This doctoral thesis presents a critical analysis of the global debate on the ‘good governance’ of the extractive resources sectors. Its starting point is that over the past decade this debate has seen a remarkable elevation, while at the same time the governance concept itself has been subjected to critique. To understand how the sector-focused ‘good governance’ agenda compares against this critique, the thesis uses a conceptual framework that identifies the different uses of this concept. Against this background, it reviews the main scholarly debates on the opportunities and challenges of countries producing extractive resources and identifies four critical questions, which it then sets out to answer. The main argument is that the global debate on the ‘good governance’ of the extractive resources sectors has been built on the widely endorsed conclusion that ‘good institutions’ make for better outcomes and that therefore producer countries need to improve their sector institutions. However, this seemingly obvious conclusion has ignored the complexity and confusion around ‘governance’ and ‘institutions’ that prevails across the broader social science literature. This argument is based on the answers the thesis provides to four critical questions: what are institutions; how do institutions change; how are they enforced; and do existing institutions matter for the design of interventions aimed at improving institutions. The thesis lays open that the policy conclusions of the global debate are premised on the dominance of a particular reference point paired with a particular methodology where the emphasis has been on, first, identifying the types of institutions that have apparently led to desired results, and then to promote these as a means to steer towards these results. It concludes that this focus has premised the global agenda on a false sense of clarity on what producer countries ought to be improving.

This doctoral thesis contains three essays on the macroeconomic impact of inflation targeting: (1) Inflation-targeting regime, as a framework for monetary policy conduct, has been adopted by central banks in thirty countries. Some of these countries enjoy high incomes while others have middle incomes. In contrast to the development-based classification –often applied in the literature, thus ignoring income disparity– this study employs income-based classification in constructing the data sample. The objective is to investigate, using a panel of middle-income countries, whether inflation targeting is a good remedy for high inflation. In addition to the commonly used covariates in the literature, this study also includes in its covariate matrix the worldwide governance indicators as proxy for institutional quality. The findings exhibit a significant reduction of inflation and its volatility among the inflation-targeting adopters compared to the non-adopting middle-income countries. The results are robust to the exclusion of high inflation episodes, and to using the alternative measures of inflation. The results are also robust to the post-estimation sensitivity tests recommended for such empirical analysis. (2) Many economists acknowledge the paramount role that foreign investment plays in fostering economic development and growth via integrating economies around the globe. Studies have shown that foreign investment, particularly foreign direct investment (FDI) is attracted to countries that exhibit good governance, low uncertainty and a high degree of macroeconomic stability. The literature also argues that monetary policy under inflation targeting (IT) mitigates uncertainty, enhances governance and brings macroeconomic stability to the adopting countries. Hence, it would seem that the IT-adoption should enable the adopting countries attract the largest FDI inflows. To verify this conjecture, this study performs a comparison between the IT-adopting countries and the non-adopters in attracting FDI. Using a panel of OECD and middle-income countries, the empirical findings exhibit an interesting but contradicting pattern: when it comes to the OECD countries, the results show that the IT-adopters do better than the non-adopters in attracting the FDI inflows. For the middle-income countries, however, the IT-adoption appears to have the opposite effect: a significant reduction in the FDI inflows is witnessed among the IT-adopters compared to their counterparts. The results are robust to the post-estimation sensitivity tests. (3) Inflation targeting, as a monetary-policy framework, is said to promote economic efficiency and growth. Yet, when evaluating the macroeconomic performance of inflation-targeting regimes, the existing literature only emphasizes the dynamics of inflation and the costs associated with taming inflation. There is hardly any assessment of the claim of efficiency and growth. To fill this gap, and to measure the causal impact of inflation-targeting adoption on economic efficiency, we compare the dynamics of output growth and long-term unemployment between countries that have adopted inflation targeting and the non-adopting countries. Our findings seem to refute the efficiency claim, and paint a bleak picture of inflation targeting: when compared to the countries that did not adopt inflation targeting, there is a significant reduction in the average growth rate among the inflation-targeting adopters by over ½ percentage point. Additionally, long-term unemployment significantly rises among the inflation-targeting countries by almost 2 percentage points as compared to the non-adopters. These results are robust to both the exclusion of the outlier observations and to the sensitivity tests recommended for such analysis.

This diploma thesis deals with one of the aspects of armed groups' governance, namely the institutions that are created or used by armed groups and the role these institutions play in the military-civilian relations. The case study chosen is the Eritrean People's Liberation Front. This armed group was formed in 1973 in the context of the struggle for Eritrea's independence, and in the next decades it created a management system that included taxation, political committees, education, health care, and dispute settlement mechanisms. After the establishment of independent Eritrea in 1993, ELOF evolved into the People's Front for Democracy and Justice, which still remains a ruling Eritrean political party. The primary aim of the thesis is to answer the question of the role played by institutions created by non-state armed groups in building their relations with the civilian population. He is also marginally devoted to the development of Eritrea after independence.

Project finance has become a vital financing vehicle for undertaking capital-intensive and infrastructure investments. In 2017 alone, the value of deals signed using project finance was estimated at approximately $229 billion. Despite its increasing importance, little is known regarding the impact of project-level, and country characteristics on the loan terms. This thesis proceeds in examining these determinants along three empirical essays. The first essay (Chapter 3) focuses on how domestic lead arrangers certification (in emerging markets) impact the pricing of project finance loans. Using a sample 1270 project finance loan tranches signed between 1998 and 2011, and worth over $300 billion, the chapter posits that domestic lead arrangers certification reduce search and information cost, which in turn, reduces the financing cost. The results, after controlling for endogeneity of certification decision, indicate a reduction of 47 basis points in the spread offered on PF loans. The magnitude of this reduction differs across industries, geographic region, and income classification of the project countries. The second essay (Chapter 4) examines the relationship between PF contractual structures and loan outcomes, using a sample of 5872 project finance loan tranches signed between 1998 and 2013, and worth approximately $1.2 trillion. The chapter hypothesises that (i) non financial contracts (NFCs) (that is, contracts used to manage the various project functions), reduces overall project risk, (ii) the involvement of project sponsors as key counterparties to the non-financial contracts is an additional signal of project s potential worth, and (iii) the effects observed in (i and ii) are stronger, if sponsor counterparties have verifiable credit ratings. After matching loan tranches with NFCs to those without, the results indicate that the use of NFCs reduce both the loan spreads and leverage ratios. This impact is higher if the sponsor counterparties are credit-rated. The results are also stronger for developing countries. The third essay examines the impact of country-level institutions on project finance loan spread and leverage ratio, using a sample of 3,362 loan tranches signed between the year 1998 - 2012. The chapter investigates whether political and legal institutions are substitutes (or complements), that is, if improvement in one absorbs the weakness of the other, and vice versa. Further, the essay examines if project finance network of contracts substitutes for these institutions. The results indicate that political and legal institutions are substitutes. Specifically, improvements in political institutions lead to a reduction in both the loan spread and leverage ratio for countries with weak legal and governance institutions. The chapter also finds that where NFCs are included in PF, the impact of political institutions on loan spread reduces. On the other hand, the impact of political institutions on leverage ratio is higher when NFCs are used. The findings from the three research chapters provide interesting insights on how lenders and sponsors create value through contract design.