Impact case study database

Research galvanises support for new national legislation on victim support

There are an estimated 130,000 modern slavery victims in the UK (Global Slavery Index, 2018). In 2019 and 2020, 18,213 of these victims entered the National Referral Mechanism (NRM)—the Government’s framework for identifying potential victims, referring them to support, and making a “Conclusive Grounds” (CG) decision on whether they definitely experienced modern slavery (Home Office Statistical Bulletins, 2019, 2020). In 2019, 75% of NRM referrals were of victims who originated from source countries outside the UK, including Albania, Bangladesh, Eritrea, India, and Vietnam (Home Office Statistical Bulletin, 2019).

In June 2018, Nicholson attended an event chaired by Lord McColl of Dulwich about legislation he was sponsoring: the Modern Slavery (Victim Support) Bill, which would change the situation where the UK Government provided modern slavery victims in England and Wales with only 45 days of recovery support. Instead, the Bill’s provision would give victims a guaranteed right to support for at least 12 months and the right to remain in the UK. Research by Nicholson and Schwarz ( 3a- 3d) had shown the importance of post-enslavement support for long-term recovery by survivors. They believed a full cost benefit analysis (CBA) of the Bill could help its passage, and offered this to Lord McColl ( 5a).

The aim of their CBA research was to establish the cost and potential financial benefit of providing enhanced support (including appropriate accommodation, medical treatment, legal advice, translation and interpretation) for one year for all adult victims in England and Wales. Nicholson drew on her understanding of modern slavery survivors’ definitions of slavery and freedom ( 3a) and of the impact of support services on survivor wellbeing ( 3c), to define the gather new data from service providers and set the CBA’s criteria for indirect benefits (for example, preventing homelessness and re-trafficking). Schwarz used her research into States’ obligations ( 3d) to provide an international legal foundation for victim support, and her research with Nicholson into modern slavery’s defining characteristics ( 3b) to provide a CBA framework for the requirements and outcomes of appropriate support. Launched in Parliament in July 2019, the CBA report ( 3e) made the case for comprehensive, longer-term victim support by demonstrating that the Bill’s provisions would bring a net financial benefit of up to GBP 25,100,000 a year. It argued that providing longer-term support would prevent re-exploitation and reduce costs to the UK Treasury.

The team’s research ( 3e) helped Lord McColl gain cross-party Parliamentary support for the Bill. Responding to the CBA at its launch, Lord McColl commended the “thorough analysis to my colleagues in Parliament, to policy-makers and Government Ministers and encourage[d] them to consider increasing the support for all victims of modern slavery with utmost urgency” ( 5b). Terming it in one Parliamentary speech a “revealing cost-benefit analysis,” Lord McColl used the team’s research repeatedly to gain support for his Bill, including in speeches in the House of Lords of September 9, October 7, and October 21, 2019 ( 5b). An MP also used the CBA in the House of Commons on September 30, 2019 to galvanise support for Lord McColl's Bill, citing the CBA report’s “staggering” estimates, and another member of the House of Lords used it in Parliamentary speeches on September 7 and October 6, 2020 to reiterate that Lord McColl's Bill would save money and was a “win-win for the Government” ( 5b).

The Bill passed all stages in the Lords in 2019. Parliament was dissolved before a Second Reading in the Commons, Lord McColl reintroduced the bill in 2020, and its progress was delayed by a Parliamentary focus on Brexit and Covid-19. Expressing hope about its imminent passage, he explained that “the study has been essential in persuading my colleagues to support the Bill”: the CBA was “ highly influential on the progress of the Bill, ensuring that concerns that the proposals would be too costly were unfounded, and proving that increased survivor support would have the opposite effect…of providing indirect economic and social benefits that outweighed the costs” ( 5a). The UK Independent Anti-Slavery Commissioner highlighted the CBA report in her “Strategic Plan” for 2019-21 to explain why she would now encourage more data-driven research ( 5c). In a report the Commissioner’s Office also praised the research team’s “initiative” in recognizing that “a CBA could complement the moral impetus of the Bill by making the case that passing the Bill would be fiscally shrewd” ( 5d).

Research helps to change government policy on victim care time-limits

While Lord McColl moved his Bill through Parliament, the research team used the CBA analysis in another way to transform how the UK Government supports modern slavery victims. As they finalised the CBA report for publication in April 2019, the team was contacted by Duncan Lewis Solicitors who were representing two modern slavery victims in a judicial review claim: NN & LP v Secretary of State for the Home Department [SSHD]. One of the NGOs that provided data for the CBA had told Duncan Lewis about the research team’s work. Duncan Lewis’ landmark case challenged the Home Office’s National Referral Mechanism (NRM) policy that limited victim support to 45 days. Duncan Lewis was arguing for needs-based support but the Home Office was defending the 45-day limit by arguing that needs-based support was unaffordable ( 5e).

Duncan Lewis requested early access to the findings of the research team’s CBA research, explaining “it would be very useful to be able to demonstrate that…providing ongoing support as per victims’ needs at this point would cost the taxpayer less in the long term” ( 5e). The research team made its findings ( 3e) available to Duncan Lewis and also provided a lengthy witness statement that drew from the CBA report and cited the research team’s other outputs ( 3a, 3c). As Duncan Lewis confirmed, “they devoted as much time as necessary to discussing the research with [us]” ( 5d). The witness statement was submitted as what Duncan Lewis termed “very helpful” evidence in the judicial review ( 5e). Duncan Lewis explained: “The University of Nottingham’s work was extremely useful to us in demonstrating that the direct financial benefits of support outweighed the costs, and highlighted the importance of providing ongoing support to victims on a needs basis to avoid destitution, homelessness, and chronic mental health conditions” ( 5e).

This judicial review process changed UK Government policy. Upon receipt of the evidence, the Home Office settled the challenge; conceded that the 45-day policy is incompatible with the European Convention on Action against Trafficking in Human Beings and that support should be provided in reference to an individual’s needs rather than by any reference to how long the individual had been supported; and agreed to introduce a needs-based system ( 5e, 5f). In September 2019, the Home Office published a new policy, the Recovery Needs Assessment (RNA), the guidance for which explains that support will not be restricted by time-limits, instead each RNA must include “a tailored transition plan…with the aim of ensuring that…services continue…until the victim has no such ongoing recovery needs” ( 5g). The RNA policy was added to the new Government Modern Slavery Victim Care Contract (MSVCC), awarded in 2020 at a value of GBP 281,000,000 for five years ( 5g), therefore giving longevity to the new longer-term support policy; and was included in the UK Government's Statutory Guidance on modern slavery, produced in accordance with Section 49 of the UK's Modern Slavery Act, therefore giving the policy a legal authority: “Following a positive Conclusive Grounds decision victims will be exited from MSVCC [Modern Slavery Victim Care Contract] support only when appropriate to do so....The point at which a victim will be exited from MSVCC support will be determined through a Recovery Needs Assessment” ( 5g).

Thousands of modern slavery victims now have access to extended recovery support upon application as a result of the judicial review. An estimated 9060 confirmed victims of modern slavery can now apply for RNA support as of October 2020. Based on historical data on the number of victims entering the NRM each year (e.g. 10,627 in 2019), thousands more will enter the NRM in 2021 and beyond, receive positive CG decisions (confirmation that the UK Government considers their case to be modern slavery, and be eligible for RNA support. Of these 9060 potential applicants to date, an estimated 8245 would successfully access support and therefore benefit from the new RNA policy. This calculation includes the following factors:

• Home Office Statistical Bulletins for 2019 and 2020 show that a total of 10,627 people entered the NRM in 2019 and 7,586 people in the first three quarters of 2020 (NRM statistics are not yet available for the last quarter of 2020);

• It is reasonable to include all NRM referrals for 2019 (including the first three quarters, before the introduction of the RNA policy in September 2019) as there are long delays in giving CG decisions (an average of 452 days in 2019);

• Research by Nicholson and Schwarz has shown that an average of 45.5% of NRM referrals result in a positive CG decision ( 3e);

• Although anyone with a positive CG decision since the introduction of the NRM in 2009 can request support with a RNA (not only those who enter the NRM after the introduction of the RNA policy), it is most likely that RNA applicants will be people who entered the NRM in 2019 and 2020, plus people who, as of late 2019, still have CG decisions pending from earlier years;

• The RNA policy applies only to adult victims (not children) and only to victims in England and Wales (not Scotland and Northern Ireland);

• UK Government figures (for September 2019-June 2020) show that 91% of RNA requests are being granted support ( 5h).

By November 8, 2020, the Single Competent Authority (SCA)—which confirms whether an individual is a modern slavery victim—had already processed 1141 RNA applications for extended support ( 5h). Of these, UK Government figures suggest that around 1030 (91%) will have been granted ( 5h). This means that, because of the judicial review—to which the introduction of the RNA was a response ( 5f)— over 1000 survivors to date have received extended care. And without the research team’s contribution, this judicial review would not have been successful: thanking the research team, Duncan Lewis noted that its work had “been invaluable and we could not have reached this result without you” ( 5e).

As research by Nicholson and Schwarz has shown ( 3a, 3c- 3e), extended victim support prevents re-enslavement and ensures long-term recovery. The leading NGO Hope for Justice, which identifies and supports modern slavery victims in the UK, confirmed the impact of the research team’s work for individuals: “All the survivors that we work with have suffered exploitation and the majority experience trauma….Safety and stability are fundamental…to enable them to overcome their experiences” ( 5i). Before the change in policy, victims “were faced with the ‘cliff edge’ of support finishing” ( 5i). Then “ NN & LP v SSHD led to the introduction of the RNA policy” and the “acceptance by the Home Office that ongoing support is assessed by need and not time” ( 5i). The NGO sees the judicial review result as a “good step forward to ensuring victim care,” as the RNA policy “guarantees a consideration for every victim of slavery of their further support needs” ( 5i). The NGO also considers “ NN & LP to be a helpful authority for legal challenges around the support provided to victims” and explained that “Hope for Justice has relied on this case to advocate for the extension and reinstatement of support under the NRM” ( 5i). For example, the NGO worked with a victim who had migrated to the UK, was destitute upon exiting the NRM, and was denied welfare support. Hope for Justice challenged this denial by requesting a reinstatement of NRM support “on the basis of the principles outlined in NN & LP” ( 5i). This was accepted. The victim received subsistence—ensuring “that a gap in...support was successfully avoided”—because of the use of NN & LP to argue for support “in line with his individual needs” ( 5i).

Duncan Lewis credited the research team with having “made a lasting positive contribution to the situation for some of the weakest and most vulnerable members of society” ( 5e). In a report of July 2020 ( 5d), the Anti-Slavery Commissioner’s Office featured this work by Nicholson and Schwarz as a key case study of “research that had impact”: one of only nine examples (from a 97-item literature review and 56 interviews) of research that “successfully bridged the gap between [researchers and stakeholders] to achieve impact” ( 5d). Noting that the research team aimed to achieve “more robust support for individuals,” the Commissioner’s report concluded: “It is safe to say that these motivations were satisfied” ( 5d).

Research helps to change government policy on victims’ right to work

In April 2020, Duncan Lewis approached Nicholson and Schwarz for help with a new judicial review case, HYL v SSHD, that challenged the Home Office’s blanket deferral of decisions on whether to grant discretionary leave to remain (DLR) to modern slavery victims until after the determination of an asylum claim. This left asylum-seeking modern slavery victims in limbo, unable to work. As Duncan Lewis explained in a letter, this policy “unjustifiably discriminated against victims of trafficking who also claimed asylum” ( 5e).

Nicholson and Schwarz used the methodology of their original CBA ( 3e), combined its findings with more recent immigration, asylum and NRM data, and determined the financial implications of providing DLR to confirmed modern slavery victims who were awaiting an asylum decision. This research, shared in a full witness statement for Duncan Lewis in June 2020 that also used the team’s earlier work ( 3b, 3d, 3e), found that granting DLR to asylum-seeking modern slavery victims would bring a direct benefit to the public purse exceeding the costs incurred. It would reduce the costs of supporting individuals who were unemployed, prevent re-exploitation, and improve mental health, stability and social integration. Duncan Lewis submitted the witness statement as part of the judicial review case, which, again, changed UK Government policy. In September 2020, the Home Office conceded that the blanket ‘scheduling rule’ was unlawfully applied and agreed to publish amended guidance ( 5j). In October 2020, the published guidance said it is appropriate to consider granting DLR in advance of an asylum claim consideration ( 5e). As a result, an estimated 965 asylum-seeking modern slavery victims annually ( 5e)—based on 2019 numbers—can have their DLR applications assessed earlier and potentially seek work while awaiting asylum decisions.

Duncan Lewis explained the team’s research was “ extremely useful to us in demonstrating that the direct financial benefits [of DLR] outweighed the costs, and highlighted the importance of granting [DLR] during the period in which confirmed victims are awaiting an asylum decision and the benefits of granting such leave to the recovery and reintegration of confirmed victims” ( 5e). The law firm added that for both judicial reviews, it was “very grateful” to the research team for sharing data and “taking the time to discuss their findings with us and draft witness statements for these cases in a very narrow time frame” ( 5e).

Hope for Justice explained the impact of this second judicial review case for individual modern slavery victims. The NGO’s team members “regularly witness the negative impact of survivors being left in limbo with regards to their immigration status….we have regularly seen cases where immigration status prevents victims of modern slavery from accessing the services they need to recover….survivors who are seeking asylum in the UK [experience] the difficulties of long delays in determining asylum claims and the inability to move forward in the meantime” ( 5i). The NGO believes that by ensuring that “conclusively identified victims of slavery will be considered for discretionary leave to remain prior to determinations of their asylum claim,” the successful judicial review will enable victims to “have access to employment and mainstream accommodation and welfare assistance, which are often vital for long-term recovery,” concluding: “the decision will have a positive impact for asylum seeking victims” ( 5i).

The collaborative research led by Drs Riaño and Defever started at the University of Nottingham and has generated impact in two main ways:

Informing the evidence base used by the World Bank to improve the technical assistance and development financing that contribute to the Dominican Republic’s sustainable development

Between 2015 and 2016, Dr Riaño and co-authors worked closely with the World Bank to inform them and key stakeholders of the findings in R3, which drew on the analytical and quantitative frameworks developed in R1 and R2. This included extensive discussions and presentations with different government entities such as the Ministry of Economy, the Ministry of Industry and the Central Bank of the Dominican Republic as well as the executive board of the National Council of Free Trade Zones. The research in [R3] and policy debate it produced was first used by the World Bank in its report [R4] on the role special economic zones (SEZ) should play to support a more inclusive economic growth model in the Dominican Republic. As attested by the World Bank “The implications of the findings of Dr Riaño’s report [R3] are widespread, with significant economic impact. They were incorporated into a World Bank report published in November 2016 about the role SEZ should play to support a more inclusive economy growth model.” [B]

World Bank Group staff in close consultation with national authorities and other stakeholders prepare Systematic Country Diagnostic reports, which incorporate a diagnostic exercise to identify key challenges and opportunities for a country to accelerate progress towards development objectives that are consistent with the goals of ending absolute poverty and boosting shared prosperity in a sustainable manner.

Following the 2016 report, the collaborative research [R3] and subsequently [R4] directly informed the Systematic Country Diagnostic for the Dominican Republic published in June 2018 [A], as corroborated by a World Bank representative. “ The Systematic Country Diagnostic prepared by the World Bank Group staff in close collaboration with the Dominican Authorities and other stakeholders published in June 2018 also incorporated the main results from the work undertook by Dr Riaño and co-authors” [B]

The Systematic Country Diagnostic [A] states -- based on the findings in [R3] and [R4] and forcefully corroborated in supportive statement [B] -- that the generous tax incentives provided in SEZ have created an uneven playing field which has hampered the competitiveness of local firms, hindered the development of linkages between exporters and domestic firms and put a strain on public finances. Both a lack of inclusive growth among Dominican firms and the country’s inability to generate enough tax revenues were flagged as key challenges for the Dominican Republic to become a high-income country by 2030.

The fact that the impact of tax incentives provided to SEZ was identified as having a direct effect on the growth and sustainability prospects of the Dominican Republic in the diagnostic will directly shape the World Bank’s provision of technical assistance and lending operations, including Development Policy Financing (DPF). DPF is the main financing instrument offered by the World Bank, which accounted for USD7,100,000,000 of worldwide commitments in 2018. Its purpose is to help countries achieve sustainable development through a program of policy and institutional actions by providing non-earmarked general budget financing that is subject to the borrowing country’s implementation process. In order for the Dominican Republic to gain access to DPF directed towards private sector development initiatives – particularly those oriented to strengthen linkages with global value chains – it needs to provide concrete evidence to the World Bank Group’s board about its efforts to address the challenges raised in the diagnostic about its SEZ programme. Therefore, as [B] notes “ … the work led by Dr Riaño is considered critical in potentially guiding policy reforms” in the Dominican Republic. This collaborative research [R1 – R4] has therefore not only benefited officials at the World Bank in informing their economic policy making with Government officials, but will also have a longer-term economic impact for businesses, employees and taxpayers in the Dominican Republic.

Reforming export subsidies in Nepal to increase their effectiveness in reducing the country’s trade deficit and fostering export diversification

Since 2012, there has been a spirited debate between the government and business stakeholders about the extent of support needed by Nepalese exporters to successfully compete in world markets and the form that this support should take. In 2016, [R5] was commissioned by Nepal’s National Planning Commission (NPC) to the Trade and Competitiveness practice at the World Bank as an input to evaluate the effectiveness and prospects of reform of the Cash Incentive Scheme on Exports (CISE) subsidy program – a pivotal instrument of export promotion in Nepal. The NPC is the Government’s apex policy advisory body, chaired by the Prime Minister. Members and Vice-Chairs are ranked on par with Vice Ministers.

The government of Nepal concludes that CISE is fulfilling its objectives, based on the research findings that firms that received the subsidy began to export more products and to reach new foreign markets [R5]. The research [R5] also documents that both Bangladesh and India use export subsidies targeting specific products and destination markets, which are substantially more generous in terms of their subsidy rates than those provided by CISE. (Bangladesh offers ad-valorem subsidy rates as high as 30% on products like jute while India offers subsidies ranging from 2 to 5% to exports of more than 100 products.)

The former Vice-Chair for the National Planning Commission of Nepal, acknowledged the research findings [R5] and that the CISE subsidies had not been sufficiently high enough to encourage businesses to increase the scale of their exports. The Vice-Chair used the research [R5] to advocate for reforming the CISE subsidy program to increase its effectiveness as stated below: “While I was in Government, I advocated sharpening the incentives offered by CISE based on the findings of the evaluation carried out by Dr Riaño and colleagues. The Ministry of Finance has since increased the subsidy rates offered by the CISE program to improve the program’s effectiveness in raising exports and narrowing the trade deficit. [D].”

The former Commerce Secretary of Nepal who oversaw the implementation of the CISE scheme, highlighted that the work conducted by Dr Riaño and co-authors [R5]

“has been a crucial point of reference providing inputs to this debate (about the effectiveness of the CISE scheme)” and that “The recommendations made by Dr. Riano and co-authors to increase the level of cash incentives to increase their competitiveness by offsetting the higher cost of production and transit transportation was quite notable [E] ”.

In addition, the limited impact of the subsidy on export sales identified in [R5] has been used by exporters to put pressure on the government to increase the level of cash incentives to make them competitive by offsetting the high costs of production and transportation they face in a landlocked country. The President of the Nepal Pashmina Industries Association, stated *“the incentive was very low compared to what neighbouring countries were giving to their traders.*[F]” The former Commerce Secretary noted that the research [R5] has “helped to increase interaction and deliberations between industry and the government in order to boost competitiveness [E]”.

In response, the Finance Minister raised the subsidy rate offered by the CISE scheme from 1 and 2% to an increase of 5% in the 2018/19 budget speech of May 2018. Businesses have welcomed the new provision, which has identified 26 exportable items that are eligible to receive the new cash incentives. The government’s spokesperson from the Ministry of Finance said the new provision is expected to check the country’s widening trade deficit. “ It could also help the country earn more foreign currency at a time when the country is facing increasing pressure on its balance of payment due to excessive rise in import bills,” adding that the Ministry has selected the goods based on their export statistics in the past few years. [G]

The direct beneficiaries of the research were Central Bank policymakers in Ghana, Uganda and Zambia, and the World Bank in Zambia. The research addressed concerns of Ministry of Finance officials on macroeconomic policy (see [C]) and of operational and research staff in the African Development Bank, the International Monetary Fund and the World Bank. The CREDIT researchers engaged with local officials throughout the research to ensure their priorities were addressed.

In 2016, Professor Morrissey was contacted by the World Bank Chief Economist in Lusaka (Zambia) ‘ on account of his expertise in the field’ [A]. After years of falling copper prices, by 2015 Zambia faced a macroeconomic crisis with a collapse in the exchange rate, a balance of payments deficit and rising inflation. There was disagreement between the Bank of Zambia (BoZ) and the local World Bank office on the appropriate policy response. Morrissey was invited to conduct research, which he did with Roger (then a PhD student). The analysis [6] suggested a lower pass-through from the exchange rate to consumer prices than the studies the BoZ based its decisions on and recommended greater emphasis on monetary policy instruments rather than the exchange rate to constrain inflation. The research was discussed with policymakers through seminars in 2017 at the BoZ and the World Bank office in Lusaka [A] and a World Bank Policy Research Paper [B] that ‘ was used in discussions and cited in other World Bank publications’ [A]. The World Bank Chief Economist in Lusaka was informed by the research in co-authoring the 2017 Zambia Economic Brief in which the research is cited ([F], p13 Box 1), while the research is cited regarding the costs imposed on firms by the high interest rates required to stabilize the exchange rate and get inflation under control in the World Bank 2018 Zambia Systematic Country Diagnostic ([G], p91). A revised and updated version of [B] was published as [6].

To engage Central Bank officials in the design of the research for ESRC-DFID Grant ES/N013344/1 on aid and the exchange rate Morrissey visited the Banks of Kenya, Tanzania and Uganda in May 2017. These meetings were to determine the policy issues of interest in each country, especially areas in which external validation of policy is valued. The meetings also provided access to existing research in each Central Bank and, importantly for the analysis, discussion of how aid is measured and reported (and other data issues) with statisticians in the Central Bank. Aid transpired to be peripheral to concerns at the time in Kenya and Tanzania (both are nevertheless included in [4]), so the country focus shifted to Uganda.

The Bank of Uganda (BoU) was particularly interested and Morrissey visited again in April 2018, presenting results showing that aid inflows had been managed in Uganda to ensure macroeconomic stability and avoid Dutch Disease effects. From this and other engagement the BoU Executive Director of Research and Policy noted the research showed ‘ that aid inflows are now managed well in a manner that is consistent with exchange rate stability and supports budget planning’ and thanked Morrissey ‘for the contribution to the macroeconomic policy discussions in Uganda’ [C]. Uganda was anticipating future oil production at that time and ‘ Ugandan policy makers were particularly interested in knowing the macroeconomic implications of Uganda switching from a net oil importer to a net oil exporter’ [C]. This prompted Morrissey to undertake research on the effect of becoming an oil exporter, studying the case of Ghana and deriving implications for Uganda [8].

Morrissey visited Uganda in November 2019 to present results from the work on macroeconomic effects of oil [8] to policy experts from the BoU, the Ministries of Finance and of Energy, and the Petroleum Investment Advisory Committee. Morrissey provided the BoU with a framework it could adapt to analyse the effects of oil shocks on the economy. As the BoU confirmed, Morrissey’s research ‘ contributed to policy discussions on oil in two important respects’, affirming ‘ macroeconomic management ability’ that ‘ BoU inflation targeting is effective in managing the effects of oil price shocks’ and informing policymakers on how the revenues from oil should be managed [C] . This gave the BoU ‘ confidence to manage’ the effects of oil price shocks (given performance as an oil importer) and to use the revenue generated from oil [C]. The Covid-19 pandemic has obviously altered current priorities and discussion of oil production is on hold in Uganda at the moment.

Morrissey and Morozumi had planned a visit to Bank of Ghana (BoG) in April 2020 to present and discuss the research but due to Covid 19 instead two webinars were presented: Morrissey presented [8] on 23/10/20 and Morozumi presented [5] and [7] on 30/10/20. The webinars attracted over ‘ 90 policymakers from the region, including staff from BoG, the Ministry of Finance, local IMF office, the West African Monetary Institute, UN Economic Commission for Africa and the University of Ghana’ [E]. The BoG webinar series has the aim of presenting analytical research on topical issues to generate discussion and support policy analysis and BoG considers the presentations to be an important element of their communication [D].

The first webinar discussed the macroeconomic management implications of Ghana becoming an exporter of oil after 2010. As [8] used monthly data over 2001 to 2019 to estimate the response to oil shocks as an importer and as an exporter the discussion was able to address how the impact of oil price shocks changed. When Ghana was an importer, oil price shocks generated exchange rate appreciation and mild inflation, but interest rate reductions could be used to offset adverse impacts. The analysis of managing price volatility since becoming an exporter (although refined petroleum is still imported) showed how inflation targeting in conjunction with improved macroeconomic monitoring by BoG could mitigate the effects of oil price shocks. This informed policy analysis, as observed by the Director of the BoG Research Department: ‘ Understanding the macroeconomic effects of switching from an oil importer to an oil exporter is very important to BoG since it has implications for monetary policy implementation’ [D]. The research [8] showed that the analytical results are consistent with predictions from the macroeconomic model developed and providing the structure and applications of a tested macroeconomic model for Ghana will support the capacity of ‘ BoG staff engaged in developing DSGE models for policy analysis in Ghana’ [D].

The second webinar discussed how inflation targeting could be improved. Cross-country analysis [7] shows that inflation targeting has been ineffective in reducing inflation in low-income countries and that relatively low de facto Central Bank independence (so that fiscal concerns and government spending needs dominate monetary policy), associated with weak restrictions limiting Central Bank lending to the government, helps explain the result. This emphasis on the presence of fiscally driven inflationary pressure as a possible failure of inflation targeting is observed in Ghana [5]. The key policy implication, relevant for Central Bank operations in SSA, is that effective inflation targeting requires not only ensuring a proper monetary policy response to inflation shocks, but also developing institutions which provide legal Central Bank independence with a de facto bite; only in the absence of inflationary pressure of a fiscal origin can inflation targeting help reduce inflation rates [7]. The research ([5], [7]) informed and supported efforts by the BoG to manage inflation: the Director of the BoG Research Department praised Morrissey and Morozumi’s ‘contribution to the macroeconomic policy discourse in Ghana’ that ‘shed light [with] empirical evidence’, noting that the research will ‘contribute greatly to the ongoing policy dialogue about the need to end fiscal dominance in Ghana’, and ‘inspire further work’ in Ghana to ‘improve the inflation targeting monetary framework’ [D]. Morrissey and Morozumi have established a relationship and intend to continue research with staff in the Bank of Ghana.