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Institution Transfers, The Marshall Plan, Europe, and Ukraine: An Analytical Narrative

Author

Listed:
  • Atin Basuchoudhary

    (Virginia Military Institute)

  • Andreas Freytag

    (Friedrich Schiller University, Jena; and University of Stellenbosch, and CESifo Research Network, and STIAS)

  • Troy Siemers

    (Virginia Military Institute)

Abstract

This paper offers an analytical narrative based on an assurance game with two separate populations in an evolutionary setting. In our model, Donors and Recipients are two populations; let us call them Europe and Ukraine. The donor population has two types. A proportion of this population wants to promote a Marshall Plan-type model for the recipient state, and another prefers isolationism. A proportion of the population of the recipient state also intends to coordinate a Marshall Plan-type economic integration. In contrast, others prefer foreign aid but view further integration as a violation of sovereignty (or, with Ukraine, may be afraid of further Russian attacks from this integration). Marshall plan type coordination provides the highest payoffs through, e.g., the peace dividend, better institutions in Ukraine, widened European integration trade links, or global financial integration. Coordination is costly because it requires substantial institutional change on both sides. We use simulations to track outcomes given that European support for Ukraine and Ukrainian desire for aid may be endogenous. Further, we show how these endogenous outcomes respond to political shocks in Europe that affect European support for Ukraine and implicitly the lack of support for Ukraine.

Suggested Citation

  • Atin Basuchoudhary & Andreas Freytag & Troy Siemers, 2023. "Institution Transfers, The Marshall Plan, Europe, and Ukraine: An Analytical Narrative," Jena Economics Research Papers 2023-017, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2023-017
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    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2023_017.pdf
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    References listed on IDEAS

    as
    1. Joop Age Harm Adema & Yvonne Giesing & Tetyana Panchenko & Panu Poutvaara, 2023. "The Role of the Diaspora for the Recovery of Ukraine," EconPol Forum, CESifo, vol. 24(02), pages 41-45, March.
    2. Anders Åslund, 2023. "How to Reconstruct Ukraine," EconPol Forum, CESifo, vol. 24(02), pages 16-19, March.
    3. Christopher A. Hartwell & Dmytro Boyarchuk, 2023. "What Should Be the Economic Priorities in Post-war Ukraine?," EconPol Forum, CESifo, vol. 24(02), pages 25-29, March.
    4. Barry Eichengreen, 2023. "Economic Recovery in Post-World War II West Germany and Ukraine Today," EconPol Forum, CESifo, vol. 24(02), pages 30-35, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Institutional Transfer; Institutional Coordination; Evolutionary Game Theory; Ukraine War; Foreign Aid;
    All these keywords.

    JEL classification:

    • P41 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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