawing on her extensive experience with and knowledge of the cultures of indigenous communities in the Peruvian Amazon to spearhead an effort to create an educational model for the Amahuaca people. Her SLI project will seek to prepare the indigenous community to interact with wider society while protecting their unique heritage.

Valenzuela was a Sylff fellow at the University of Oregon, from where she obtained her PhD in linguistics. She currently holds the position of a full professor in the Department of World Languages and Cultures at Chapman University in California.

Amahuaca participants learning the alphabet.

Congratulations to Pilar Valenzuela on winning the award. Fellows who are interested in implementing a social engagement project of their own should check the SLI page for eligibility requirements and application details. We look forward to receiving many more innovative ideas for positive social change.

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The Viability of Coproduction in South Africa’s Local Governments

January 15, 2024
By 28866

Leon Poshai (University of the Western Cape, 2020) used an SRG award to conduct interviews with both local leaders and residents in five South African municipalities to assess the extent to which coproduction—the formalized process by which local governments engage with citizens—can be used to address community problems and enhance the effectiveness of service delivery.

*     *     *

My research sought to assess the viability of coproduction as a strategy for ensuring that citizens have a voice in the policymaking processes in the context of local governance in South Africa. Coproduction refers to the formalized process by which the government engages with citizens when making decisions that affect them (Khine et al. 2021). In the context of local governance, coproduction involves consulting and engaging with residents and their local leaders when reaching decisions on how services should be delivered. The process of coproduction has been regarded as a best practice for the cogeneration of actionable knowledge to address community problems (Osborne, Radnor, and Strokosch 2016).

The overall aim of the study was to assess the extent to which the coproduction model can be used to enhance the effectiveness of service delivery in South Africa’s local government institutions. In this regard, the research explored the various measures that local governments in South Africa are using or can use to ensure that there is regular engagement between local government leaders and residents as recipients of services. For example, the photo below shows ward councillors interacting with residents on community development, which can be seen as coproduction in action.

Citizen-government interaction forms the core of the process of coproduction, https://twitter.com/CityofJoburgZA, accessed June 16, 2023.

Through a qualitative research approach deploying the interview method, I was able to interact with residents and local government leaders in five cities in South Africa, namely, Cape Town, Mpumalanga, Pretoria, Limpopo, and Johannesburg. Their selection was based on the fact that they are major municipalities in South Africa, making them a rich social laboratory for the collection of diverse data from a larger population. I combined both convenience sampling and purposive sampling in selecting the participants. Both face-to-face interviews and telephone interviews were used, based on the availability of the participants.

Through the interviews, I managed to obtain a balanced overview of the utility of coproduction from both the residents and local leaders. I traveled to these cities to interact with residents and obtain an in-depth understanding of the issue investigated in its natural context. This enabled me to gain an appreciation of the need for coproduction as a response to the different service delivery challenges facing South Africa’s local governments.

The study was guided by the following research question:

  1. What are the current strategies for promoting the codesign of policy solutions to address local government challenges in South Africa?
  2. What can local government institutions in South Africa do to improve their citizen engagement methods toward the codesign of solutions to challenges confronting their communities?

The main findings of the study indicate that in local governance, coproduction is the glue that binds societies together, as it brings the governors (leaders) and the governed (residents) together in defining the problems affecting their communities and in designing appropriate solutions to address those challenges. The photo below shows the leadership-resident interface in a South African local government.

Deliberations between a local leader and residents on policy issues, https://twitter.com/CityofJoburgZA/status/1115171024973312000/photo/3, accessed August 21, 2023.

The study also revealed that coproduction enables the kind of regular interaction between the local leadership and residents that is crucial for local development, allowing for collaboration and idea transfer. Without coproduction, it is difficult for local leaders to know what problems are affecting residents and what solutions are needed to address the problems. Thus, the study found that the development of relevant policy responses to local problems hinged on the engagement or collaboration between the leaders and the residents, which is made possible through coproduction.

The study also revealed that when coproduction is not practiced, residents often resist the resolutions passed by their local leaders, sometimes leading to protests or unrest in the communities. Thus, citizens expect that they are duly consulted by their leaders in the decision-making process, and when this is not done, they feel that they are neglected. Residents will not support decisions made without their participation. Interactions with residents revealed that the main reason for protests in different South African municipalities was because of the imposition of decisions by their leaders without their input. Picketing at government offices occurs when residents feel that they are sidelined in the formulation of decisions that have a direct bearing on their lives, and this underscores the need for leaders to engage residents in the decision-making process and the need for coproduction. Interviewed residents highlighted that they feel valued if their leaders engage them before making decisions that affect them, and if this is not done, they will protest against that decision as reflected in the image below: 

Picketing because of poor government-resident engagement, https://www.groundup.org.za/article/tembisa-residents-meet-councillors-over-reblocking-demolitions/, accessed October 25, 2023.

Residents interviewed in Limpopo noted that coproduction is the only way in which they can share their grievances with their local leaders. They indicated that solutions for community problems should come from the members of the community themselves and not be imposed by their leaders. As such, residents indicated that they expect to be consulted by their leaders, such as mayors, councillors, and municipal managers, when decisions affecting their lives are made. The residents indicated that the main service delivery functions that they expect to be consulted on as part of the process of coproduction include issues of water provision, road construction and maintenance, sewer reticulation, waste management, and general good governance. The views shared by the residents emphasized the need for coproduction, which allows for regular engagement between local leaders and residents in designing solutions to problems faced in their areas.

Furthermore, the study showed that coproduction contributes to greater transparency in local governance. The use of local financial resources (local budget) can be done in a more transparent manner if there is open dialogue and communication between the leaders and the residents, which coproduction enables. In particular, transparency in financial resource utilization is achieved through agreements on the areas of resource prioritization. The existence of a pre-agreed strategic plan on the utilization of financial resources enables residents to monitor if the utilization process is in line with the agreed plans, and this helps to minimize the chances of corruption and abuse of public funds (Bandola-Gill et al. 2023). Interviewed municipal officials in Pretoria and Cape Town indicated that they consult and involve residents in developing local budgets and keep them in the loop regarding financial decision-making. This is a major component of coproduction, which creates a sense of transparency in the utilization of financial resources. The residents also concurred that they are consulted in the budget formulation process, and, as ratepayers, this helps them to check the extent to which their rates are being used for agreed priorities.

The research also established that coproduction is key to bridging the gap between governments and citizens. It represents the principal avenue for citizens and the government to engage on issues that matter most, particularly issues of service delivery, helping to build trust between the leaders and the residents. Trust is a fundamental pillar of sound governance, as it nurtures an honest relationship between the government and the citizens (Campanale 2020). Coproduction engenders dialogue between the government and the citizens, which helps in cosetting the local development agenda and policy priorities. 

The study revealed that coproduction should be promoted through public consultations, public opinion surveys, local hearings, and community engagement programs—activities that help provide residents with the necessary information in the decision-making process. Coproduction in South African municipalities creates an open space where residents can share their concerns, offer feedback, and develop proposals for action with their leaders. This helps to ensure that the decisions made by the leaders are resonant with the expectations and realities of the residents. The interview with community leaders in Mpumalanga indicated that the policy decisions made using the coproduction model are highly likely to be responsive to the challenges faced by the communities.

Scholars like Moallemi et al. (2023) have argued that coproduction enables the sharing of information on activities and programs being implemented by the government and helps raise awareness on policy issues. In addition, the process of coproduction leads to greater clarity on the roles that both leaders and residents must play in the efforts to resolve community challenges. Some residents indicated that information on government programs remains erratic, however, as most decisions continue to be made without their input. This raises concerns about the effectiveness of stakeholder engagement in the South African local government system. It has been argued that the disclosure of information allows citizens to gain an understanding of the issues that affect them. Thus, local government institutions are encouraged to promote the proactive disclosure of relevant information in a clear and timely manner.

The topic of coproduction was chosen because it enables an examination of the interface between the local government leadership and residents. The topic provided a formal way of demonstrating why collaborative engagement between the governors and the governed are important. The findings of this study can contribute to society by enhancing understanding of the need for government and residents to collaborate in defining problems and in generating solutions to address them together. These findings can help local government practitioners in different parts of the world develop strategies for engaging residents and formulate relevant solutions to the challenges facing contemporary local government institutions.

References

Bandola-Gill, Justyna, Megan Arthur, and Rhodri Ivor Leng. 2023. “What is co-production? Conceptualising and understanding the co-production of knowledge and policy across different theoretical perspectives.” Evidence & Policy 19(2), 275–298.

Campanale, Cristina, Sara Giovanna Mauro, and Alessandro Sancino, 2021. “Managing co‑production and enhancing good governance principles: Insights from two case studies.” Journal of Management and Governance 25(1), 275–306.

Khine, Pwint Kay, Jianing Mi, and Raza Shahid. 2021. “A Comparative Analysis of Co-Production in Public Services.” Sustainability, 13(12), 6730.

Moallemi, Enayat A., Fateme Zare, Aniek Hebinck, Katrina Szetey, Edmundo Molina-Perez, Romy L. Zyngier, Michalis Hadjikakou, Jan Kwakkel, Marjolijn Haasnoot, Kelly K. Miller, David G. Groves, Peat Leith, and Brett A. Bryan. 2023. “Knowledge co-production for decision-making in human-natural systems under uncertainty.” Global Environmental Change 82, 102727.

Osborne, Stephen P., Zoe Radnor, and Kirsty Strokosch, 2016. “Co-Production and the Co-Creation of Value in Public Services: A suitable case for treatment?” Public Management Review 18(5), 639–653.