Centre for Evidence-based Policy Advice (IWH-CEP)

The Centre for Evidence-based Policy Advice (IWH-CEP) of the IWH was founded in 2014. It is a platform that bundles and structures activities in research, teaching, and policy advice. IWH-CEP pursues the objective of creating better foundations for a causal analysis of policy implemented across different sectors.

IWH-CEP is designed as a service unit and supports the activities in the research groups by providing access to a supra-regional research and policy advising network as well as access to data sets for causal analyses. IWH-CEP lies at the interface between three areas of responsibility and carries out coordination functions between them.

Tasks    Team    Events    Projects    Publications

IWH Subsidy Database   Research Group "Evaluation of Subsidy Programmes"

The tasks of the IWH-CEP

The government intervenes in the market mechanism through a lot of policy instruments in order to achieve various economic objectives. However, for policy makers, it is important to know whether the originally intended objectives are also achieved. Scientific methods can make a significant contribution to this. These are necessary to establish a clear connection between a policy instrument and its effect. Against this background, the Centre for Evidence-based Policy Advice (IWH-CEP) at the IWH was founded.

Research and Policy Advice

Research and policy advice are organized via the different research groups of the IWH. This organizational structure allows to assess policy changes from both a macro and micro perspective and cover different sectors of the economy.

To gain a better understanding of structural changes and economic growth, a first focus is set on the evaluation of subsidy programmes for firms and regions, for example, the Joint Task of "Improving the Regional Economic Structure" (which is the most important regional policy support scheme in Germany) and the measures envisaged by the Coal Regions Investment Act (InvKG) are being evaluated on behalf of federal and state governments. The objective of the projects is to use advanced evaluation techniques to assess the impact of policy support measures. The projects are carried out under the responsibility of the IWH Research Group "Evaluation of Subsidy Programmes".

A second key area includes analyses on regulatory reforms and effects. Especially having in mind that after the recent financial crisis, a re-regulation of the financial system took place, it is of utmost importance to evaluate the effectiveness of the reforms as well as to assess whether there are unintended side-effects. In the context of the project The Political Economy of the European Banking Union, researchers in the financial markets department study how the directives underlying the European Banking Union are implemented across member states as well as whether the new regulatory framework has implications for banking stability and financial intermediation.

Set-up of a Network

The IWH-CEP sees itself as part of various initiatives in the field of evidence-based economic policy. This is to ensure the unit's visibility and the awareness of the issue among the scientific and policy community.

Set-up and Maintenance of Databases

The major challenge in the analysis of effects of government interventions and regulatory changes  lies in the accessibility of administrative data. IWH-CEP advances into this direction by building up databases that can be shared with other researchers.

Therefore, the IWH Subsidy Database is set up, maintained and completed according to the (current) specialisation in the analysis of effects of industrial policy support schemes. Information about the funded projects alone is not sufficient to conduct causal analyses – corporate data provided by official and commercial statistics must be added; this is organised using record linkage techniques. This task is carried out at the IWH Research Data Centre.

Additionally, the financial market department has set up the website International Banking Library, which is a web-based platform for the exchange of research outcomes on cross-border banking. It provides access to data sources, academic research on cross-border banking, both theoretical and empirical, as well as information on regulatory initiatives. Thus, the website provides researchers and policymakers with a comprehensive overview of available data to conduct policy evaluation and the current stance of the literature on regulation and supervision of financial markets. The quarterly newsletter summarizes recent developments and is appreciateted by both academics and central bankers.

The website of the International Banking Library also allows access to the Financial Markets Directives Database. This database provides  information about financial markets regulation in Europe since the last financial and sovereign debt crisis. One key element is the harmonization of rules for capital regulation, bank resolution and deposit insurance on the way to the European banking and capital market union. The first element of the database provides data on the implementation of the Capital Markets Union in the European Union (see Emlein, M.; Sfrappini, E.; Tonzer, L.; Zgherea, C.: Capital Markets Union: Database of Directives and Regulations. IWH Technical Reports 2/2022).

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Events

The IWH-CEP organises the annual transfer conference "From Transition to European Integration". Under a current topic, the event connects representatives from politics, ministries, authorities, associations and companies with scientists from the IWH and its partner institutions. The opening speech is given by a prominent politician. After scientific lectures and discussions, a panel discussion concludes the one-day conference. The event is designed for the dissemination of IWH's research findings among political decision-makers and administrative professionals. There is also media coverage.

Veranstaltung
06
Mar 2024

10:00 - 17:00

Public events

Eine CO2-neutrale Zukunft: Wie kann das funktionieren?

Sven Giegold, Professor Reint E. Gropp, Ph.D., Dr. Anika Noack, Juniorprofessorin Huyen Nguyen, Ph.D., Professor Dr. Mario Ragwitz, Julia S. Schlenz, Dr. Christoph Schult und Uwe Zischkale
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Projects

FLEXPANELDID: Stata module to perform causal analysis of treatments with varying start dates and durations

Download the toolbox

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flexpaneldid: A Stata Toolbox for Causal Analysis with Varying Treatment Time and Duration

Eva Dettmann Alexander Giebler Antje Weyh

in: IWH Discussion Papers, No. 3, 2020

Abstract

The paper presents a modification of the matching and difference-in-differences approach of Heckman et al. (1998) for the staggered treatment adoption design and a Stata tool that implements the approach. This flexible conditional difference-in-differences approach is particularly useful for causal analysis of treatments with varying start dates and varying treatment durations. Introducing more flexibility enables the user to consider individual treatment periods for the treated observations and thus circumventing problems arising in canonical difference-in-differences approaches. The open-source flexpaneldid toolbox for Stata implements the developed approach and allows comprehensive robustness checks and quality tests. The core of the paper gives comprehensive examples to explain the use of the commands and its options on the basis of a publicly accessible data set.

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09.2019 ‐ 09.2022

Establishing Evidence-based Evaluation Methods for Subsidy Programmes in Germany (EVA-KULT)

European Regional Development Fund (ERDF)

The project aims at expanding the Centre for Evidence-based Policy Advice at the Halle Institute for Economic Research (IWH-CEP).

see project's webpage

PD Dr Mirko Titze

Publications

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Transposition Frictions, Banking Union, and Integrated Financial Markets in Europe

Michael Koetter Thomas Krause Lena Tonzer

in: G20 Insights Policy Brief, Policy Area "Financial Resilience", 2017

Abstract

In response to the financial crisis of 2007/2008, policymakers implemented comprehensive changes concerning the regulation and supervision of banks. Many of those changes, including Basel III or the directives pertaining to the Single Rulebook in the European Union (EU), are agreed upon at the supranational level, which constitutes a key step towards harmonized regulation and supervision in an integrated European financial market. However, the success of these reforms depends on the uniform and timely implementation at the national level. Avoiding strategic delays to implement EU regulation into national laws should thus constitute a main target of the G20.

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International Banking and Cross-border Effects of Regulation: Lessons from Germany

Jana Ohls Markus Pramor Lena Tonzer

in: International Journal of Central Banking, Supplement 1, March 2017

Abstract

We analyze the inward and outward transmission of regulatory changes through German banks’ (international) loan portfolio. Overall, our results provide evidence for international spillovers of prudential instruments. These spillovers are, however, quite heterogeneous between types of banks and can only be observed for some instruments. For instance, domestic affiliates of foreign-owned global banks reduce their loan growth to the German economy in response to a tightening of sector-specific capital buffers, local reserve requirements, and loan-to-value ratios in their home country. Furthermore, from the point of view of foreign countries, tightening reserve requirements is effective in reducing lending inflows from German banks. Finally, we find that business and financial cycles matter for lending decisions.

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Assessing the Effects of Regulatory Bank Levies

Claudia M. Buch Lena Tonzer Benjamin Weigert

in: VOX CEPR's Policy Portal, 2017

Abstract

In response to the Global Crisis, governments have implemented restructuring and resolution regimes backed by funds financed by bank levies. Bank levies aim to internalise system risk externalities and to provide funding for bank recovery and resolution. This column explores bank levy design by considering the German and European cases. The discussion points to the importance of structured policy evaluations to determine the effects of levies.

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Complexity and Bank Risk During the Financial Crisis

Thomas Krause Talina Sondershaus Lena Tonzer

in: Economics Letters, January 2017

Abstract

We construct a novel dataset to measure banks’ complexity and relate it to banks’ riskiness. The sample covers stock listed Euro area banks from 2007 to 2014. Bank stability is significantly affected by complexity, whereas the direction of the effect differs across complexity measures.

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State Aid and Guarantees in Europe

Reint E. Gropp Lena Tonzer

in: T. Beck, B. Casu (eds): The Palgrave Handbook of European Banking, London, 2016

Abstract

During the recent financial crisis, governments massively intervened in the banking sector by providing liquidity assistance and capital support to banks in distress. This helped stabilize the financial system in the short run. However, public bailouts also bear the risk of longer-term distortions, for example, by affecting bailout expectations of banks. In this chapter, the authors first provide an overview of state aid interventions during the recent crisis episode. The third section then analyzes the effects of state aid on financial stability from a theoretical view. This is followed by the description of results obtained from empirical studies. The link between the provision of state aid and politics is discussed in the section “Institutional Design and Policy Implications”. Finally, in the section “The European Banking Union” the authors describe the elements of the European Banking Union meant to resolve and restructure banks in distress and to lower the need for public intervention. Based on the preceding analysis, conclusions are drawn regarding the new design.

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Taxing Banks: An Evaluation of the German Bank Levy

Claudia M. Buch Björn Hilberg Lena Tonzer

in: Journal of Banking and Finance, November 2016

Abstract

Bank distress can have severe negative consequences for the stability of the financial system. Regimes for the restructuring and resolution of banks, financed by bank levies, aim at reducing these costs. This paper evaluates the German bank levy, which has been implemented since 2011. Our analysis offers three main insights. First, revenues raised through the levy were lower than expected. Second, the bulk of the payments were contributed by large commercial banks and by the central institutions of savings banks and credit unions. Third, for those banks, which were affected by the levy, we find evidence for a reduction in lending and higher deposit rates.

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The Importance of Localized Related Variety for International Diversification of Corporate Technology

Eva Dettmann Iciar Dominguez Lacasa Jutta Günther Björn Jindra

in: Regional Studies, No. 10, 2016

Abstract

Internationalization of research and development has increased substantially in recent years. This paper analyses the determinants of spatial distribution of foreign technological activities across 96 regions in Germany. It identifies foreign technological activities by applying the cross-border ownership concept to patent applications. The main proposition is that regions with higher related variety of technological activities between sectors attract more foreign technological activities. The estimations show that this is the case in regions characterized by a high overall technological strength. This suggests that related variety facilitates technological diversifications of foreign corporations in regions at the top of the geographic hierarchy.

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Identifying the Effects of Place-based Policies – Causal Evidence from Germany

Matthias Brachert Eva Dettmann Mirko Titze

in: IWH Discussion Papers, No. 18, 2016

Abstract

The German government provides discretionary investment grants to structurally weak regions to reduce regional disparities. We use a regression discontinuity design that exploits an exogenous discrete jump in the probability of receiving investment grants to identify the causal effects of the investment grant on regional outcomes. We find positive effects for regional gross value-added and productivity growth, but no effects for employment and gross wage growth.

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Die Analyse kausaler Effekte wirtschaftspolitischer Maßnahmen – Das Zentrum für evidenzbasierte Politikberatung am IWH (IWH-CEP)

Matthias Brachert Eva Dettmann Mirko Titze

in: Wirtschaft im Wandel, No. 5, 2015

Abstract

In Deutschland besteht ein enormer Bedarf an evidenzbasierter Politikberatung. Viele wirtschaftspolitische Interventionen werden bislang nicht umfassend evaluiert, und falls doch, wenden die wenigsten Untersuchungen geeignete Verfahren der Kausalanalyse an, um einen ursächlichen Zusammenhang zwischen der Intervention und dem Erreichen von wirtschaftspolitischen Zielen zu identifizieren. Das Leibniz-Institut für Wirtschaftsforschung Halle hat für diese Aufgabe das Zentrum für evidenzbasierte Politikberatung (IWH-CEP) eingerichtet. Eine Pilotstudie zu den Wirkungen der betrieblichen Investitionsförderung ist bereits angelaufen.

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Determinants of Foreign Technological Activity in German Regions – A Count Model Analysis of Transnational Patents

Eva Dettmann Iciar Dominguez Lacasa Jutta Günther Björn Jindra

in: Foresight-Russia, No. 1, 2014

Abstract

Most research on R&D internationalisation focuses on comparative analysis of location factors at the national level of analysis. Very little work, however, has taken place in this field for the sub-national regional location behavior of multi-national enterprises (MNE). The paper contributes to the existing research by providing evidence on the determinants of foreign technological activities at the sub-national level for Germany, which hosts the largest share of foreign R&D within the EU27 and features the highest cross-regional dispersion of patented research. Using a pooled count data model, we estimate the effect of various sources for externalities on the extent of foreign technological activity across regions. Particular attention is paid to the role of local knowledge spillovers, technological specialization and diversification. We differentiate foreign and domestic sources of specialisation and account for region and sector-specific influences. This is the first time that the ‘cross-border-ownership’ principle to measure R&D internationalisation is combined with regionalised patent information. To verify our findings we develop hypotheses. In particular, we expect and find that foreign technological activity is attracted by technologically specialised sectors of regions. In contrast to current empirical work, this effect applies both to foreign as well as domestic sources of specialization, although effects on foreign specialization seem more significant. We expect and find the same for science-industry spillovers. We postulate a negative impact of domestic specialization on foreign technological activities and a strong positive effect from diversificationspillovers, by comparison with specialisation spillovers, but these hypotheses are rejected. We find that the direction of the specialisation effect depends on dominance in the position of domestic firms as well as on the balance of knowledge flows between them and foreign actors.

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