BOOK PROJECT
CHASING THE SUN: THE POLITICAL ECONOMY OF SOLAR INVESTMENT IN THE GLOBAL SOUTH
How do developing countries attract and sustain solar energy investment? The energy transition demands both urgent renewables scale-up and long-term policy-making to maintain its momentum, since renewable energy growth leads to backlash from incumbent interests. I argue that developing countries face a trade-off between fast-paced renewable energy scale-up in the short-term, and building pro-renewable political coalitions in the long-term. On one hand, experienced foreign investors contribute to quick solar build out with large scale projects, but due to their outside options for investment locations, do not participate in domestic renewable energy policy-making. On the other hand, domestic firms are slow to scale solar, but form the bedrock of domestic political coalitions that lobby for long-term renewables policy. I utilize original cross-national firm-level data on solar energy investment to illustrate this trade-off between short-term solar scale up and building long-term renewable energy coalitions. First, I show that countries with a high share of foreign investment in solar achieve a faster increase in solar generation relative to countries with more domestic investors. However, countries with a higher share of domestic investment adopt more renewable energy policies, which lay the foundations for long-term energy transition. Interviews with over 50 domestic and foreign investors across Panamá, Colombia, and Malaysia elucidate the mechanisms behind foreign versus domestic firms’ political participation. Foreign firms have outside options for future investment and little experience with domestic lobbying, so they choose exit. Domestic firms, on the other hand, are constrained to their home country but are embedded in social and economic networks, which amplifies voice. As a result, foreign investors choose to leave in the face of renewable energy opposition, while domestic firms lobby for the long-term. In sum, while foreign investment may result in faster-paced solar growth in the short term, it is slow and steady domestic investment that paves the way for long-term structural transformation.
WORKING PAPERS
Ishana Ratan, Johnathan J. Guy. Does Democracy FiT? The Politics of Renewable Energy Policy Reconsidered. Presented at APSA 2022. (Available upon request)
Feed-in Tariff (FiT) policies have catalyzed the majority of global renewable energy deployment, raising questions about the political causes of their enactment and implementation. Influential research suggests political incumbents in democracies have greater incentive to adopt FiT policies than those in autocracies. In this paper we revisit this theory using a new and expanded dataset which includes more recent years, as well as more granular data on policy enactment and implementation. Our replication analysis complicates the claim that democracies adopt FiTs at higher rates than autocracies: The number of authoritarian governments adopting FiTs has dramatically increased over the past decade, while many democratic governments have repealed or abandoned their FiT policies. Further, outside of rich countries, we find weak to nonexistent support for three mechanisms proposed for the democratic hypothesis: Environmental public goods, rural bias, and progressive redistribution. Democratic publics often do not value the particular bundle of environmental goods and bads presented by renewable energy over conventional sources, FiT policies often do not reward redistribution. Our results suggest the uptake of the FiT follows different political logics in high vs. low income countries. Further, the effects of policy are not homogenous among adopters, and distributional benefits may depend on factors beyond incumbent governments’ political objectives. The results also urge caution regarding the claim that decentralized renewable energy production will contribute to more democratic political futures.
Ishana Ratan, Alison E. Post, Tanu Kumar, Mridang Sheth. When do Local Governments Adopt New Technology? Agency Size and Bureaucratic Champions for Open Transit Data. Presented at APSA 2022.
When do local governments adopt new citizen-facing technology to improve public service delivery? Much existing work predicts that governments facing greater competition will be more likely to reform. In contrast, we develop a bureaucracy-driven account of technology adoption arguing that the actions of agencies are constrained by their size, resources, and employee motivations. We compare empirical support for both perspectives by examining variation in the adoption and use of online scheduling information for public transit (GTFS), a transformative technology that makes transit far easier for riders to use. In California, we find that city and county-controlled transit agencies adopted GTFS later than special districts less exposed to political competition, and that large agencies where internal champions faced fewer technical and resource constraints outpaced smaller ones. Interview and survey evidence provide support for the mechanisms underpinning our theory. These results underscore the importance of studying bureaucratic drivers of technology and policy adoption more broadly.
Ishana Ratan. Does Manufacturing Matter? Foreign investment and local linkages in the Malaysian solar industry. Presented at MPSA 2023; APSA 2023 (Available upon request)
The US-China trade war created new opportunities for developing countries to attract foreign investment in solar manufacturing, which was historically concentrated in the United States, Germany, and China. To avoid United States and European Union tariffs on solar panel imports, China has moved solar panel manufacturing abroad to Malaysia, Vietnam, Thailand and Cambodia. Renewable energy technology presents an important opportunity for developing countries seeking to both decarbonize and level up in global value chains, and industrial policy historically places significant emphasis on manufacturing as the foundation of domestic industrial upgrading. But does this manufacturing relocation create local linkages for countries that receive FDI? This paper evaluates how and why renewable energy manufacturing struggles to create local linkages, most importantly, for local solar installation. Drawing upon bilateral solar panel trade data, interviews with local Malaysian firms, and descriptive evidence regarding spatial patterns in local solar installation, I find that Chinese production relocation had no effect on local solar installation nor significant impacts on backwards linkages to suppliers. Rather, Chinese panels manufactured in Malaysia are destined for export to Western countries, because Chinese manufacturers in Malaysia profit more from exporting to the United States rather than selling to locals. Instead, Malaysian solar project owners actually import panels from mainland China. The only local linkage lies in the direct employment of locals among the manufacturing facilities themselves. This calls into question existing industrial policy scholarship that emphasizes the localization of production for downstream market growth and indicates that escalating global trade tensions can lead to inefficient externalities that do little to benefit local markets via technology transfer.
WORK IN PROGRESS
Ishana Ratan. Pathways to Power: Institutional Similarities and Foreign Investment in the Global Solar Industry. (Available upon request)
Ishana Ratan, Jonathan Guy and Anthony Calacino. When the River Runs Dry: The Political Economy of Hydropower Retrenchment. Presented at APSA 2023.
POLICY REPORTS:
Alison E. Post, Ishana Ratan, Mary C. Hill, Amy Huang, Kenichi Soga, Bingyu Zhao. “Benchmarking “Smart City” Technology Adoption in California: An Innovative Web Platform for Exploring New Data and Tracking Adoption.” 2022. Research Report. Institute for Transportation Studies, U.C. Berkeley.
Amy Huang, Alison E. Post, Ishana Ratan, Mary C. Hill, Bingyu Zhao. “Where are Private “Smart City” Transportation Technologies Concentrated in California?.” 2022. Policy Brief. Institute for Transportation Studies, U.C. Berkeley.
ISHANA RATAN 