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401. Institutional Change in Industrial Relations: Coordination and Common Knowledge in Ireland, Italy and Australia

Author:
Pepper D. Culpepper
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
When should we ever expect to see durable moves toward greater wage bargaining coordination? Moving to sustained coordinated wage bargaining presupposes that unions and employers can both be convinced that wage bargaining is in fact a game in which both actors prefer coordination. This can only happen when these social actors come to accept as true an idea of the economy in which their coordination through wage bargaining institutions will give them better outcomes than would bargaining through decentralized institutions. This paper argues that the process of developing common knowledge changes institutional preferences among employers. It was the development of common knowledge that changed employer preferences about the attractiveness of institutions for wage coordination in Ireland in Italy. In both cases, the development of common expectations required the emergence and joint ratification of a common set of references, in what I call common knowledge events. These events led organized employers to change their previous position about acceptable institutions of wage bargaining. This change made possible the institutionalization of coordinated wage bargaining in both countries. As demonstrated through counterfactual analysis of the Australian case, the emergence and ratification of such a common view is the necessary condition for the emergence and survival of coordinated wage bargaining institutions.
Topic:
Development and Economics
Political Geography:
Europe, Australia/Pacific, and Ireland

402. How European Integration Impacts on National Legislatures: The Europeanization of The German Bundestag

Author:
Annette Elisabeth Töller
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
In looking at the Europeanization of the German Bundestag, the paper brings together two different debates: the well-established debate on the democratic legitimacy of the European Union sees national Parliaments as guarantor of one branch of a “dual” legitimacy. The more recent debate on “Europeanization” addresses the impacts that European integration has had on its Member States. Analyzing the Europeanization of the German Bundestag, the paper identifies and analyzes three dimensions: legislative Europeanization – the extent to which legislative decision making by the German Bundestag has been influenced by European stipulations over the last twenty years; institutional Europeanization – how the Bundestag as an institution reacted to this loss of function by establishing institutional and procedural provisions for influencing the government's Euro-politics; and strategic Europeanization – the ways in which individual MPs started more recently to develop euro-political strategies that go beyond controlling the national government. The paper shows that the Bundestag only hesitantly reacted to the increasing loss of function s through legislative Europeanization by establishing effective institutional and procedural provisions for controlling the government's Euro-political activities. What is more, the establishment of institutions does not guarantee their effective use. All in all, Euro- politics continues to remain the activity of few MPs. These few, however, have more recently started to europeanize their strategies. The empirical findings support the claim that the traditional concept of chains of legitimacy is inadequate, both in conceptual and in empirical terms. With regard to the democratic legitimacy of EU governance, this indicates that, apart from major reform projects, especially with regard to everyday legislation, not too great a burden should be placed on national Parliaments.
Topic:
International Relations and Economics
Political Geography:
Europe

403. Skill formation in Britain and Germany: Recent developments in the context of traditional differences

Author:
Steffen Hillmert
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper proposes a comparison of skill formation in Germany and Britain over the last decades. Taking historical trends into account, the two cases can be regarded as representing different types of skill production regimes. Institutional features include a relatively low degree of standardization of training and a larger amount of on-the-job training in Britain. In Germany, post-compulsory training has been conducted predominantly within the dual system of vocational training, underlining the vocational specificity of a large part of the labor market. As a consequence, international differences in individual skill investments, transitions from school to work and other life-course patterns can be observed. At least in Britain, however, the situation seems to have changed considerably during the 1990s. The paper argues that the divergence in more recent developments can still be understood as an expression of historical path dependency given the traditional connections between the post-compulsory training system and the broader societal context in which it is embedded. These concern, in particular, links with the system of general and academic education as the basis for – and also a possible competitor with – vocational training; links with the labor market as they are indicated by specific skill requirements and returns to qualifications; and, links with the order of social stratification in the form of the selective acquisition and the social consequences of these qualifications. The links manifest themselves as typical individual-level consequences and decisions. Founded on the basis of these distinctions, the aim of this paper is to investigate the preceding conditions for recent developments in the qualification systems of Britain and Germany, which have adapted to specific challenges during the last decades.
Topic:
Development and Economics
Political Geography:
United Kingdom, Europe, and Germany

404. ¿Integración por la puerta trasera? La incursión del Tribunal de Justicia de las Comunidades Europeas en materia tributaria

Author:
Antonio Cubero and Loreno Ruano
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
To what extent do member states control the process of European integration? This question has traditionally confronted Intergovernmentalists with Neo-functionalists and Institutionalists of various sorts. This paper provides evidence that supports the second school of thought and refines its theoretical claims with a case study: the European Court of Justice's jurisprudence on direct taxation. This is a 'hard case', because in this sector, the member states' resistance to the expansion of Community competence has been particularly virulent. It will be shown how, inspite of this, the Court's jurisprudence has ventured in the field of taxation to the point of undermining the principle upon which rest all national fiscal systems (the distinction between residents and non-residents), putting under severe strain the coherence of national tributary systems. The Court's jurisprudence have also had effects on issues pertaining exclusively to national taxation, through the principle of 'inverted non-discrimination'.
Topic:
International Relations, Economics, and Government
Political Geography:
Europe

405. The access of business interests to European Union institutions: notes towards a theory

Author:
Rainer Eising
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
The unequal access of interest organizations to the EU institutions is often associated with biased European politics. Nonetheless, systematic accounts of interest group access are rare. Rooted in the organizational theory of resource dependencies and drawing on a survey of 800 EU and national business associations, the article presents a broad conception of European political exchange to explain the contact patterns. Ordinal regressions indicate that three dimensions shape these patterns–organizational characteristics, sectoral-economic features, and national modes of interest intermediation. Nonetheless, EU interest intermediation displays only very few general traits–these are the division of labor among EU and national associations, the economic clout, the financial resources and the expertise of interest groups as well as their political mobilization when they face of EU regulation. Else, the interaction patterns vary along the EU institutions and their levels of decision-making underscoring the importance of the institutional opportunity structure.
Topic:
Development, Economics, and Politics
Political Geography:
Europe

406. Conjunctural Causation in Comparative Case-Oriented Research: Exploring the Scope Conditions of Rationalist and Institutionalist Causal Mechanisms

Author:
Jonathan P. Aus
Publication Date:
11-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
This paper highlights one of the major benefits of qualitative comparative methodology as applied within a "small-N" research design, namely its potential use for specifying the scope conditions of (theoretically competing) causal mechanisms. It is argued that the identification of set-theoretic relationships, multiple paths, and analytic efforts in typological mapping can make valuable contributions to the elaboration and further development of middle-range theory.
Topic:
Development, Economics, and International Cooperation
Political Geography:
Europe

407. Making and Breaking the Rules: French policy on EU "gouvernement économique" and the Stability and Growth Pact

Author:
David J. Howarth
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
The failure of the Raffarin Government to respect the Stability and Growth Pact (Stability Pact, SP), its call for the Pact's reconceptualisation, reform of the management of the Euro-zone's monetary policy and EU-level reflation should be seen not as a significant change in French policy on 'gouvernement économique' (that is, EU-level economic governance (GE) but as a reassertion of long standing but contradictory French preferences. French policy-makers have been caught in a dilemma with regard to the construction of the Economic dimension of EMU between two strong preferences: on the one hand the supranational consequences of a dirigiste approach to macro-economic policy and, on the other hand, a Gaullist reflex to retain sovereignty as much as possible and to insist upon intergovernmentalism in EU-level macroeconomic policy-making. The 'price stability' function of GE as embodied by the Maastricht Treaty rules on convergence and the SP has been consistently marginalized in the discourse of French governments of both the Right and Left. Rather EG has been presented in five overlapping ways which can all be seen in terms of the paradox of the French pursuit of both reinforced macroeconomic policy coordination at the EU level yet also national margin of manoeuvre through intergovernmental policy making. Crucially, this paradox also explains the lack of clarity and inconsistency in French pronouncements on GE. Most elements of the 2002 Commission and Ecofin SP reform proposals and the precise elements of the Pact reform finally agreed in March 2005 met with French approval given that they render the SP more flexible allowing greater margin of manoeuvre in the development and implementation of the Broad Economic Policy Guidelines (BEPG) and the application of the Excessive Deficit Procedure (EDP), thus better meeting French intergovernmentalist preferences on EG but undermining the coordination of national macroeconomic policies that could contribute to an effective policy mix with the ECB's monetary policy.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
Europe

408. Economic Integration, EU-US Trade Conflicts and WTO Dispute Settlement

Author:
Fritz Breuss
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
Since its inception in 1995, more than 330 disputes have been raised under the WTO Dispute Settlement System. The major players in world trade–the EU and the USA–are also the busiest users of this instrument. After looking at links between economic integration and WTO involvement and a survey of the actual transatlantic WTO trade disputes, the welfare implications of the four most prominent trade disputes between the EU and the USA ("mini trade wars") are analyzed with GTAP5: the Hormones, the Bananas, the FSC and the Steel cases. The economic analysis reveals that the level of suspension of concessions hardly coincides with the level of nullification or impairment (expressed in lost trade effects) if one considers the overall welfare implications of retaliation with tariffs. The idea of "rebalancing" retaliation is a myth. Tariffs are a very bad instrument of retaliation. Maybe a mechanism of direct transfers or financial compensation would be better.
Topic:
Economics, International Trade and Finance, and World Trade Organization
Political Geography:
United States and Europe

409. No Exit from the Joint Decision Trap? Can German Federalism Reform Itself?

Author:
Fritz W. Scharpf
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
European Research Papers Archive
Abstract:
Germany's unique institutions of a 'unitary federal state', long considered part of the country's post-war success story, are now generally perceived as a 'joint decision trap' impeding effective policy responses to new economic and demographic challenges at both levels of government. Nevertheless, a high powered bi-cameral Commission set up in Autumn 2003 failed to reach agreement on constitutional reforms. The paper analyses the misguided procedural and substantive choices that explain the failure of reform, and it discusses the possibility of asymmetric constitutional solutions that might enhance the capacity for autonomous action at both levels.
Topic:
Conflict Resolution, Demographics, and Economics
Political Geography:
Europe and Germany

410. Investment-Specific and Multifactor Productivity in Multi-Sector Open Economies: Data and Analysis

Author:
Luca Guerrieri, Dale W. Henderson, and Jinill Kim
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In the last half of the 1990s, labor productivity growth rose in the U.S. and fell almost everywhere in Europe. We document changes in both capital deepening and multifactor productivity (MFP) growth in both the information and communication technology (ICT) and non-ICT sectors. We view MFP growth in the ICT sector as investment-specific productivity (ISP) growth. We perform simulations suggested by the data using a two-country DGE model with traded and nontraded goods. For ISP, we consider level increases and persistent growth rate increases that are symmetric across countries and allow for costs of adjusting capital-labor ratios that are higher in one country because of structural differences. ISP increases generate investment booms unless adjustment costs are too high. For MFP, we consider persistent growth rate shocks that are asymmetric. When such MFP shocks affect only traded goods (as often assumed), movements in 'international' variables are qualitatively similar to those in the data. However, when they also affect nontraded goods (as suggested by the data), movements in some of the variables are not. To obtain plausible results for the growth rate shocks, it is necessary to assume slow recognition.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States and Europe

411. The Norwegian Import Regime for Agriculture

Author:
Arne Melchior
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
Norway maintains one of the highest levels of protection for agriculture in the OECD, but the tariff structure is not so transparent due to the extensive use of specific tariffs, i.e. tariffs expressed in NOK/kg or the like. In this paper, we use world market prices and Norwegian import prices to calculate ad valorem equivalents of specific tariffs. This shows that 28% of the tariff lines in agriculture are above 100%, and 10% are above 300%. The average of MFN applied tariffs is in the range 73-103%, depending on the calculation method. Protection is somewhat lower (54-74%) for goods exported by developing countries. While the Least Developed Countries have zero tariffs, other developing countries obtain 10-15% tariff reductions under the GSP system of tariff preferences. Tariff rate quotas provide some increase in market access. Protection of grains and feedstuff raises the forage costs in agriculture, and especially feedstuffs are important in the exports of developing countries.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
Europe and Norway

412. Trade and development - a selective review

Author:
Per Botlof Maurseth
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This paper reviews parts of the recent literature on trade and growth. The relationships between trade and growth have been extensively studied in recent research. Many studies indicate that trade stimulates income and growth. The literature is controversial and many studies are criticised for weaknesses in methodology. Despite the methodological controversies, most evidence gives support for the view that trade stimulates growth. It is argued that major deficiency in the literature is that it does not discriminate between the impact of market access in other countries and the impact of liberal domestic trade policies.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe

413. GSP in the 'spaghetti bowl' of trade preferences

Author:
Arne Melchior
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper examines the relative position of GSP (tariff preferences for developing countries) compared to ordinary tariffs and free trade agreements in Norway, the EU and the USA. On average, ordinary GSP gives a tariff rebate of less than 50% in all countries. “Extended” GSP, given to the Least Developed Countries (LDCs) and others, implies zero tariffs in Norway and the EU, but only partial liberalisation in the USA. EU provides extended GSP for 119 countries, while the USA does so for 76 and Norway for 52. Considering the shares of trade rather than the number of countries, extended GSP covers 5% or less of total trade in all cases, and ordinary GSP is much more important. Compared to tariffs in free trade agreements, ordinary GSP is inferior in the USA and the EU, but not too far behind in Norway. This is due to recent cuts in MFN tariffs as well as improvements in the GSP system of Norway. For manufacturing, Norway has low tariffs and a generous GSP system. This is however not the case for agriculture.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
United States, Europe, and Norway

414. The German ICT industry: Spatial Employment and Innovation Patterns

Author:
Björn Frank and Per Botolf Maurseth
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This paper documents recent developments in German ICT industries. In particular we report results on spatial patterns in innovation and employment in these industries. The paper is motivated by previous studies that have found that ICT industries seem to cluster geographically and having spatially clustered growth rates. In this study, we discriminate between production of ICT devices and production of ICT services. In Germany, production of ICT devices is concentrated in clusters of innovating regions (in terms of patents). ICT service production, on the other hand, is concentrated in larger urban areas. Growth rates in ICT-related employment show different spatial patterns. The data show that negative spatial effects are present for several sectors, which might give support for the so-called backwash effect described by Gunnar Myrdal (1957). For other sectors, positive spatial spillover effects may be present. For overall economic development (in terms of gross regional product per habitant) we find weak positive growth effects ICT, but these growth effects stem more from innovation than from production or use of ICT.
Topic:
Economics, Human Welfare, and Industrial Policy
Political Geography:
Europe and Germany

415. Collective Bargaining Practices in Eastern Europe: Case Study Evidence from Romania

Author:
Aurora Trif
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
There are several studies on recent developments in collective bargaining in Eastern Europe, but there is still a debate about the extent to which collective bargaining practices resemble those in continental Western Europe. This paper aims to contribute to this debate, by examining primary data on collective bargaining practices in Romania using an actor-centred institutionalist approach. It focuses on collective bargaining in four large chemical companies. Comparisons are made to other countries in order to highlight the developments in Romanian cases. Unexpectedly, the study's findings point to an increase in state intervention in establishing the terms and conditions of employment after 1989, due to the state’s new roles during the transformation process that affected job security. The study suggests a considerable increase in the influence of top managers in determining pay and working conditions, while trade unions retained the considerable influence over social benefits in large companies. The findings show continuance of certain pre-1989 practices, such as a persistence of high state intervention and a limited independence of the trade unions from the management. This paper contributes to a deeper understanding of institutional changes in the context of a shift from a centrally planned economy to a market-based economy.
Topic:
Economics, Markets, and Political Economy
Political Geography:
Europe, Eastern Europe, and Romania

416. No Exit from the Joint Decision Trap? Can German Federalism Reform Itself?

Author:
Fritz W. Scharpf
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The unique institutions that make up Germany's "unitary federal state," long considered part of the country's post-war success story, are now generally perceived as a "joint-decision trap" impeding effective policy responses to new economic and demographic challenges at both levels of government. Nevertheless, a high-powered bicameral Commission set up in the fall of 2003 failed to reach agreement on constitutional reforms. The paper analyzes the misguided procedural and substantive choices that led to this failure, and it discusses the possibility of asymmetric constitutional solutions that might enhance the capacity for autonomous action at both levels.
Topic:
Economics, Government, and Political Economy
Political Geography:
Europe and Germany

417. Strategic Unionism in Eastern Europe: The Case of Romania

Author:
Aurora Trif and Karl Koch
Publication Date:
07-2005
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The shift from centrally planned economies to market-oriented economic models presented trade unions in Eastern European countries with crucial choices in relation to their roles as industrial relations actors. This paper investigates whether (and why) unions have chosen adversarial and/or co-operative relationships with the employers, based on a strategic choice conceptual framework. It focuses on trade union relations with employers at national, sectoral and company levels in Romania. It is argued that adversarial and co-operative relations between unions and employers developed simultaneously after 1989, but co-operation was the prevalent approach. Evidence suggests that ideological legacies, former institutions and the initial decision to participate in the macroeconomic transformation played a key role in shaping unions' choices towards co-operation with employers. Although this paper confirms the widespread view that labour is rather weak in Eastern Europe, it indicates that unions can be proactive and shape their own future if they have the capacity to mobilise their members and union leaders have the skills and willingness to use both conflict and co-operation in their relationships with employers. The comparison of evidence from Romania with other Eastern European countries reflects on the stage of Romanian transformation and also illustrates a wider possible applicability of the theoretical framework employed for the study.
Topic:
Economics, Industrial Policy, and Political Economy
Political Geography:
Europe, Eastern Europe, and Romania

418. Economic Reform and the Political Economy of the German Welfare State

Author:
Wolfgang Streeck and Christine Trampusch
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The key to economic reform in Germany is a significant reduction in the high costs of labour.The main factor driving up German labour costs is the funding of the extensive German welfare state through social insurance contributions that in effect operate like payroll taxes on employment. The paper discusses the political causes of the rise in non-wage labour costs since the 1970s. It then proceeds to show how a variety of opportunities for political blockade in the German political economy dim the prospect for effective reform in the foreseeable future.
Topic:
Economics, Industrial Policy, and Political Economy
Political Geography:
Europe and Germany

419. Does Financial Openness Promote Economic Integration? Some Evidence from Europe and the CIS

Author:
Fabrizio Carmignani and Abdur Chowdhury
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We study whether financial openness facilitates the economic integration of formerly centrally planned economies with the EU- 15. Two dimensions of economic integration are considered: cross-country convergence of per-capita incomes and bilateral trade in goods and services. We find that more financially open economies effectively catch-up faster and trade more with the EU-15. These integration-enhancing effects occur over and above any effect stemming from domestic financial deepening and other factors determining growth and trade.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe

420. The Effects of (within and with EU) Regional Integration: Impact on Real Effective Exchange Rate Volatility, Institutional Quality and Growth for MENA Countries

Author:
Iftekhar Hasan and Leonardo Becchetti
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We analyse two potential effects arising from regional (and with EU) integration—increased quality of institutions (including the quality of financial institutions) and, economic policies and reduced multilateral exchange rate volatility— in a conditional convergence growth framework for MENA countries. To this purpose we outline an ad hoc methodology which implements the traditional bilateral exchange rate measures to test effects of multilateral exchange rate volatility on growth of per capita GDP. Our estimates show that both factors (quality of institutions and reduction of multilateral volatility) significantly and positively affect growth and conditional convergence. We observe that MENA countries are not far from EU and OECD countries in terms of exchange rate volatility, but much below in terms of institutional quality. We finally simulate the potential effects of an improvement in institutional quality in MENA countries on their process of growth and conditional convergence. We conclude arguing that regional integration may be highly beneficial for such countries, mainly because of its effects on institutional quality.
Topic:
Development, Economics, and Regional Cooperation
Political Geography:
Europe

421. Modelling the Effects of Trade Policy Scenarios on Multifunctionality in Greek Agriculture: A Social Accounting Matrix Approach

Author:
Dimitris Psaltopoulos and Eudokia Balamou
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper presents a Social Accounting Matrix (SAM) model for conducting an assessment on the potential impacts of trade agreements on several multifunctionality indicators in Greek agriculture. More specifically, two SAM models were constructed, one for Greece and one for local economy of Archanes (Crete), an agriculturally dependent NUTS IV area, which has demonstrated a noticeable record in terms of the implementation of Pillar 2 policies. Along these lines, five alternative scenarios were specified with regards to anticipated EU policy reactions under different future outcomes of the Doha round negotiations. In broad terms these scenarios range from a status quo (2003 CAP reform) hypothesis to full decoupling, taking also into account the possibility of further reductions in domestic (EU) support as well as developments on Pillar 2 funding. Results suggest that under the scenarios examined, the effects of policy reform upon multifunctionality indicators are rather mixed and surely not extremely worrying. Effects of the status quo scenarios seem to be optimistic in terms of projected economy-wide output and employment at both national and regional level. On the other hand, Scenario 1(bis) generates negative results in terms of farm output and employment (for Archanes), land-use abandonment projections are marginal at the national and rather moderate at the regional level, while environmental repercussions are negative at the national level. The regional analysis has also shown that the impacts of Scenarios 2, 2b and 3 are rather worrying in terms of all categories of projections, with the exception of “Total Output”. Taking account of the specification of Scenario 3, this finding generates rather justified reservations on the “ability” of Pillar 2 policies to ameliorate for economic activity contraction caused by a decrease in Pillar 1 support in Archanes economy.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
Europe

422. Evaluating the Impact of Alternative Policy Scenarios on Multifunctionality: A Case Study of Finland

Author:
Heikki Lehtonen, Jussi Lankoski, and Jyrki Niemi
Publication Date:
07-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper provides first results of the sector-model approach to analysing the effects of alternative policy scenarios on the multifunctional role of Finnish agriculture. In terms of environmental non-commodity outputs, this study focuses on nutrient runoffs, landscape diversity and biodiversity. As regards other non-commodity outputs, the paper considers rural socio-economic viability. The results suggest that, on the whole, reform of the common agricultural policy is not likely to result in any drastic decline of agricultural production in Finland. The amount of green fallow will increase considerably when agricultural support payments are decoupled from production, and as a result the remaining cultivated agricultural land will become biologically richer. The agricultural labour force is likely to decrease substantially irrespective of agricultural policy. The study concludes that the credibility of the production economics and biological relationships of the economic model determine the validity of the results of the many indicators examined. Further, the economic logic of microeconomic simulation models provides a consistent assessment of the many aspects of multifunctionality.
Topic:
Agriculture, Economics, and Environment
Political Geography:
Europe and Finland

423. Economic Effects of Free Trade between the EU and Russia

Author:
Pekka Sulamaa and Mika Widgrén
Publication Date:
05-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This study simulates the economic effects of eastern enlargement of the EU and an EU-Russian free trade area. The main emphasis of the paper is on the effect this would have on the Russian economy. The simulations were carried out with a GTAP computable general equilibrium model, using the most recent GTAP database 6.0 beta, which takes the former Europe agreements between the EU-15 and the eight new Central and Eastern European member states into account. The results confirm the earlier findings that a free trade agreement with the EU is beneficial for Russia in terms of total output but not necessarily in terms of economic welfare when measured by equivalent variation. The main reason behind this is the deterioration that would occur in Russia's terms of trade. Improved productivity in Russia would, however, make the free trade agreement with the EU advantageous.
Topic:
Economics and International Trade and Finance
Political Geography:
Russia, Europe, and Asia

424. Is the European Economy a Patient and the Union its Doctor? On Jobs and Growth in Europe

Author:
Sjef Ederveen, Albert van der Hoorst, and Paul Tang
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
A stronger focus on jobs and growth is part of an effort to renew the Lisbon strategy. Yet the view that economic expansion contributes to maintaining Lisbon's other goals of social cohesion as well as the environment is somewhat optimistic. First, there are structural trade-offs among the central elements of the Lisbon strategy. Escaping these trade-offs temporarily is sometimes possible but requires policy changes. Second, higher productivity (growth) may not provide more structural room for governments to manoeuvre. It leads to higher tax receipts but also to higher public expenditures since public sector wages and social security benefits are linked to productivity. In contrast, more employment (jobs) is associated with a smaller public sector. But to engineer the increase in employment, changes in welfare state arrangements are needed. In other words, focussing solely on the sick child will probably harm the other children.
Topic:
Security, Development, Economics, and Human Welfare
Political Geography:
Europe and Lisbon

425. Speed of Convergence and Relocation: New EU Member Countries Catching up with the Old

Author:
Kari E. O. Alho, Ville Kaitili, and Mike Widgrén
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Economic convergence of the EU's new member countries (NMCs) towards the incumbent EU countries (EU-15) is of paramount importance for both partners, not only in terms of real income but also in nominal terms. In this study we build a dynamic, computable general equilibrium model, starting from the Balassa-Samuelson two-sector framework, then modify and enlarge it (with, among other things, endogenous capital formation, consumption behaviour and labour mobility) to address several other issues such as uncertainty, welfare and sustainability in terms of foreign indebtedness. At the same time we make flows of foreign direct investment (FDI) endogenous in order to evaluate the impact convergence has on the EU-15 and the inter action between the two regions through FDI. We find that in a general equilibrium setting, fears of adverse effects resulting from a relocation of EU-15 manufacturing to the NMCs are not well founded.
Topic:
International Relations, Development, Economics, and Foreign Direct Investment
Political Geography:
Europe

426. Financial Consequences of Widowhood in Europe: Cross-Country and Gender Differences

Author:
Namkee Ahn
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
We document in this paper the financial consequences of widowhood using both cross-section and panel data from the European Community Household Panel. The research reveals that there are large differences across countries. For example, widowed persons in Greece and Portugal have the lowest income – less than a half that of those widowed in Austria. Cross-country differences decrease somewhat if we consider household income net of housing costs, owing to the higher share of home ownership in low-income countries. Further, the income reduction upon widowhood is generally larger for widows than it is for widowers. The difference in income between the genders is largest in Denmark, Spain, Austria and Finland, where widower s enjoy an income that is more than 30% higher that of widows. The main culprit of the differences in income between widows and widowers lies in pension regulations. As today's elderly women an d those approaching old age spent their working years in an era where women worked at home, raised children and did not participate in the labour market, many depend mostly on survivorship pensions as their main source of income. Yet in most countries this kind of pension tends to be much lower than the applicable old-age pension, owing to the prevailing pension laws. Consequently, the financial situation of widows is unlikely to improve in the medium term unless pension regulations change.
Topic:
International Relations, Demographics, and Economics
Political Geography:
Europe, Finland, Greece, Denmark, and Spain

427. A Gravity Model under Monopolistic Competition

Author:
Kari E. O. Alho
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper presents an alternative derivation of the gravity equation for foreign trade, which is explicitly based on monopolistic competition in the export markets and which is more general than previously seen in the literature. In contrast with the usual specification, our model allows for the realistic assumption of asymmetry in mutual trade flows. The model is estimated for trade in Europe, producing evidence that trade flows and barriers do indeed reveal strong asymmetry. We then carry out a simulation, based on the estimated model, of the general equilibrium effects (through trade) of the UK's possible entrance into the economic and monetary union.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United Kingdom and Europe

428. WTO Agricultural Negotiations: A Comparison of the Harbinson Proposal and the Swiss Formula

Author:
Martina Brockmeier, Marianne Kurzweil, Janine Pelikan, and Petra Salamon
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The WTO agricultural negotiations of the Doha round are a key issue in the public debate. This paper analyses the effects of different options to improve market-access on the basis of a GTAP model, comparing the impact of the Harbinson proposal and the Swiss formula on trade balances. An extended version of the GTAP model is used to first project a base run that includes factors arising from Agenda 2000, EU enlargement, the EBA agreement and the EU's mid-term review. The policy simulation run additionally includes the WTO negotiations. Here, the model is differentiated between three experiments. While the first experiment simply implements the Harbinson proposal, the second one additionally takes into account an adoption of the EBA agreement by all industrialised countries. In the third experiment, the tariff cuts are based on the Swiss formula using a coefficient of 33 instead of the tiered approach of the Harbinson proposal.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

429. Multilateral Market-Access Reforms of the Doha Round: A Preliminary Assessment of Implications for EU Agricultural Trade

Author:
Wusheng Yu and Hans G. Jensen
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The July package of the Doha Round of trade negotiations stipulates that a tiered-formula approach should be used to significantly reduce market access barriers across countries, implying that the EU would have to make larger cuts to its high external tariffs, in comparison with many other WTO members such as the US. This paper provides a preliminary assessment of the likely impact of the tiered-formula reform approach on EU agricultural sectors. Numerical simulations of a multilateral market-access reform scenario show that such cuts would lead to across-the-board decreases in intra-EU trade flows, as compared with a baseline projection. While intra-EU trade flows would decrease, the EU's trade with the rest of the world would increase. Yet such increases would not be symmetric – imports into the EU would increase more than exports, resulting in larger external trade deficits or smaller external trade surpluses in many EU agricultural products. Further, the resulting adjustments in member states' production and net trade positions are not equal: the new member states would generally lose part of their export shares in the EU market to external competitors, as highlighted in the cases of bovine meat and dairy products.
Topic:
Economics, Human Welfare, and International Trade and Finance
Political Geography:
United States and Europe

430. Prospects for Regional Free Trade in Asia

Author:
Gary Clyde Hufbauer and Yee Wong
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Frustrated with lackluster momentum in the WTO Doha Round and the Asia Pacific Economic Cooperation (APEC) forum, and mindful of free trade agreement (FTA) networks centered on the United States and Europe, Asian countries have joined the FTA game. By 2005, Asian countries (excluding China) had ratified 14 bilateral and regional FTAs and had negotiated but not implemented another seven. Asian nations are also actively negotiating some 23 bilateral and regional FTAs, many with non-Asian partners, including Australia, Canada, Chile, the European Union, India, and Qatar. China has been particularly active since 2000. It has completed three bilateral FTAs—Thailand in 2003 and Hong Kong and Macao in 2004—and is initiating another 17 bilateral and regional FTAs. However, a regional Asian economic bloc led by China seems distant, even though China accounts for about 30 percent of regional GDP. As in Europe and the Western Hemisphere, many Asian countries are pursuing FTAs with countries outside the region. On present evidence, the FTA process embraced with some enthusiasm in Asia, Europe, and the Western Hemisphere more closely resembles fingers reaching idiosycratically around the globe rather than politico-economic blocs centered respectively on Beijing, Brussels, and Washington.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
United States, China, Europe, Washington, Canada, India, Beijing, Asia, Australia, Qatar, Chile, Hong Kong, Brussels, and Macao

431. Egypt after the Multi-Fiber Arrangement: Global Apparel and Textile Supply Chains as a Route for Industrial Upgrading

Author:
Dan Magder and Dan Magder
Publication Date:
08-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Exporting through international supply chains was a successful way for East Asian countries to develop their textile and apparel industries in the 1970s and 1980s, but it is a less clear route for countries like Egypt trying to compete today. The challenge is particularly acute given the strength of competitors like China, and even more so in the post-MFA era. Some analysts suggest that "lean retailing" increases the importance of geography in exporting in the world of rapidly changing apparel fashion, in a way that could benefit a country like Egypt with its proximity to European end markets. Using a supply chain model, this paper suggests that shortening lead times can indeed have an impact on profits, but that the effect is not tremendous, being in the range of a 0.3 percent to 0.9 percent increase in profits for every week of improvement in lead times. The study also finds that the business environment in Egypt lags key comparator countries in several areas that help the firms compete in global apparel chains, although recent reforms by the Egyptian government are working to address several of these aspects. It concludes by exploring to what extent geography, trade preferences, and local production factors may help Egypt's textile and apparel industry carve out a role for itself in global supply chains, and provide an engine to drive industrial upgrading throughout the country.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Europe, East Asia, North Africa, and Egypt

432. After 'Non' and 'Nee': Plans B, C, and D for the European Constitution

Author:
Daniel Gould
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The proposed European Constitution, which was just voted down in France and the Netherlands, is technically a treaty containing far-reaching amendments to the present set of treaties governing the European Union. Article 48 of the EU treaty text currently in force specifies that any such amendments first be unanimously approved by the governments of the member states within an Inter-Governmental Conference framework and then ratified by each country. The first, intergovernmental step of ratification was completed October 29, 2004.
Topic:
Economics and Government
Political Geography:
Europe, France, and Netherlands

433. Swiss National Bank Sales—Lessons and Experiences

Author:
Philipp M. Hildebrand
Publication Date:
05-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
I am pleased to be in Washington today and would like to thank Fred Bergsten and his colleagues at the Institute for International Economics for providing me with this opportunity to talk about the recently completed gold sales of the Swiss National Bank (SNB).
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
Europe and Washington

434. The Euro and the World Economy

Author:
Fred Bergsten
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The dollar has been the dominant currency of the world economy for almost a century for a single overwhelming reason: It had no competition. No other economy came close to the size of the United States. Hence no currency could acquire the network externalities, economies of scale and scope, and public goods benefits necessary to rival the dollar at the global level. A similar situation for the United Kingdom explains sterling's dominance in the 19th century.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, United Kingdom, and Europe

435. Global Economic Prospects: Slower But Still Solid Growth in 2005; Worries About Growth and Inflation for 2006

Author:
Michael Mussa
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
After surging to the highest growth rate in a generation, world real GDP is set to slow from a rate of just over 5 percent for 2004 to about 4 percent for 2005 and a tad slower for 2006. The economic slowdowns in several important economies in the second half of last year, including much of continental Europe and Japan, already make it clear that year-over-year growth will slow for 2005. But the continued strong growth of domestic demand in other countries, most notably the United States and China, virtually assures that global growth this year will not fall below potential.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Japan, China, Europe, Israel, and East Asia

436. Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!

Author:
Jacob Funk Kirkegaard
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Once again a specter is haunting Europe—not in the shape that Marx saw it but in the form of outsourcing and offshoring, which allegedly will empty Europe of the highly skilled high-paying jobs of the future. This working paper argues that the specter needs to be dispelled. Today, Europe faces challenges in the form of low productivity growth and low labor utilization/high unemployment. Outsourcing and offshoring, far from being a blight, are powerful tools to help solve the productivity growth problem and may also—provided the right structural reforms are implemented—assist in solving Europe's low employment problem.
Topic:
Economics, Government, and Third World
Political Geography:
Europe

437. A Revived Bretton Woods System? Implications for Europe and the United States

Author:
Edwin M. Truman
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This note addresses three topics: (1) Do the recent musings by Dooley, Folkerts-Landau, and Garber (DFG), in particular their argument that the world is operating under a revived Bretton Woods system (BW2), provide a useful framework for thinking about international economic and financial developments and prospects? (2) What does the DFG framework imply for the euro area, and are those implications reasonable? (3) What does the DFG framework imply for the United States, and are those implications reasonable?
Topic:
Development and Economics
Political Geography:
United States and Europe

438. Why Are German Employers Associations Declining? A Challenge to the Conventional Wisdom

Author:
Wolfgang Schroeder and Stephen J. Silvia
Publication Date:
09-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper challenges the conventional explanation for declining density of German employers associations. The dominant account asserts that German trade unions have taken advantage of increased globalization since the 1980s – which has made internationally active enterprises more vulnerable to production disruptions – to extract additional monopoly rents from multinational employers via aggressive collective bargaining. Small firms have responded to the increased union pressures by avoiding member ship employers associations, which has produced the density declines. Data, however, disconfirm the conventional explanation; compensation increases have actually become increasingly smaller over the decades. This paper presents an alternative explanation that is consistent with the data. We argue that it is the large product manufacturers rather than the trade unions that have greatly increased price pressures on parts suppliers, which has led to a disproportionate number of suppliers to quit employers associations. The paper also discusses these findings in light of the “varieties of capitalism” literature. It points out that this literature has depicted national models as too homogeneous. The decision of several German employers associations to offer different classes of membership represents an accentuation of variety within national varieties of capitalism.
Topic:
Civil Society, Economics, and Politics
Political Geography:
Europe

439. The Politics of Budget Consolidation In Britain and Germany: The Impact of Blame-Avoidance Opportunities

Author:
Reimut Zohlnhöfer
Publication Date:
07-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
According to parts of the literature, blame avoidance opportunities, i.e. the necessity and applicability of blame avoidance strategies, may differ among countries according to the respective institutional set-ups and between governing parties according to their programmatic orientation. In countries with many veto actors, a strategy of "Institutional Cooperation" among these actors is expected to diffuse blame sufficiently to render other blame avoidance strategies obsolete. In contrast, governments in Westminster democracies should resort to the more unilateral strategies of presentation, policy design and timing. At the same time, parties of the left are expected to have an easier time implementing spending cuts while right parties are less vulnerable when proposing tax increases. Evidence from the politics of budget consolidation in Britain and Germany does not corroborate these hypotheses. Instead, it seems that party competition conditions the effects institutions and the partisan complexion of governments have on the politics of blame avoidance.
Topic:
International Relations, Economics, and Politics
Political Geography:
Europe

440. Endogenous OCA Theory: Using the Gravity Model to Test Mundell's Intuition

Author:
Hubert P. Janicki, Thierry Warin, and Phanindra Wunnava
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper presents an empirical assessment of the endogenous optimum currency area theory. This study relies on the original intuition developed by Mundell in 1973. The gravity model is used to empirically assess the effectiveness of the convergence criteria by examining location specific advantages that guide multinational investment within the European Union. A fixed effects model based on a panel data of foreign direct investment (FDI) flows within the EU-15 shows that horizontal investment promotes the diffusion of the production process across the national border. Specifically, the examined Maastricht criteria suggest convergence in interest rate, government fiscal policy, and debt play a significant role in attracting multinational investment.
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
Europe

441. Fiscal Perspectives in Europe: Convergence and Debt's Burden

Author:
Thierry Warin
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The paper addresses the question of the fiscal perspectives within the Economic and Monetary Union (EMU). By using a panel data analysis associated with an interpretation in terms of differences instead of levels, the results show a steady convergence of public deficits across the EMU, and that the EMU needs either to comply with the Lisbon agenda, or some kind of a growth strategy, or reduce the interest of the debt in order to regain some fiscal flexibility while abiding by the Stability and Growth Pact (SGP).
Topic:
International Relations, Debt, and Economics
Political Geography:
Europe

442. Campaigning in Poetry, Governing in Prose

Author:
David Coates
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
New Labour's performance in office–as an orchestrator of economic and social change–is situated against, and evaluated by reference to, two sets of legacies: legacies inherited from the years of Conservative political dominance after 1979; and legacies brought to power by New Labour. The paper argues that the first se t of legacies was deep and enduring, and threw a long shadow forward. It argues that the second set of legacies were highly coherent and intellectually informed, but cumulatively involved a diminution in the capacity of the state. The result has been a two-term government that is sufficiently superficially successful to win a third term; but which has yet seriously to transform the legacies it inherited: to our misfortune, and ultimately–in electoral terms–also probably to its own. This paper is based on my study of New Labour's domestic policy–Prolonged Labour: The Slow Birth of New Labour Britain; I have also co-authored a study of New Labour's policy towards Iraq–Blair's War–which was published by Polity Press in 2004.
Topic:
Civil Society, Economics, and Politics
Political Geography:
Europe

443. Still Two Models of Capitalism? Economic Adjustment in Spain

Author:
Sebastián Royo
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The proponents of globalization contend that European countries are now converging on an Anglo-American model of capitalism. Contrary to this prediction, this paper will show that in Spain globalization and EMU have promoted rather than undermined coordination among economic actors. Unable to escape from economic interdependence the Spanish economic actors have developed coordinating capacities at the macro and micro levels to address and resolve tensions between economic interdependence and political sovereignty. In this paper I show that there is at least one more variety than the two–LME and CME–that Hall and Soskice cite and also that it is possible to develop coordination capacities in countries that lack a strong tradition of such capacities. In particular, this paper analyzes the resurgence of national-level social bargaining in Spain in the 1990s. This development was the result of the reorientation of the strategies of the social actors. In a new economic and political context, marked by a process of institutional learning, trade unions have supported social bargaining as a defensive strategy to retake the initiative and influence policy outcomes.
Topic:
Economics, Globalization, and Politics
Political Geography:
Europe

444. The Politics of Institutional Learning and Creation: Bank Crises and Supervision in East Central Europe

Author:
Gerald A. McDermott
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This article examines the political conditions shaping the creation of new institutional capabilities. It analyzes bank sector reforms in the 1990s in three leading postcommunist democracies–Hungary, Poland, and the Czech Republic. It shows how different political approaches to economic transformation can facilitate or hinder the ability of relevant public and private actors to experiment and learn their new roles. With its emphasis on insulating power and rapidly implementing self-enforcing economic incentives, the “depoliticization” approach creates few changes in bank behavior and, indeed, impedes investment in new capabilities at the bank and supervisory levels. The “deliberativ e restructuring” approach fostered innovative, cost-effective monitoring structures for recapitalization, a strong supervisory system, and a stable, expanding bank sector.
Topic:
International Relations, Economics, and Politics
Political Geography:
Europe, Eastern Europe, Poland, and Hungary

445. Western Capital vs. the Russian State: Towards an Explanation of Recent Trends in Russia's Corporate Governance

Author:
Stanislav Markus
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The literature on corporate governance in Russia stresses the abuse of shareholder rights in the face of various asset-diversion tactics by the management. Attributing this fiasco to a number of structural obstacles and the privatization legacy, the orthodox account fails to incorporate–let alone explain–the recent data demonstrating a qualitative improvement of corporate governance in crucial segments of the Russian economy. This paper disaggregates “corporate governance” into specific institutions and examines their quality at the firm level as well as by sector. The data supporting the analysis is drawn from recent studies by the OECD, UBS Warburg, CEFIR, and other organizations. The causal inference presented in this paper critically evaluates the impact of foreign capital on the improved corporate governance in Russia's blue-chip firms. The paper presents two alternative state-centered scenarios to explain the implementation of internationally accepted standards of corporate governance by Russia's big business.
Topic:
Economics, International Trade and Finance, and Politics
Political Geography:
Russia, Europe, and Asia

446. Selling off the "Family Silver": The Politics of Privatization in the OECD 1990-2000

Author:
Reimut Zohlnhöfer and Herbert Obinger
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The 1990s have witnessed unprecedented attempts at privatizing state owned enterprises in virtually all OECD democracies. This contribution analyzes the differences in the privatization proceeds raised by EU and OECD countries between 1990 and 2000. It turns out that privatizations are part of a process of economic liberalization in previously highly regulated economies, as well as a reaction to the fiscal policy challenges imposed by European integration and the globalization of financial markets. In addition, institutional pluralism and union militancy yield significant and negative effects on privatization proceeds. Partisan differences only emerge if economic problems are moderate, while intense economic, particularly fiscal, problems foreclose differing partisan strategies.
Topic:
Economics, Globalization, and Politics
Political Geography:
Europe

447. The Spread of Neoliberalism: U.S. Economic Power and the Diffusion of Market-Oriented Tax Policy

Author:
Duane Swank
Publication Date:
03-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
I offer an explanation for the widespread diffusion of neoliberal tax policies in the developed democracies. Specifically, I argue that the highly visible 1980s market-conforming tax reform in the United States, the late twentieth century's dominant political economy, creates significant incentives for adoption of neoliberal tax policies by decision makers in other polities. As such, I stress a dominant actor model of the diffusion of neoliberalism that is grounded in asymmetric competition for mobile assets and policy learning. However, while the incentives to follow U.S. tax policy are substantial, the relative weight assigned the costs and benefits of reform and, in turn, the pace and degree of neoliberal policy adoption by other nations is fundamentally contingent on features of domestic political and economic environments. I assess these arguments with empirical models of 1981-to-1998 tax rates on capital in sixteen nations. I find that changes in U.S. tax policy influence subsequent reforms in other polities; in the long-term, all nations move toward the U.S. neoliberal tax structure. Analysis also shows, however, that the responsiveness to US tax reforms is notably greater where linkages with U.S. markets are stronger, where domestic economic stress is deeper, and where uncoordinated market institutions are dominant. I conclude with a discussion of the implications of the present analysis for the volume's central questions: are dominant. I conclude with a discussion of the implications of the present analysis for the volume's central questions: of international policy interdependence and domestic political economic forces in shaping policy change?
Topic:
Economics and Politics
Political Geography:
United States and Europe

448. Is Europe Becoming the Most Dynamic Knowledge Economy in the World?

Author:
Daniele Archibugi and Alberto Coco
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The paper discusses the condition and perspective of the European Union in the knowledge economy and the feasibility of the goal given by the European Council at the Summits held in Lisbon (March 2000) and Barcelona (March 2002), that is, to increase European R expenditure up to 3 percent of GDP by 2010. The paper focuses on two aspects: comparative performance with its direct counterparts, in particular the US..; and intra-European distribution of resources and capabilities. A set of technological indicators is presented to show that Europe is still in a consistent delay when compared to Japan and the U.S., especially in R investment and in the generation of innovations. A small convergence occurs in the diffusion of Information and Communication Technologies (ICTs), the sector most directly linked to the concept of the "new economy." In the field of knowledge collaboration, Europe reveals opposing paths in the business and in the academic worlds. Within Europe, the level of investment in scientific and technological activities is so different across countries that it does not merge into a single continental innovation system.
Topic:
International Relations, Economics, and Science and Technology
Political Geography:
Europe and Lisbon

449. The Challenges of EU Accession for Post-Communist Europe

Author:
David R. Cameron
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The accession of ten new member states in May 2004 and the prospective accession of several more in the near future will pose severe budgetary, administrative, and operational challenges for the European Union. But however great, the challenges of enlargement pale in comparison with the challenges of accession that will be faced by the new member states, especially those which until a decade ago were governed by Communist parties that presided over centrally-planned and predominantly-collectivized economies. This paper explores five of the most critical challenges that will face the new member states of post-Communist Europe: 1) administering the acquis; 2) deepening and extending the reform and transformation of the economy; 3) reducing the high levels of unemployment and large government, trade, and current account deficits; 4) financing accession in the face of the EU’s budgetary constraints and financial provisions; and 5) coping with all of those challenges in the face of low levels of support for enlargement in many of the member states and high levels of ambivalence and skepticism about membership in most of the new member states. The chapter concludes by noting the low levels of trust in the national government and satisfaction with the way democracy works that exist in most of the new member states and suggests that those low levels of trust and satisfaction will make it difficult for the governments in the new member states to address these challenges while also maintaining sufficient public support to retain office.
Topic:
Economics and Government
Political Geography:
Europe

450. Trends in Competitive Balance: Is there Evidence for Growing Imbalance in Professional Sport Leagues?

Author:
Arne Feddersen and Wolfgang Maennig
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
The concept of competitive balance is a central aspect in the literature of sports economics. A popular argumentation of sport functionaries is that dominance of one or a few teams could lead to unequal incomes for the clubs, restrictions in the clubs’ ability to improve sporting performance and ultimately to a loss of attractiveness and loss of income for the league. Following this line of reasoning and alleging a negative trend in competitive sports functionaries often try to implement regulations in team sport leagues. The aim of this paper is to analyze for eight different leagues if there is such a trend existing. For an empirical test for trends in competitive balance of four European soccer leagues (ENG, ESP, GER, ITA) and four US Major Leagues (MLB, NBA, NFL, NHL), OLS regressions with a constant were carried out. For the entire observation period from 1969/70 to 2003/2004, of 48 trends ascertained, only 12 could be observed as being significantly positive (i.e. growing imbalance) with 19 significantly negative (i.e. growing balance). The remaining 17 trends were insignificantly different from zero.
Topic:
Economics, Sports, Soccer, Competitive Balance, and Sports Leagues
Political Geography:
Europe, Global Focus, and United States of America

451. The EU's Security Policy Towards the Mediterranean: An (Im)possible Combination of Export of European Political Values and Anti-terror Measures?

Author:
Ulla Holm
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The Southern part of the Mediterranean has been put high on the EU-security agenda after 9/11. The Working paper makes the argument that the EU-politics towards its Arab Mediterranean neighbours are staggering between a status quo oriented politics and a politics of export of democracy. The tension is seen as an expression of two conceptualizations of the Mediterranean and the uneasy combination of four contradicting concepts on the relationship between the Mediterranean and the EU. The first conceptualization is about the Mediterranean as a cultural cradle of great civilizations. The other one is about the Mediterranean as a conflict-ridden zone. These conceptualizations are interlinked in the discourses on how to export security to the South and which kind of security the EU has to promote. The inter-linkage between the two conceptualization of the Mediterranean is furthermore linked up to two oppositional representations of the EU: the EU as an exporter of democracy and the EU as being a model to copy but not an empire-builder. This results in the following dilemmas caused by the oppositional relationship between four concepts: Respect for cultural diversity and export of political shared values. Respect for Arab sovereignty and export of European political values. The opposition between the four concepts is sharpened by Islamic terrorism which underlines the uneasy 'marriage' of the four concepts.
Topic:
Economics and Sovereignty
Political Geography:
Europe and Arabia

452. Migrant Transfers as a Development Tool: The Case of Morocco

Author:
Nina Nyberg Sørensen
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
In 2003, the Global Development Finance Annual Report took formal notice of remittances as an important source of external development finance for the first time, listing Morocco as the 4th largest remittance recipient among developing countries. This paper examines the positive and negative results of remittances on Moroccan development, as well as of other migration-driven social changes. It offers a brief historical background to Moroccan migration and examines more closely Moroccan emigration to the EU from the early 1960s. Remittance practices are discussed, as is the issue of return migration. The paper concludes by discussing prospects for general development in the country and summarizing policy options in the field.
Topic:
Development, Economics, and Migration
Political Geography:
Europe and Morocco

453. The Development Dimension of Migrant Transfers

Author:
Nina Nyberg Sørensen
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The current appreciation of remittances as a development tool is recent and several questions on how best to capture their development impact remain. This working paper addresses some of the fundamental questions pertaining to the role of remittances in the migrationdevelopment nexus. Apart from offering a conceptual tool for understanding of the importance of remittances for developing countries, the paper gives a global overview of various types of remittance flows, the dynamics of such flows and their possible developmental impact on developing countries, including those experiencing conflicts. The paper concludes by offering some ideas on how appropriate policy measures could contribute to making remittances into an effective development tool.
Topic:
Development, Economics, and Migration
Political Geography:
Europe

454. Through Economy to Democracy and Security? An Integrated Approach to Stability in South East Europe - 7th Workshop of the Study Group "Regional Stability in South East Europe"

Author:
Frederic Labarre
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
Austrian National Defence Academy
Abstract:
In contrast to the Central European transition countries, the economies of South East Europe (SEE) have been facing complex and interrelated political and economic problems. The dissolution of Yugoslavia combined with market losses, war in Bosnia and Herzegovina and Croatia, sanctions finally culminating in the Kosovo conflict were the main causes of political and economic instability in the whole region. Taking into account these factors, output recovery has been much slower in SEE than in the Central European countries. Measured in purchasing power standards, Croatia is the best performer in the region, with its GDP at about 38% of the EU average. Next comes Bulgaria (32%), whereas the respective values for Serbia and Montenegro and Albania range between 15-17%. Looking at the economic performance in the 1990-2002 period, Croatia and Romania reached almost 94% of their pre-transitional level in 2002, followed by Bulgaria and Macedonia (about 88% each). Serbia and Montenegro, the worst-affected, reached only about half of what it was in 1990. The cumulative output decline there was one of the largest among all the Central and East European countries.
Topic:
NATO, Diplomacy, Economics, Political Economy, and Regional Cooperation
Political Geography:
Europe, Bosnia, Herzegovina, Kosovo, Yugoslavia, Bulgaria, Balkans, and Romania

455. War Economies in a Regional Context: Overcoming the Challenges of Transformation

Author:
Kaysie Studdard
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
International Peace Institute
Abstract:
This policy report distills key findings from research commissioned by the International Peace Academy's program on Economic Agendas in Civil Wars (EACW) on the regional dimensions of war economies and the challenges they pose for peacemaking and peacebuilding. Drawing from analytical research as well as case studies of Afghanistan in Central Asia, Sierra Leone in West Africa, and Bosnia and Herzegovina in Southeast Europe, a number of key issues concerning the political economy of regional war economies and lessons for more effective peacebuilding were identified: The notion that internal conflicts have economic "spill over" or "spill into" effects on neighboring states needs to be extended and deepened. Policymakers should work to develop a more comprehensive understanding of the interstate impacts of civil conflict that gives greater weight to systemic cross-border networks and less to potentially 'one-off' transborder phenomena.
Topic:
Economics, Peace Studies, Regional Cooperation, and War
Political Geography:
Afghanistan, Europe, Central Asia, Bosnia, Herzegovina, and West Africa

456. Is The Corporate Loan Market Globally Integrated? A Pricing Puzzle

Author:
Mark Carey and Gregory P. Nini
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We offer evidence that interest rate spreads on syndicated loans to corporate borrowers are economically significantly smaller in Europe than in the U.S., other things equal. Differences in borrower, loan and lender characteristics associated with equilibrium mechanisms suggested in the literature do not appear to explain the phenomenon. Borrowers overwhelmingly issue in their natural home market, and bank portfolios display significant home “bias.” This may explain why pricing discrepancies are not competed away, but the fundamental causes of the discrepancies remain a puzzle. Thus, important determinants of loan origination market outcomes remain to be identified, home “bias” appears to be material for pricing, and corporate financing costs differ in Europe and the U.S.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States and Europe

457. Benefits and Spillovers of Greater Competition in Europe: A Macroeconomic Assessment

Author:
Tamim Bayoumi, Douglas Laxton, and Paolo Pesenti
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Using a general-equilibrium simulation model featuring nominal rigidities and monopolistic competition in product and labor markets, this paper estimates the macroeconomic benefits and international spillovers of an increase in competition. After calibrating the model to the euro area vs. the rest of the industrial world, the paper draws three conclusions. First, greater competition produces large effects on macroeconomic performance, as measured by standard indicators. In particular, we show that differences in competition can account for over half of the current gap in GDP per capita between the euro area and the US. Second, it may improve macroeconomic management by increasing the responsiveness of wages and prices to market conditions. Third, greater competition can generate positive spillovers to the rest of the world through its impact on the terms of trade.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
Europe

458. The Optimal Degree of Discretion in Monetary Policy

Author:
Susan Athey, Andrew Atkeson, and Patrick J. Kehoe
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the model, well-designed rules trade off society's desire to give the monetary authority discretion to react to its private information against society's need to guard against the time inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap constrains policy and the smaller is the degree of discretion. As this problem becomes sufficiently severe, the optimal degree of discretion is none.
Topic:
Civil Society, Economics, Government, and International Trade and Finance
Political Geography:
Europe

459. Peace-building and Development in Guatemala and Northern Ireland

Author:
Charles A. Reilly
Publication Date:
10-2004
Content Type:
Working Paper
Institution:
Kroc Institute for International Peace Studies, University of Notre Dame
Abstract:
Guatemala and Northern Ireland signed historic peace accords in 1996 and 1998 respectively. This paper, part of a longer term project comparing lessons learned from implementation in the two cases, focuses especially on Guatemala, making some middle range peace/development policy recommendations for that country's recently elected government and civil society organizations. Despite very different economic development levels, both countries are divided, find peace implementation difficult, and are heavily influenced by outside actors - including their own diaspora. Guatemala is deeply divided internally along class, race and ethnic lines, with more than 15% of its population in the U.S. (and close affinity with Mayan peoples who live across the Mexican border). Ireland too is divided along religious and ethnic lines, a border crosses the island. The North is linked politically to the United Kingdom, with social ties to emigrant populations there, in the south and in the United States. Guatemala, like its Central American neighbor El Salvador, embarked on peace-building with UN oversight, while the Northern Irish had United Kingdom and Irish Republic support for making peace. (Without pre-judging an eventual political resolution of the two Irelands, I'll refer to both Northern Ireland and the Irish Republic, since that peace process, like Guatemala's, necessarily transcends borders). When compared to Northern Ireland, Guatemalan religious differences are minor, and religious leaders, Catholic, Protestant and Mayan played key roles in the peace process. Emigration figures large in both settings, as do many centuries of colonial or imperial domination. Both countries have struggled with post-accord violence which has reached alarming levels in Guatemala. Peace and development are inseparable - hence I emphasize growth with equity issues that are cause and consequence of both conflicts.
Topic:
Development, Economics, and Peace Studies
Political Geography:
United States, United Kingdom, Europe, Central America, Mexico, and North Ireland

460. The Challenge of Poor Governance and Corruption

Author:
Jens Chr.1 Andvig
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The paper is the author's so-called “Opponent paper” to Susan Rose-Ackerman's proposals for good governance and anti-corruption policies at the Copenhagen Consensus 2004 meeting 24–28 May. There the most promising anti-corruption policies had to compete with other best policies at other fields such as fight against AIDS, malaria, hunger prevention, and so on. He argues that while corruption and governance problems are important and may prevent any other kind of policy to succeed, no really effective anti-corruption policy has so far been proposed, and if it was, we wouldn't know that it did. Hence, it would be unreasonable to make a strong claim for anti-corruption projects against their competitors.
Topic:
Economics, Human Welfare, and Politics
Political Geography:
Europe

461. Well Being and Unemployment in Russian in the 1990's: Can Society's Suffering Be Individuals' Solace?

Author:
Andrew; Gaddy Eggers
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
This paper studies the effect of regional unemployment rates on subjective well-being in post-Soviet Russia. Research conducted in Europe and the United States has documented that higher unemployment rates lead to lower reported life-satisfaction. By contrast, our Russian study finds a small but significant effect in the other direction. We estimate that du ring the period of our study (1995-2001), each percentage point increase in the local unemployment rate was correlated with the average well-being of people in the region increasing by an amount equivalent to moving 2% of the population up one level in life satisfaction measured on a five-point scale. Our intuition is that the so-called comparison effect drives this result: when individuals observe their peers suffering in a troubled economy, they lower their standards of what is good enough. All else equal, they thus perceive themselves to be better off in worse times. In highlighting the dependence of subjective well-being scores on expectations and reference groups, we sound a note of caution against using happiness data from economies in crisis to draw macroeconomic policy conclusions.
Topic:
Economics and Human Welfare
Political Geography:
Russia, United States, Europe, Asia, and Soviet Union

462. Transforming Competitiveness in European Transition Economies: The Role of Foreign Direct Investment

Author:
Jasminka Sohinger
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Foreign direct investment (FDI) has become one of the main drivers of globalization and integration of the European transition economies into the world economy, especially the European Union. Its growth enhancing capacity has played a significant role in transforming their competitiveness, both locally and on international markets, and its propensity to stimulate institution buliding is changing both economic and political landscapes in the region. The economic conditionality of FDI and the EU access-driven reforms are working hand in hand in helping the goals of transition and the convergence process. The achievement of both goals is seen as the best guarantor of peace and security in the region.
Topic:
Security, Economics, Emerging Markets, Globalization, International Trade and Finance, and Foreign Direct Investment
Political Geography:
Europe

463. Copying the Nasdaq Stock Market in Europe: Supranational Politics and the Convergence-Divergence Debate

Author:
Elliot Posner
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Financial arrangements reflect political bargains. Like national labor regimes, the formal and informal rules and relationships governing the allocation of financial resources distinguish one type of capitalist society from another. How firms are financed shapes companies and industries and affects the risks citizens must bear, how they save for retirement, where they work, their job security and ability to buy homes, and the disparity between rich and poor. Leading theories provide increasingly inadequate explanations for changing institutional arrangements in western European finance. They emphasize convergence to global standards and the causal effects of either increased levels of mobile capital or the diffusion of ideas. Or else they describe change within a national trajectory and attribute it primarily to domestic politics, national historical institutions and path dependency. They exclude the possibility of independent regional-level causes. My empirical study of changing financial arrangements for smaller European companies between 1977 and 2003 reveals causes rooted firmly in European Union politics. Neither global forces nor national institutions were primarily responsible for drawing the stock exchanges of Europe into cross-border competition and prompting them to create new US-style markets. Instead, supranational political entrepreneurs, acting with relative autonomy, largely drove this pattern of institutional change. In pushing beyond the international-domestic dichotomy and emphasizing the independent effects of European-level politics, my argument contributes to a growing body of detailed empirical research on the national and global impact of the EU. It also provides more sustained analysis of the causes, mechanisms and effects of adopting US institutional forms outside American borders.
Topic:
Conflict Resolution, Economics, and Politics
Political Geography:
America and Europe

464. Industrialization and Urbanization: Did the Steam Engine Contribute to the Growth of Cities in the United States?

Author:
Sukkoo Kim
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Industrialization and urbanization are seen as twin processes of economic development. However, the exact nature of their causal relationship is still open to considerable debate. This paper uses firm-level data from the manuscripts of the decennial censuses between 1850 and 1880 to examine whether the adoption of the steam engine as the primary power source by manufacturers during industrialization contributed to urbanization. While the data indicate that steam-powered firms were more likely to locate in urban areas than water-powered firms, the adoption of the steam engine did not contribute substantially to urbanization.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
United States and Europe

465. A New Form of Governance? Comparing the Open Method of Coordination to Multilateral Surveillance by the IMF and the OECD

Author:
Armin Schäfer
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The Open Method of Coordination (OMC) has received much attention in the recent EU-literature. The predominant view claims that the OMC is not only a new but also an effective policy-making instrument. This paper raises doubts about both claims by offering a comparison of soft law policy coordination in three international organizations. More specifically, this paper compares the European Employment Strategy – which was the first use of the OMC – to the Broad Economic Policy Guidelines of the EU, the OECD Economic Surveys, and the IMF Article IV Consultations. Based on expert interviews, it seeks to demonstrate that these procedures are forms of multilateral surveillance that do not differ in kind. Such a comparative analysis of the OMC refutes claims to its novelty. Having compared the four procedures, a more general model of multilateral surveillance consisting of six elements is generated that facilitates further comparisons. This paper concludes that governments select voluntarist procedures mainly to secure their own competencies rather than to realize common goals. Effective problem-solving is therefore not necessarily the dominant objective of soft law.
Topic:
Economics, International Law, and International Organization
Political Geography:
Europe

466. A Matter of Degree: The Role of Journalists as Activists in Journalism Business and Policy

Author:
Neil Shister
Publication Date:
04-2004
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
The prevailing view of journalism today draws on strands from a diverse portfolio of political, legal, and commercial theories. Some of the propositions underlying the way we regard the practice of the craft date back to the 18th-century “age of reason;” others are as current as yesterday's Wall Street media deal. “Journalism” is a historical hybrid— more an evolving social construct than a fixed point of reference. As such, it conveys contradictory associations: on one hand a band of swashbuckling iconoclasts daring to “speak truth to power;” on the other hand considerably more temperate, disinterested professionals gathering content to distribute through the “information division” of giant corporations. Each image is exaggerated; neither is wholly wrong
Topic:
Economics, Government, and Politics
Political Geography:
United States and Europe

467. Welfare and the Labour Market in the EU

Author:
Marie-Laure Michaud
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Over the last two decades, EU institutions have been increasingly concerned with the issues of unemployment reduction and job creation. The EU has recommended that member states develop welfare systems that moderate the negative effects of market relationships on the one hand, and enhance the efficiency of market performance on the other.
Topic:
Economics and Human Welfare
Political Geography:
Europe

468. Are the Balance of Payments Deficits in the Baltic Countries Sustainable?

Author:
Jorgen Drud Hansen and Morten Hansen
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
For almost a decade all three Baltic countries have witnessed substantial deficits on the current accounts of the balance of payments. This paper discusses whether this situation should be a matter of concern. Recent literature on the sustainability of balance of payments deficits is reviewed and put into a Baltic context. The main conclusion is that the recurrent large deficits in the Baltic countries pose a risk for the fixed exchange-rate policies until the countries adopt the euro. In the longer term, large deficits will influence the time path of convergence of living standards between the Baltic countries and the EU as a whole.
Topic:
Development and Economics
Political Geography:
Europe and Eastern Europe

469. Measuring the Economic Impact of an EU–GCC Free Trade Agreement

Author:
David Kernohan and Dean A. DeRosa
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Economic growth rates in the Gulf region have languished in recent years and need to be raised to accommodate the rapidly growing populations and social aspirations of the region. Using a simple model of world trade, this report investigates the economic impacts of the new customs union of the Gulf Cooperation Council (GCC) and the proposed free trade agreement (FTA) between the GCC and European Union. The quantitative results suggest that the new customs union and proposed EU-GCC free trade agreement both appreciably expand trade and improve economic welfare in the GCC countries, with little significant economic impact on the EU. As expected, the FTA results in larger GCC economic gains than the customs union because it affords GCC consumers greater opportunity to enjoy imports at internationally competitive prices. Although welfare gains under the proposed FTA closely approximate those under open regionalism (concerted trade liberalisation on a most favoured nation basis), reducing the 5% GCC common external tariff to about 3% as part of the FTA negotiations would not only ensure near-maximum trade performance and welfare gains but also add further to the attractiveness of the GCC countries as a location for foreign direct investment.
Topic:
Development, Economics, Treaties and Agreements, and Population
Political Geography:
Europe

470. Why Is There a Productivity Problem in the EU?

Author:
Francesco Daveri
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Magazines and newspapers often refer to or even take for granted the economic decline of the EU, particularly when contrasting the EU data with US data. The first part of this paper poses the question of whether IT – as often alleged – is really the only cause for the EU's productivity slowdown. The conclusion is that it is not. The non-IT part of the economy has not only contributed to the slowdown but appears to have crucially contributed to the EU-US growth gap as well. There is thus little reason for the EU to target IT-diffusion as an intermediate goal, as implied by the Lisbon strategy. The second part of the paper, after showing that the growth slowdown comes from the reduction of non-IT capital deepening and the lack of acceleration in total factor productivity growth, argues that the slowdown of capital deepening will continue. The scarce resources available for enhancing growth should concentrate on providing incentives to R and innovation at large, rather than financing traditional infrastructures. This is at odds with the goals pursued by the EU within the framework of the European Growth Initiative.
Topic:
Development, Economics, and Treaties and Agreements
Political Geography:
Europe

471. The Impact of Unemployment on Individual Well-Being in the EU

Author:
Namkee Ahn, Juan Ramón García, and Juan Francisco Jimeno
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Among the working-age population, one of the most damaging individual experiences is unemployment. Many previous studies have confirmed the devastating effects of unemployment on individual well-being, both pecuniary and non-pecuniary. Using the data from the European Community Household Panel survey, we examine the factors that affect unemployed workers' well-being with respect to their situations in their main vocational activity, income, housing, leisure time and health in Europe.
Topic:
Conflict Resolution, Economics, and Human Welfare
Political Geography:
Europe

472. Economic Policy Coordination in EMU: What Role for the SGP?

Author:
Jørgen Mortensen
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The present paper discusses the implications of the recent institutional crisis in the EU provoked by the failure of the Economic and Financial Affairs Council (ECOFIN) to impose the sanction on Germany and France provided for in the Stability and Growth Pact, along with Article 104 and the associated protocol of the Maastricht Treaty. The paper situates the debate concerning the application of the Stability and Growth Pact (SGP) in a broader evolution of the struggle between two schools of thought concerning macroeconomic policy–making in the European Union: the school calling for a strengthening of competences at the EU level (federal economic government) and the school arguing for preserving national competences for budgetary policy even in the face of the transfer of competence for monetary policy to the European Central Bank (ECB). The paper argues that the SGP represents an acceptable comprise between the two views of the schools in so far as it establishes rules to be respected without actually transferring competence to the Council in the field of budgetary policy. Consequently, the SGP has not and does not add to the 'democratic deficit' within the EU institutional framework. The paper argues, nevertheless, that the excessive deficit procedure (EDP) puts too strong an emphasis on the government budget deficit and suggests that emphasis on the sustainable level of public debt would ensure a stronger basis for assessing whether a given budget deficit may be considered excessive or not.
Topic:
Defense Policy, Economics, and Treaties and Agreements
Political Geography:
Europe, France, and Germany

473. Theorising European Strategic Culture: Between Convergence and the Persistence of National Diversity

Author:
Christoph O. Meyer
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This working document focuses on the dynamics and scope of strategic culture–building in the context of the European Union's aspirations to develop a European security and defence policy (ESDP). It argues that the notion of strategic culture can be useful in assessing the context in which the ESDP will develop further as well as its performance in matters of conflict prevention, management and resolution. Nevertheless, in order to be conceptually and empirically useful, strategic culture needs to be disaggregated into collective norms about the means and ends of security policy, as well as its different carriers such as political elites, societies and armed forces. The paper examines the convergence thesis and suggests three theories to explain convergence informed by realist, constructivist and regional theories of political change. Yet the paper also argues that these forces can affect national strategic cultures differently, depending on the countries' geopolitical positions, the institutional stickiness of domestic ideas, values and norms, and the degree to which such norms are subject to partisan or societal contention. On this basis, the paper advances some hypotheses about the actual extension of the convergence process, which will need to be validated by further empirical study.
Topic:
Defense Policy, Economics, and International Trade and Finance
Political Geography:
Europe

474. Economic Prospects for Kaliningrad: Between EU Enlargement and Russia's Integration into the World Economy

Author:
Evgeny Vinokurov
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The Kaliningrad oblast of Russia is currently an important focal point of discussions between the European Union and Russia. Although small in terms of geography and population, Kaliningrad has grown in importance due to the EU enlargement process. Since the break–up of the Soviet Union, the oblast has become an exclave of Russia, and it is now set to also become an enclave within the EU. This paper examines the state of Kaliningrad's economy and trade. The economic crisis that took place in Russia in the 1990s had severe consequences for Kaliningrad, as old patterns of production and trade were disrupted. Since 1999, however, the regional economy has grown with impressive speed. Kaliningrad's Special Economic Zone (SEZ) status has played a crucial role in determining its new patterns of production and trade specialisation. The paper argues that the SEZ regime has made the region's economic growth faster but also vulnerable.
Topic:
Economics and International Trade and Finance
Political Geography:
Russia, Europe, and Asia

475. Can Labour Market Institutions Explain Unemployment Rates in New EU Member States?

Author:
Sjef Ederveen and Laura Thissen
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This study poses the question about whether labour market institutions can explain unemployment rates in the ten new European Union member states. In five out of the ten new member states, unemployment rates lie above the average in the 15 member states of the European Union (EU-15) that comprised the EU prior to May 2004. The study finds that labour market institutions in the acceding countries are less rigid than in the EU-15. Moreover, labour market institutions explain only a minor part of unemployment in the new EU member states. This does not mean that these countries have no labour market problems. Just as in the EU-15, a great deal of heterogeneity exists among the acceding countries. In some of them, labour market reforms could prove a key issue in improving employment performance. The main worry is the poor labour market performance in Poland and the Slovak Republic, where unemployment has risen to almost 20%. The main reasons for this growth are i) postponed restructuring in combination with tight monetary policy; ii) poor governance; and iii) an increasing labour force.
Topic:
Economics and Human Welfare
Political Geography:
Europe

476. Business Cycle Synchronisation in the Enlarged EU: Co-Movements in the New and Old Members

Author:
Zsolt Darvas and Gyorgy Szapary
Publication Date:
03-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
It is generally recognised that countries wanting to join a monetary union should display the optimal currency area properties. One such property is the similarity of business cycles. We therefore undertook to analyse the synchronisation of business cycles between the EMU-12 and the eight new EU members from Central and Eastern Europe (CEECs), for which the next step to be considered in the integration process is entry into the EMU. In contrast to the usually analysed GDP and industrial production data, we extend our analysis to the major expenditure and sectoral components of GDP and use several measures of synchronisation. The main findings of the paper are that Hungary, Poland and Slovenia have achieved a high degree of synchronisation with EMU for GDP, industrial production and exports, but not for consumption and services. The other CEECs have achieved less or no synchronisation. There has been a significant increase in the synchronisation of GDP and also its major components in the EMU members since the start of the run-up to EMU. While this lends support for the existence of OCA endogeneity, it cannot be unambiguously attributed to it because there is also evidence of a world business cycle. Another finding is that the consumption-correlation puzzle remains, but its magnitude has greatly diminished in the EMU members, which is good news for common monetary policy.
Topic:
Economics, International Cooperation, and International Trade and Finance
Political Geography:
Europe

477. Searching for the Determinants of IT Investment: Panel Data Evidence on European Countries

Author:
Paolo Guerrieri, Cecilia Jona-Lasinio, and Stefano Manzocchi
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The aim of this paper is to identify the degree of information technology (IT) adoption in individual European economies and to analyse the determinants of IT investment among a panel of EU countries. We first analyse the dynamics of IT investment expenditure in 15 European countries from 1992 until 2001 and, by means of a cluster analysis, we draw a picture of IT diffusion in Europe. By clustering the European countries according to their shares of IT spending over GDP, we identify three fairly stable groups of fast, medium and slow adopters. We then build an econometric equation of the determinants of IT investment to use with panel data in estimations for five European economies over the period of 1980 to 2001. We consider aggregate IT investment as well as separate investment in hardware or software. Financial conditions, income growth and comparative advantage turn out to affect IT investment, but we find that the determinants of hardware investment only partially overlap with those of software.
Topic:
Economics, International Trade and Finance, and Science and Technology
Political Geography:
Europe

478. Post-Communist Competition and State Development

Author:
Anna Grzymala-Busse
Publication Date:
12-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Theories of institutional development have tended to view discretion, or the leeway to act within institutional bounds, as an often unintended consequence of agency design and institutional specification. Yet the post-communist states show that discretion is a fundamental goal of institutional creation among competing elites. In turn, while political competition has been identified as a key constraint on discretion in institutional creation, widely-used indicators of political competition are inadequate. As post-communist democracies show, the number or seat share of political parties matters far less than what parties do in parliament. The key factor is a robust opposition: a clear, credible, and contentious threat to governing parties. Such opposition leads to the rise of formal institutions that both minimize the discretion necessary for rent-seeking, and favor equitable distributional outcomes.
Topic:
Economics and Government
Political Geography:
Europe

479. The Language of Democracy: Vernacular Or Esperanto? A Comparison between the Multiculturalist and Cosmopolitan Perspectives

Author:
Daniele Archibugi
Publication Date:
12-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Will Kymlicka has argued “democratic politics is politics in the vernacular.” Does it imply that democratic politics is impossible in a multilingual community, whether at the local, national, regional or global level? This paper discusses this assumption and maintains that democratic politics should imply the willingness of all players to make an effort to understand each other. Democratic politics imply the willingness to overcome the barriers to mutual understanding, including the linguistic ones. Any time that there is a community of fate, a democrat should search for methods that allow deliberation according to the two key conditions of political equality and participation. If linguistic diversity is an obstacle to equality and participation, some methods should be found to overcome it, as exemplified by the Esperanto metaphor. The paper illustrates the argument with four cases of multi-linguistic political communities: a) a school in California with English-speaking and Spanish-speaking students; b) the city of Byelostok in the second half of the nineteenth century, where four different linguistic communities (Polish, Russian, German and Yiddish) coexisted. This led Markus Zamenhof to invent Esperanto; c) the linguistic problems of the Indian state, and the role played by English – a language unspoken by the majority of the Indian population in 1947 – in developing Indian democracy; and d) the case of the European Parliament, with twenty languages and a wealth of interpreters and translators.
Topic:
Democratization, Economics, and Politics
Political Geography:
Russia, Europe, India, California, and Germany

480. All for All: Equality and Social Trust

Author:
Bo Rothstein and Eric M. Uslaner
Publication Date:
12-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The importance of social trust has become widely accepted in the social sciences. A number of explanations have been put forward for the stark variation in social trust among countries. Among these, participation in voluntary associations received most attention. Yet, there is scant evidence that participation can lead to trust. In this paper, we shall examine a variable that has not gotten the attention we think it deserves in the discussion about the sources of generalized trust, namely equality. We conceptualize equality in two dimensions: one is economic equality and the other is equality of opportunity. The omission of both these dimensions of equality in the social capital literature is peculiar for several reasons. One is that it is obvious that the countries that score highest on social trust also rank highest on economic equality, namely the Nordic countries, the Netherlands, and Canada. Secondly, these are countries that have put a lot of effort in creating equality of opportunity, not least in regard to their policies for public education, labor market opportunities and (more recently) gender equality. The argument for increasing social trust by reducing inequality has largely been ignored in the policy debates about social trust. Social capital research has to a large extent been used by several governments and policy organizations to send a message to people that the bad things in their society are caused by too little volunteering. The policy implication that follows from our research is that the low levels of trust and social capital that plague many countries are caused by too little government action to reduce inequality. However, many countries plagued by low levels of social trust and social capital may be stuck in what is known as a social trap. The logic of such a situation is the following. Social trust will not increase because massive social inequality prevails, but the public policies that could remedy this situation cannot be established precisely because there is a genuine lack of trust. This lack of trust concerns both “other people” and the government institutions that are needed to implement universal policies.
Topic:
Civil Society, Economics, and Gender Issues
Political Geography:
Europe, Canada, and Netherlands

481. Capital, Labor, and the Prospects of the European Social Model in the East

Author:
Dorothee Bohle and Bela Greskovitz
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
During the past decade of European economic integration vastly worse standards have emerged in work conditions, industrial relations, and social welfare in Eastern Europe than in the West. Area scholars explain this divide by labor weakness caused by the ideological legacy of communism, and do not problematize the impact of transnational capital. In contrast, this essay argues that the reason why the European social model has not traveled to the East is that its socio-economic foundations, the industrial building blocks of the historical compromise between capital and labor, have not traveled either. In the West, the compromise had been rooted in capital-intensive consumer durables industries, such as car-manufacturing, and their suppliers. These sectors brought together organized and vocal labor with businesses willing to accommodate workers' demands, because for them labor had been less a problem as a cost-factor and more important as factor of demand. However, the main driving force of the eastward expansion of European capital has been the relocation of labor-intensive activities where business relies on sweating masses of workers, whose importance as consumers is marginal, and who are weak in the workplace and the marketplace. With this general conceptualization of how the emerging new European division of labor constrains the social aspects of East European market societies as a background, the essay studies the cases of Hungarian electronics and Slovak car industries in order to better understand how particular features of various leading sectors mediate the general pattern.
Topic:
Economics, Government, and Human Welfare
Political Geography:
Europe and Eastern Europe

482. Lessons for Post-Communist Europe from the Iberian Integration into the EU after Sixteen Years

Author:
Sebastian Royo
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The purpose of this paper is to outline the main consequences for Portugal and Spain of EU integration. It uses the integration of Portugal and Spain into the European Union as an opportunity to draw some lessons that may be applicable to East European countries as they pursue their own processes of integration into the European Union. It examines challenges and opportunities that new member states from central and Eastern Europe will face when trying to integrate in the EU. Finally, the paper analyzes the impact the 2004 enlargement will have on the Iberian countries.
Topic:
Economics and Government
Political Geography:
Europe and Spain

483. Why European Citizens Will Reject the EU Constitution

Author:
Claes H. de Vreese
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This study tests competing hypotheses about popular support for European integration. It introduces anti-immigration sentiments as a key variable for understanding reluctance towards integration. Drawing on survey data, it is found that anti-immigration sentiments, economic considerations, and the evaluation of domestic governments are the strongest predictors of both support for integration and individuals' propensity to vote “Yes” in a referendum on the enlargement of the EU. When extrapolating the findings to future referendums on issues of European integration, it may be predicted that such referendums will result in a “No” outcome under the conditions of high levels of anti-immigration sentiments, pessimistic economic outlooks, and/or unpopularity of a government.
Topic:
International Relations, Economics, Government, and Politics
Political Geography:
Europe

484. The EMU Macroeconomic Policy Regime and the European Social Model

Author:
Andrew Martin
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper will be a chapter in Euros and Europeans: Monetary Integration and the European Social Model, Andrew Martin and George Ross, eds., Cambridge University Press, 2004. Over time, the impact of EMU on the European social model (ESM) is likely to depend most fundamentally on its effects on unemployment. If EMU makes possible a significant reduction in unemployment, it poses no threat to the ESM. However, EMU is likely to keep unemployment at high levels. This expectation hinges on two propositions: 1) in order to bring unemployment back down after an extended period of disinflation has kept growth below its potential and unemployment high, a period of economic growth above its long-run potential – a growth spurt – is necessary, and 2), the EMU macroeconomic policy regime, as interpreted and implemented by the ECB, blocks such a growth spurt. The first part of the paper describes the policy regime, arguing that the ECB's implementation of it so far and the bank's rationale for doing so indicate an unwillingness to permit the growth spurt needed to significantly reduce unemployment. Its rationale invokes the orthodox view that monetary policy has no long run effects on growth and employment. This view is challenged by an alternative view, described in the second part. The alternative rests mainly on an empirical analysis of cases in which disinflation was and was not followed by growth spurts during the 1980s and 1990s. Showing that in the long run unemployment was lower without higher inflation where monetary policy permitted growth spurts than where it did not, this analysis suggests that the ECB's orthodoxy is fundamentally flawed and that adherence to it will perpetuate Europe's high unemployment.
Topic:
Economics, Human Welfare, and Politics
Political Geography:
Europe

485. Learning and Change in Twentieth-Century British Economic Policy

Author:
Michael J. Oliver and Hugh Pemberton
Publication Date:
05-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Despite considerable interest in the means by which policy learning occurs, and in how it is that the framework of policy may be subject to radical change, the “black box” of economic policymaking remains surprisingly murky. This article utilizes Peter Hall's concept of “social learning” to develop a more sophisticated model of policy learning; one in which paradigm failure does not necessarily lead to wholesale paradigm replacement, and in which an administrative battle of ideas may be just as important a determinant of paradigm change as a political struggle. It then applies this model in a survey of UK economic policymaking since the 1930s: examining the shift to “Keynesianism” during the 1930s and 1940s; the substantial revision of this framework in the 1960s; the collapse of the “Keynesian-plus” framework in the 1970s; and the major revisions to the new “neo-liberal” policy framework in the 1980s and 1990s.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
United Kingdom and Europe

486. How Can International Organizations Shape National Welfare States? Evidence from Compliance with EU Directives

Author:
Katerina Linos
Publication Date:
01-2004
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
How can international organizations shape national welfare states? The answer depends on why national governments comply with international organization mandates. International relations scholarship offers two competing compliance models. Enforcement theories emphasize states' utilitarian calculus and predict that states' policy preferences determine implementation, while managerial theories attribute non-compliance to states' capability limitations and emphasize institutional variables. This paper examines the implementation of EU social policy directives through a new quantitative dataset and qualitative case studies of implementation in Greece and Spain. Three proxies for national social policy preferences – low labor costs, high unemployment and early national social legislation – predict implementation delays. At the same time, factors unrelated to national preferences on particular directives have at least as large an impact on timely implementation. Thus, a national bureaucracy's capacity and the absence of veto players reduce implementation delays. These findings suggest that capabilities influence compliance at least as much as preferences, but through mechanisms different from the ones emphasized in existing work. Although international organizations may not be especially successful in overcoming past policy legacies in favor of future commitments, they can reorient the axes of contestation from left-right to supra-sub national and thus shape national policies.
Topic:
Economics, Globalization, and International Organization
Political Geography:
Europe

487. CERI: Barter and Inter-business Transactions in Russia: Trade Normalization in View after the Ruble Crisis of 1998?

Author:
Caroline Dufy
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales
Abstract:
Barter was a prominent issue in public debate during the 1990s in Russia: it prompted a more overall reflection on the nature of the Russian economy and the aim pursued by economic reforms. These major issues shaped a number of divisions: the government opposition portrayed barter as one of the pernicious effects of economic policies that gave priority to finance to the detriment of the national productive sphere. For others, it was to be interpreted as the legacy of the Soviet industrial sector and its lack of competitiveness.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Russia, Europe, and Asia

488. Drifting Apart or Growing Together?

Author:
Joseph P. Quinlan
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Center for Transatlantic Relations
Abstract:
One of the defining features of the global economic landscape over the past decade has been the increasing integration and cohesion of the transatlantic economy. Globalization is happening faster and reaching deeper between Europe and America than between any other two continents. The data in this study suggest that the past decade was not primarily about U.S. companies spreading their operations to the four corners of the globe. Rather, it was a time when the transatlantic economy became even more intertwined and interdependent. Failing to understand this dynamic can lead to serious errors of policy and cause significant damage to U.S. and European interests.
Topic:
Economics, Globalization, and Political Economy
Political Geography:
United States, America, and Europe

489. Chechen Militia Threaten Increased Terrorism

Author:
Tamara Makarenko
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
Centre for the Study of Terrorism and Political Violence, St. Andrews University, Scotland
Abstract:
Chechen resistance movements have reorganised to adjust to the post 11 September 2001 security environment, and appear to be adopting more lethal terrorist tactics. Tamara Makarenko reports.
Topic:
Security, Economics, and Terrorism
Political Geography:
Russia, Europe, Asia, and Moscow

490. Economic Conditions, Democracy and the IMF

Author:
Susan Minushkin
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This study seeks to test the hypotheses that different styles of financial market opening can be explained, in part, by general economic conditions and the need to attract external capital. It seeks, as well, to test the some for the more general arguments advanced in the financial market opening literature that financial market opening is a result of a country's increased participation in the international financial system and increased international trade integration. Two specifically political arguments also are tested. The first is that emerging markets opened their markets in response to pressure from the IMF. The second is that there is an association between political freedom and open markets. I test these hypotheses using regression analyses of panel data from a sample of emerging market countries.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Europe and North America

491. Take the State Back Out? Comparing French Responses to Globalization in Agriculture and Shipping

Author:
Mark Aspinwall and Imtiaz Hussain
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
How autonomous is a state in today's highly interdependent international economy to pursue policies that diverge widely from the international norm? Does the degree of autonomy vary for different domestic sectors? We adapt and apply Benjamin Cohen's unholy trinity model (1993), to a comparative assessment of how France responded to globalization over agriculture and shipping, focusing on three dimensions—investment, transaction costs, and government policy responses. Although France is reputed to possess a strong state machinery (Katzenstein, 1987; Wilson, 1987; Skocpol, 1985), our analysis raises qualifications. On the one hand, regardless of government policy intentions, we find irreversible forms of disinvestment in both sectors, though different in nature—geographic for shipping, and functional for agriculture; on the other, we also find continued dependence upon the state—for aid in shipping and resisting free trade in agriculture. We further find that, although internal and endogenous, as well as external and exogenous, factors influence policy-making, the nature of these factors are different for the two sectors. We conclude by drawing implications of our findings for state-society relations and European integration.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
Africa, Europe, and France

492. Los Balcanes: Entre el Pasado y el Presente. Una Introducción Históica a los Estudios Balcánicos

Author:
Slobodan Pajovic
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
This working paper deals with the complex, turbulent and contradictory history of the Balkans region. It is argued that the tragic realities confronting the region derive mainly from its asymmetric geopolitical, economic and cultural position, and its high degree of vulnerability and dependence on Western Europe and the Near East. It suggests that it is possible to study the history of the region by examining processes of both internal fragmentation and external subordination. While the paper cannot constitute a complete or systematic study of the Balkans, it presents and overview of the most salient features in the region's historical, politico-economic and cultural development. Two case studies, Yugoslavia and Kosovo, help to highlight the broader trends.
Topic:
Economics, Human Welfare, and Politics
Political Geography:
Europe, Iran, Middle East, Eastern Europe, Kosovo, Yugoslavia, and Balkans

493. Sustainable Regional Development through Institutionalised Trans-frontier Cooperation in the Sofia-Skopje-Nis Triangle--Towards the Establishment of a Euroregion

Author:
Stoyan Totev and Maria Boyadjieva
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
The transition process in Central and Eastern Europe was associated with increasing intra-regional disparities. It appears also that the regional inequalities in South east Europe are relatively high creating in the same time significantly higher economic and social problems. That refers to Bulgaria, Macedonia and FR Yugoslavia whereas every reform face serious difficulties due to the lower readiness for accession to the EU structures as well as for their backwardness in the economic development. In countries like Czech Republic, Hungary and Slovenia there exist enough resources for facing the negative effects from one or another reform as well as the necessary readiness of the population the reform s to be carried out.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe, Eastern Europe, Yugoslavia, Bulgaria, and Macedonia

494. The Federal Budget and the Regions

Author:
A.M. Lavrov
Publication Date:
01-2003
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
Improvement of the financial relations between the Federation and the regions still remains quite an urgent problem. The Concept of Reforming Inter budgetary Relations in the Russian Federation in 1999 — 2000 is being implemented; Russia's Finance Ministry has developed the Concept of Reforming Budget Federalism in the Russian Federation to 2005, which will soon be approved by the Government; a special section on interbudgetary relations has been included in the Main Long- Term Trends of Socio-Economic Policy of the Russian Federation Government program, drafted by the Strategic Research Center.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Russia, Europe, and Bosnia

495. €uros for ESDP – financing EU operations

Author:
Antonio Missiroli
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
European Union Institute for Security Studies
Abstract:
The financing of EU-led crisis management operations is a somewhat neglected yet nevertheless crucial factor affecting the external effectiveness and internal consistency of the Union's foreign and security policy. Until recently, CFSP's operational acquis has been minimal, its legal underpinning limited and tortuous, its budgetary fundament ludicrous, and its administrative practice mostly contradictory and often fraught with inter-institutional turf battles between Council, Commission and Parliament. With the launch of the first ESDP operations proper (EUPM in Bosnia and Herzegovina, Concordia in FYROM) in 2003, the forthcoming Operation Artemis in the Democratic Republic of Congo and the possible takeover of SFOR after 2004, it has become all the more important and urgent to devise more appropriate arrangements and incentives for common action. The European Convention and the ensuing Intergovernmental Conference represent additional opportunities to be seized. In this respect, the main issues to be addressed regard: a) the speed and readiness of budgetary allocations, on the one hand, and their long-term sustainability, on the other; b) the coherence of the relevant provisions, in both institutional and functional terms, and their consistency with the peculiarities of the EU as an international actor; and c) the degree of transparency, accountability and internal fairness compatible with the imperatives of crisis management. The experience of other international organisations operating in this field (NATO, OSCE, UN) can also be taken into consideration with a view to selecting rules and modalities that may be helpful in tackling the problems highlighted here. First and foremost, it is desirable that the current fragmentation of CFSP expenditure in separate EU budgetary lines be overcome. The appointment of an EU 'Minister for Foreign Affairs' (or whatever title is given to the new foreign policy supremo) is expected to help solve this problem and reduce some inter-institutional tensions and bottlenecks. For example, it is desirable for all expenditure related to civilian crisis management (with the possible exception of the salaries of seconded national personnel) to be borne by the EU bud- get in a more transparent fashion. To this end, the relevant procedures have to be made less tortuous and more flexible. Secondly, expenditure for operations 'having military or defence implications' — in so far as it will remain distinct and separate from the rest — should be pooled in a more systematic, sustainable and explicit manner. Neither the current 'ad hocery' (as exemplified by EUPM and Concordia ) nor the minimalist approach adopted by the Convention's Praesidium (with the proposal of a subsidiary 'start-up' fund) address the essential issues. In fact, if a subsidiary budget has to be set up, then it should be more ambitious and create a long- term basis for covering all the 'common costs' arising from military operations. Such an EU Operational Fund could usefully draw upon the precedent of the European Development Fund and adopt a distinct 'key' for national contributions. Such a 'key' should take into account e.g. the member states' ability to pay but also their ability to contribute in kin through the actual involvement of personnel and equipment in EU operations. It should also be periodically adjustable and help overcome potential 'burden-sharing' disputes inside the Union by setting agreed criteria against which to measure and assess national contributions without resorting to the crude GDP scale. At the same time, the Fund's financial cycle should be the same as that of the EU budget. And, in perspective, the “common costs” thus covered should include also accommodation and transportation costs, especially if the Union develops common capabilities in the fields of strategic lift and logistics. By doing so, the EU would eventually have two main modalities for common operational expenditure at its disposal: the EU budget for all non-military aspects, and the Operational Fund. Both would guarantee a reliable financial perspective. If the separation between civilian and military aspects were ever to be bridged, their merger would not represent a problem. Thirdly, the European Parliament could consider reimbursing those member states who participate in ESDP operations a fixed somme for faitaire to cover partially the per diems of their seconded personnel (civilian as well as military). Such reimbursement could be made through the EU budget annually, ex post facto, with no political conditions attached. On the one hand, it would prove that the EU budget covers not only internal benefits (agriculture and structural funds) but also external commitments. On the other, it would add transparency to ESDP in that the Parliament could organise hearings with experts and officials as well as plenary debates. For their part, the member states would gain an additional incentive – however modest – to provide adequate human resources for external operations. Finally, participating 'third' (and especially remaining and future candidate) countries could well be associated with all these arrangements, either case by case or more systematically. And none of the proposals outlined here necessarily require treaty change, although it would be preferable to insert some 'enabling' clauses in the Constitutional Treaty. All proposals, however, would require collaboration — rather than competition — between EU institutions.
Topic:
Economics, Government, and Politics
Political Geography:
Europe, Bosnia, Herzegovina, and Democratic Republic of the Congo

496. The European Union and armaments Getting a bigger bang for the Euro

Author:
Burkard Schmitt
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
European Union Institute for Security Studies
Abstract:
The proposals of the Convention on the Future of Europe and the recent European Commission Communication on a Defence Equipment Policy have revived the debate about the EU's possible involvement in armaments. There is indeed a chance today that a European Agency for Armaments, Research and Capabilities will be set up and anchored in the new EU Treaty. At the same time, there is a growing consensus that the EU Commission should have certain competencies in the field of security-related research, and even the establishment of a common defence equipment market is (again) under discussion.
Topic:
Defense Policy, Economics, and Government
Political Geography:
Europe

497. Cross Border Trafficking in South Eastern Europe - Assessing Trafficking Activities in the Southern Adriatic Region

Publication Date:
10-2003
Content Type:
Working Paper
Institution:
South Eastern Europe Clearinghouse for the Control of Small Arms and Light Weapons
Abstract:
Borders communities are more than just entry and exit points to a country. In the world of porous borders and transborder crime, these communities take on various aspects of the activities pursued in their environs. Some of these activities are clearly evident, such as the increase in youth appearing to be drug users. Other signs are more difficult to pinpoint, as one person's businessman becomes another's smuggler. These characteristics are exacerbated by the context of a post-conflict situation where tensions and isolation cause greater conspiracy theories rather than greater cooperation and coordination.
Topic:
Security, Arms Control and Proliferation, and Economics
Political Geography:
Europe

498. A Global Race for Free Trade Agreements

Author:
Arne Melchior
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The article examines the currently expanding worldwide network of bilateral free trade agreements. Following regional integration in Europe and later the Americas, the process if East Asia has accelerated from 2002. A Distinctive feature of the current stage in the expansion of FTAs beyond geographical regions and into global space, hence challenging WTOs supremacy on inter-continental trade rules. Setbacks in the WTO Doha Round may stimulate a further move towards «global bilateralism». The more such agreements in place, the greater is the incentive for new ones. Even if political obstacles hinder some agreements, the process is currently accelerating. While it is rational for countries to pursue such agreements, they should in parallel work for multilateral trade liberalisation in order to reduce the discriminatory impact of FTAs. This is needed if we are to avoid that «Most Favoured Nation» treatment under the WTO actually becomes «Least Favoured Nation» treatment: Rules that only apply to countries that are left outside the «free trade race».
Topic:
Economics, Globalization, International Trade and Finance, and Politics
Political Geography:
America, Europe, and East Asia

499. Study of selected Fredskorpset exchange projects

Author:
Axel Borchgrevink
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The present study examines nine Fredskorpset exchange projects, in order to assess the degree to which the goals specified have been reached. The basis for the exchanges is the partnerships established between institutions in Norway and counterpart entities in the South. The projects studied encompass a wide variety of such partnerships, illustrating the flexible and innovative attitude that Fredskorpset has shown during its first two years of operation. By basing its work on such partnerships, Fredskorpset has avoided some of the weaknesses of traditional volunteer programs. In terms of achievements, there are variations among the projects. While individual learning of participants was strong in all cases, the degree to which institutional benefits were achieved varied. Well-matched partners with sufficiently strong institutional structures; thorough planning of exchanges; and participants selected in accordance with well-defined needs for professional skills were seen to be important factors for successful projects.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
Europe and Norway

500. Threats to Financial Privacy and Tax Competition

Author:
Veronique de Rugy and Richard W. Rahn
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Global economic growth and personal freedom are under attack by governments and international organizations seeking to squelch financial privacy and tax competition. Privacy rights and international tax competition are beneficial constraints on the monopoly power of governments. But high-tax nations and organizations such as the European Union are pressing for international agreements to remove those limits on government power at the expense of prosperity and freedom.
Topic:
Economics, Government, and International Organization
Political Geography:
United States and Europe