Political Geography: Europe / Publication Year: within 25 Years / Topic: Economics

1001. The Aspect of Culture in Promoting Social Inclusion in the European Union: Is the Open Method of Co-ordination (OMC) Working for Ethnic Minorities?

Author:: Tove H. Malloy
Publication Date:: 09-2005
Content Type:: Policy Brief
Institution:: European Centre for Minority Issues
Abstract:: In the context of making the European economic area competitive while reaching certain social and economic goals, the 2000 European Council at Lisbon initiated an ambitious implementation scheme on its Social Agenda introducing the Open Method of Co-ordination (OMC) as an instrument to streamline and optimize Community and Member States’ policies. The OMC method is a ‘soft governance’ approach aimed at generating real political commitment and different types of norms, procedural as well as substantive, through a highly institutionalized process of information sharing, deliberation, monitoring and learning.1 The method was first introduced in the area of employment and has been followed by an OMC on Social Inclusion (OMC/Incl.). Other focus areas are social protection/pensions and health care. The OMC on employment has recently undergone a first evaluation, and the Commission is preparing to subject the OMC/Incl. to its first evaluation.2 No OMC focuses specifically on minority inclusion but the OMC/Incl. has developed into one of the key areas of European Union (EU) policy implementation that addresses the socioeconomic exclusion of members of ethnic and Roma/Sinti minorities.
Topic:: Economics, Regional Cooperation, Minorities, European Union, and Social Services
Political Geography:: Europe

1002. 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

1003. 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

1004. 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

1005. 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

1006. Economic Survey of United Kingdom, 2005

Publication Date:: 10-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The stability and resilience of the economy has been impressive and labour and product markets are among the most flexible in the OECD, but structural economic performance judged against a range of indicators can be further improved.
Topic:: Development, Economics, and Markets
Political Geography:: United Kingdom and Europe

1007. Economic Survey of Slovak Republic, 2005

Publication Date:: 09-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Sound macroeconomic policy, assertive product, capital and labour market liberalisation, and fundamental tax and welfare reform have transformed the Slovak business environment in recent years. Foreign direct investment (FDI) has responded particularly well, becoming the prime engine of capacity and productivity growth, and helping to put the economy on a strong and well-balanced growth path.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: Europe

1008. Economic Survey of Norway, 2005

Publication Date:: 08-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The Norwegian economy continues to recover strongly from its 2002-2003 slowdown. Low interest rates, competition induced productivity gains, high investments by the booming oil sector, terms-of-trade gains and supportive macroeconomic policies are the main drivers. Inflation is low and labour inputs in terms of hours worked are rising briskly. Strong growth is likely for the remainder of this year and possibly during 2006.
Topic:: Development, Economics, and Emerging Markets
Political Geography:: Europe and Norway

1009. Economic Survey of euro area, 2005

Publication Date:: 07-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Economic policy in the euro area pursues the objectives of achieving solid economic growth, a better performance of labour markets and restoring sound public finances in the context of a single monetary policy which aims at maintaining price stability. Although inflation has remained just above the ECB's definition of price stability, longer-term inflation expectations remain firmly anchored to price stability. However, progress towards the other goals has been disappointing thus far partly owing to adverse shocks such as higher oil prices or exchange rate shifts. On unchanged policies and with population ageing the euro area's potential output growth is set to decelerate over the next decades and eventually stabilises at around 1% per annum by about 2020, as illustrated in the following scenario:
Topic:: Development, Economics, and Government
Political Geography:: Europe

1010. Economic Survey of Greece, 2005

Publication Date:: 07-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Recent and prospective growth performance is good. The Greek economy has continued to grow vigorously, buoyed especially by low nominal and real interest rates and an expansionary fiscal policy stance, largely reflecting public works in preparation for the Olympic Games in 2004. The outlook is for some slowing activity in the near term, triggered by fiscal consolidation, but a subsequent pick-up in growth thereafter. However, inflation is likely to remain above the euro-area average, to a certain extent eroding Greece's international competitiveness. Fiscal consolidation is the main priority. The fiscal audit, performed by the new government in close collaboration with Eurostat has revealed a very loose fiscal policy since the late 1990s, culminating in a general government deficit of 6% of GDP in 2004. The government debt-to-GDP ratio has remained stubbornly above 100%, despite uninterrupted strong growth during the past eleven years. Reining in government deficits is of vital importance both to meet the fiscal objectives of EMU, and to prepare for demographically-related budget pressures that will start emerging in a decade's time. Moreover, sustained high public debt makes Greece relatively more vulnerable to changes in interest rates and market sentiment, while it's servicing threatens to crowd out public spending in areas important for Greece's ambitions to reach income levels elsewhere in the EU.
Topic:: Development, Economics, and Government
Political Geography:: Europe and Greece

1011. Economic Survey of France, 2005

Publication Date:: 06-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: France has high productivity per hour worked and a sophisticated social welfare system, but it also suffers from low labour force participation and high structural un employment. This poor labour market performance contributes to a persistent budget deficit which is exacerbating, rather than alleviating, the fiscal pressures arising from ageing. Rising public debt threatens fiscal sustainability. It is partly a result of insufficient public expenditure control an d insufficient public understanding of the need to meet long-run challenges as well as short-term targets. Aspects of the labour code designed to protect employees, and some aspects of the system of social transfers have had some unintended but perverse consequences leading to structurally high levels of unemployment and low participation rates. Dynamism and growth of activity and employment are held back by a lack of competition in a large number of service sectors.
Topic:: Development and Economics
Political Geography:: Europe and France

1012. Economic Survey of Sweden, 2005

Publication Date:: 06-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The Swedish economy has undergone impressive changes and has delivered a remarkable surge in productivity since the mid-1990s. Consequently, per capita incomes are slowly making up the ground lost in earlier decades. Labour market performance, however, has been less inspiring. Employment rates have yet to recover to their 1990 peaks and hours of work need to increase to support the welfare state.
Topic:: Development, Economics, and Government
Political Geography:: Europe and Sweden

1013. Economic Survey of Italy, 2005

Publication Date:: 05-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: A modest recovery is under way. A recovery has been under way since early 2004 and is expected to proceed at a moderate pace in 2005 and 2006, with domestic demand continuing to rise faster than GDP. Real growth is projected to remain somewhat slower than the EU average. The gap in consumer price inflation is expected to widen again in 2006. The current-account deficit has increased and export market share losses were substantial until recently. Employment growth has been impressive throughout the slowdown, but the growth of productivity, including that of total factor productivity, has been very weak.
Topic:: Development and Economics
Political Geography:: Europe and Italy

1014. Economic Survey of Spain, 2005

Publication Date:: 03-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The Spanish economy has enjoyed many years of brisk growth and has recovered swiftly from the recent international slowdown. Activity has been boosted by low interest rates and strong job creation, and underpinned by structural reforms and a sound fiscal policy. As a result, the income gap with the euro area steadily narrowed. However, tensions have arisen that could undermine the strong growth performance as inflation is relatively high, eroding competitiveness, while the surge in house prices does not yet show signs of abating. Also productivity gains have remained meagre and unemployment is still high.
Topic:: Economics, Government, and International Trade and Finance
Political Geography:: Europe and Spain

1015. Economic Survey of Belgium, 2005

Publication Date:: 03-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The dominant challenge for Belgium in the years to come is to prepare for population ageing. This entails putting in place policies to attenuate its effects on economic growth and public finances. The few years left before large numbers of baby boomers retire provide a window of opportunity to push ahead with such policies and so preserve the essential elements of the system of social protection. First, further budget consolidation is required to put public finances on a sustainable path. Second, reforms are needed to increase employment rates, especially for the older working age-population, school leavers and ethnic minorities, and to slow the decline in working time. Finally, reforms are required to raise productivity growth.
Topic:: Development, Economics, and Government
Political Geography:: Europe

1016. Economic Survey of Denmark, 2005

Publication Date:: 02-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Denmark has been near the top of the OECD's income rankings for many years. It has the most equal income distribution among member countries, partly because of its comprehensive welfare state. Given an ageing population, the key economic challenge is to maintain growth in living standards while preserving the welfare system. To achieve this, Denmark will need to raise labour supply and productivity growth. If they do not improve from here, the growth rate of per capita GDP will be dragged down to just ½ per cent per annum within a couple of decades.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: Europe and Denmark

1017. Economic Survey of Iceland, 2005

Publication Date:: 02-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Iceland's impressive economic performance has continued to show the benefits of the refocusing of policies on financial stabilisation and market liberalisation in the 1990s. The most recent recovery, which began in 2003, has been much more vigorous than expected, as buoyant household demand has reinforced the stimulatory effect of the large-scale aluminium-related investment projects underway. Imbalances in the economy – specifically, the large current account deficit and inflation pressures – have mounted and – with GDP growth averaging over 5% in 2004-06 – they may well be similar in size to those seen in the last overheating episode in 2000-01, which resulted in a mild recession. Limiting instability over the next few years is a demanding task for macroeconomic policymakers, and efforts underway in this regard need to be strengthened. There are also challenges for structural policies, notably with respect to the proper assessment of future investment projects and in the environ-mental area. In a longer-term perspective, sustaining the faster productivity growth that structural reforms in the 1990s have brought about will require further action, especially in the education and competition policy fields.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: Europe

1018. (Danish) Economic Survey Denmark 2005

Publication Date:: 02-2005
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Danmark har i mange år ligget nær toppen på OECD's rangliste over BNP pr. indbygger. Danmark har den mest lige indkomstfordeling blandt medlemslandene, delvist so m følge af dets vidtfavnende velfærdsstat. I lyset af befolkningsaldringen er den primære økonomiske udfordring at fastholde væksten i levestandarden og samtidig bevare velfærdssystemet. For at opnå dette er det nødvendigt at øge arbejdsudbuddet og væksten i produktiviteten. Uden forbedringer på disse to områder vil væksten i BNP pr. indbygger fa lde til blot ½ procent om året i løbet af et par årtier.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: Europe and Denmark

1019. 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

1020. 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

1021. 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

1022. 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

1023. 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

1024. 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

1025. Political Conditionality of Economic Interactions in the Middle East; Turkey's Relations with Iran, Iraq, and Syria

Author:: Mustafa Aydin and Damla Aras
Publication Date:: 06-2004
Content Type:: Journal Article
Journal:: Uluslararasi Iliskiler
Institution:: Uluslararasi Iliskiler
Abstract:: The political logic (i.e., political perceptions of the ruling elite in a given country and nature of the political relations with other countries) determines economic activity, not the other way around, among the proto-capitalist states of the Middle East. As the political ties has primacy in the region in determining the course of economic relations, even market oriented democratic (or quasi-democratic) countries have to accept the prominence of political-strategic relations when dealing with such states. This paper will examine the interrelated fluctuation of trade and political tensions between Turkey and its immediate Middle Eastern neighbours - Iran, Iraq, and Syria. It will highlight the political determinants of the relationship between these countries; will discuss the role of the US as the independent variable; and will assess the possible effects of the emergence of Justice and Development Party government in Turkey on country's political and economic relations with its Middle Eastern neighbours.
Topic:: International Relations, Economics, and International Political Economy
Political Geography:: United States, Iraq, Europe, Iran, Turkey, Middle East, and Syria

1026. 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

1027. 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

1028. 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

1029. 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

1030. 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

1031. 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

1032. 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

1033. 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

1034. 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

1035. 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

1036. 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

1037. 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

1038. Can Europe deliver growth? The Sapir Report and Beyond

Author:: Jean-Pierre Casey and Jacques Pelkmans
Publication Date:: 01-2004
Content Type:: Policy Brief
Institution:: Centre for European Policy Studies (CEPS)
Abstract:: The SAPIR report (Sapir et al., 2003) is important for Europe. The justification of and search for higher economic growth in the EU ought to be on the very top of the EU agenda everywhere. Offering a very rich and useful survey of many issues related to European growth, or indeed the lack of it, the report's analysis is insightful and should be compulsory reading for policy-makers and political leaders. Sapir et al.'s policy recommendations are numerous and rightly touch economic as well as institutional aspects at EU level.
Topic:: Economics and International Trade and Finance
Political Geography:: Europe

1039. The Transatlantic Economy in 2020: A Partnership for the Future?

Author:: Frances G. Burwell, W. Bowman Cutter, Paula Stern, and Peter S. Rashish
Publication Date:: 11-2004
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The United States and the European Union maintain the world's largest and most significant economic relationship, which in turn is a foundation supporting the transatlantic political partnership. By some estimates, the transatlantic economy — including two-way trade and foreign affiliate sales — totals $2.5 trillion and is responsible for 14 million jobs in the United States and Europe. It is not just the scale of the transactions, however; the transatlantic economy is deeply interconnected through impressive levels of foreign direct investment in both directions. Together, the United States and the EU have been key players in managing the global economy through the World Trade Organization, World Bank, and International Monetary Fund. They have been responsible for the major accomplishments in international trade liberalization of the last 40 years, and have spurred the adoption of global standards in a wide range of sectors.
Topic:: Economics, International Cooperation, and International Trade and Finance
Political Geography:: United States and Europe

1040. Do Economic Sanctions Work? Lessons from ILSA Other Sanctions Regimes

Author:: Stuart E. Eizenstat
Publication Date:: 04-2004
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The 1990s saw a cascade of contentious sanctions legislation. Congress passed the Antiterrorism and Effective Death Penalty Act of 1996, including an amendment to the Sovereign Immunities Act, which permits lawsuits against governments on the terrorism list – a major step in denying foreign governments normal immunity from suit in U.S. courts. The Iran–Libya Sanctions Act (ILSA) was also passed in 1996, with the goal of discouraging third–country companies from investing in Iran or Libya. This sparked outrage from European countries, which objected to the act's “extra–territorial” reach, and from the European Union (EU) institutionally, which responded with a law barring any European company from complying with the legislation (and with similar provisions regarding Cuban trade under the controversial Helms–Burton Act).
Topic:: International Relations, Economics, and Terrorism
Political Geography:: United States and Europe

1041. 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

1042. 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

1043. 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

1044. 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

1045. 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

1046. 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

1047. 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

1048. 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

1049. 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

1050. 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

1051. 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

1052. 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

1053. 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

1054. 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

1055. 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

1056. 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

1057. 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

1058. 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

1059. 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

1060. Economic Survey of the Czech Republic, 2004

Publication Date:: 11-2004
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Following accession to the European Union the big issue for the Czech Republic is to strengthen growth prospects. Growth potential at present is somewhat above 3 per cent, implying a moderate pace of catch-up to living standards in the EU and elsewhere. There is room for greater ambition in growth performance, and it is welcome to see this reflected in the programme of the new Czech government. This Survey underscores four main challenges. Fiscal consolidation is the dominant challenge for macroeconomic policy, and is not only necessary to cope with ageing and to bring down the tax burden but is also needed to fulfil euro-area entry conditions. A welcome programme of fiscal reform has begun, including proposals for a system of multi-year aggregate spending ceilings and significant expenditure cuts. However, to date, mainly revenue-raising measures have been implemented while the full impact of expenditure measures is yet to be realised. The attempt to secure broad political consensus on pension reform is commendable, but it must be underscored that whatever reform is finally implemented, it will have to bring considerable fiscal savings. Health-care reform also has to deliver savings, but concrete proposals have yet to be made. To facilitate assessment of the true fiscal position, extra-budgetary funds need to be more fully integrated in mainstream government budgeting procedures. Also, with the further decentralisation of public services, the need for good budgeting practices and accountability in regional and municipal governments is all the more important. The Central Bank and the Ministry of Finance have formulated a transparent strategy for entering the euro area, that foresees minimising the time spent in ERM II. Annual reports will assess the economic conditions in relation to the Maastricht Criteria and a request to enter ERM II will only being made if the probability of a positive first assessment by the EU authorities is high. The choice of a 3 per cent inflation target for the run-up to euro entry is justifiable on medium-term grounds. However there may be some difficulty communicating the consistency of this target with the Maastricht criterion for price stability. The Czech authorities should therefore pay close attention to how the Maastricht criteria are interpreted and applied by the European Commission and the ECB and adjust their communication strategy accordingly. Most of the catch-up in living standards will have to come from boosting productivity growth. This means swifter re-allocation of resources across firms as well as stronger in-firm productivity growth. While the Czech Republic is a strong competitor for attracting foreign direct investment, policy towards poorly performing firms and business start-ups has problems, slowing down the exit and entry of firms. Bankruptcy procedures are cumbersome, often long and usually end up in liquidation, with asset stripping not uncommon. Reforms have long-since been planned, and it is welcome that new legislation looks finally set to go ahead. The legislation aims at strengthening the role of creditors, speeding up proceedings and allowing composition to play a bigger role. Likewise, efforts to streamline business registration are welcome and should be implemented as soon as possible. The general business climate is also damaged by issues in network industry competition, as some services, notably internet, are expensive in international comparison. Mobility between jobs and regions is weak. Administrative extensions of collective wage agreements, strict employment protection legislation (EPL) on individual dismissals, rent control, severe poverty traps (particularly for families) and a high tax wedge have contributed to considerable long-term unemployment. The Roma population is hit especially hard in this respect. Migration is to some extent mitigating the labour-market rigidities with Slovaks filling skilled vacancies and other eastern Europeans (mainly Ukrainians) taking up unskilled jobs that are unattractive for locals. Tackling the unemployment problem requires measures across a wide front, but most notably social benefit reform is needed along with reduction in the tax wedge as well as easing of EPL. The widespread social and economic exclusion of the Roma needs more attention, particularly in the education system. A more open immigration policy is needed to address immediate issues such as the inconsistency between granting work permits as well as for better alignment of immigrants' skills with those needed on the Czech labour market.
Topic:: Economics and International Trade and Finance
Political Geography:: Europe, Ukraine, and Czech Republic

1061. Economic Survey of Finland, 2004

Publication Date:: 10-2004
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The transformation of the Finnish economy over the last decade represents one of the few examples of the "new economy" taking hold in Europe. Output and productivity growth over the second half of the 1990s was among the highest in the OECD, and the recovery from the global downturn has been much stronger than for the euro area as a whole. However, imminent population ageing threatens to expose weaknesses in the labour market. Demographic developments, which over past decades have been broadly neutral, could reduce the growth rate of GDP per capita by 1/4 of a percentage point per annum over the remainder of this decade and by almost 1 percentage point over the next decade. This, combined with the likelihood of smaller productivity gains in the information and communication technology (ICT) sector, a continuation of falling ICT prices as well as the mediocre performance in the sheltered sectors, threatens the future growth of living standards. Within a decade, and in the absence of further policy changes, these developments together could imply that Finland not only loses its top performer status but could face a protracted period of slow growth, as illustrated in the following scenario.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: Europe

1062. Employment Protection: Costs and Benefits of Greater Job Security

Publication Date:: 09-2004
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Deregulating labour markets – for example making it easier for firms to hire and fire employees – is at the heart of the employment debate in many OECD countries. Laws on firing or layoffs and other employment protection regulations are thought by many to be a key factor in generating labour market "rigidity", as well as one reason for the large differences in labour market performance among OECD countries, notably between the United States and some of the larger European countries.
Topic:: Civil Society, Development, Economics, and Government
Political Geography:: Europe

1063. Economic Survey of Portugal, 2004

Publication Date:: 09-2004
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Convergence of the Portuguese economy toward the more advanced OECD economies seems to have halted in recent years, leaving a significant gap in per capita incomes. The proximate cause is low labour productivity, as employment rates across the board are substantially higher than the EU average. Nor is there a shortage of capital goods in aggregate. But capital equipment in the business sector is not always efficiently used or allocated, and new technologies are not readily adopted. Furthermore, the Portuguese labour force – even its younger members – have had less formal education than workers in other EU countries, including among the new entrants from Central and Eastern Europe, and workers in Portugal also have less access to training than in many other countries. Traditional Portuguese low value-added highly labourintensive products now face increasing competition from developing countries and from the new EU entrants.
Topic:: Development, Economics, and Government
Political Geography:: Europe and Eastern Europe

1064. Economic Survey of Germany, 2004

Publication Date:: 08-2004
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: With the effects of adverse external shocks diminishing, a strong and competitive export industry is helping the German economy out of a three-year period of near stagnation. Domestic demand has been declining over the last couple of years, as poor labour market performance has weighed on consumer sentiment and business confidence. The labour market still suffers from weak economic growth and distorted incentives, with both contributing to problems in taking up work and providing employment. Productivity growth is not high enough to compensate for the adverse effect of low labour utilization on economic growth. Fiscal targets have been missed on account of both cyclical and structural factors. The government has launched a major reform initiative to reinvigorate economic growth. These reforms are welcome, have to be continued and need to be broadened further to reduce government debt, remove fiscal distortions, and improve incentives to supply and demand labour. Furthermore, there remains considerable scope to foster the creation of new enterprises and widen product market competition, thereby also maintaining the strong innovative capacity of the economy. The major challenges are to link fiscal consolidation to public sector reform and to increase the capacity of the economy to create employment and increase productivity growth. To create confidence and to restore Germany's traditional economic strength it is necessary that reforms reflect a coherent vision about the reorientation of economic policy – combining a growth and stability oriented macroeconomic policy with structural reforms – and are implemented according to a transparent and predictable roadmap.
Topic:: Development, Economics, and Industrial Policy
Political Geography:: Europe and Germany

1065. Economic Survey of Poland, 2004

Publication Date:: 06-2004
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: Poland has made impressive progress in the transformation of its economy and the accession to the European Union on 1st May 2004 marks another historical event. It follows 15 years of profound change and accomplishment. More than 75 per cent of GDP is now produced in the private sector, the economy is well integrated with those of western European nations and inflation has been brought down to low levels. After an initial fall, output has been growing continuously for more than 10 years and, on average, Poles are much better off now than they were then. However, the striking drop in employment since 1998 is suggestive of serious remaining problems. To address these, much more needs to be done, notably in terms of raising productivity, expanding employment and increasing per capita income, which is 41 per cent of OECD levels.
Topic:: Development and Economics
Political Geography:: Europe and Poland

1066. Economic Survey of the Netherlands, 2004

Publication Date:: 05-2004
Content Type:: Policy Brief
Institution:: The Organisation for Economic Co-operation and Development
Abstract:: The economic downturn in the Netherlands, like the boom that preceded it, has been more marked than in most other European countries. This is partly attributable to greater exposure to international trade, especially with the US, and to greater sensitivity to international stock price movements. But there are also some structural policies – pension fund regulation, housing and wage setting institutions – that have undermined economic efficiency and contributed to the amplitude of the cycle. Furthermore there has been a marked deterioration in public finances, part of which is structural. Longer term growth trends too are unfavourable. In view of these developments, the main challenges are to reform those policies that have reduced efficiency and increased volatility, put public finances on a sustainable path, and, most importantly, increase trend growth by increasing both employment and productivity.
Topic:: Agriculture, Economics, Environment, Human Rights, International Organization, and Political Economy
Political Geography:: Europe and Netherlands

1067. Financial Conglomerates: The Future of Finance?

Author:: Robert Litan and Richard Herring
Publication Date:: 04-2003
Content Type:: Policy Brief
Institution:: The Brookings Institution
Abstract:: In 1999, after nearly twenty years of debate, the U.S. Congress finally passed legislation permitting bank affiliations with all sorts of other financial enterprises, and vice versa. In this step, the United States joined many other countries — especially in Europe and, more recently, Japan — in allowing the operation of financial conglomerates. But are financial conglomerates the wave of the future in finance? And if so, how are they to be regulated? These were the two central questions addressed in the fifth annual conference of the Brookings-Wharton Papers on Financial Services, an annual volume published by the Brookings Institution Press. The conference, held in October 2002 in Washington, D.C., convened financial services experts from around the world. The papers presented at the conference suggest, generally, that while the future may see more financial conglomerate activity than it has in the past, there still will be a role for specialist, or "monoline" financial companies. As for regulation, there is no settled model: some nations will pursue consolidated supervision, with authority over entire conglomerates vested in a single authority (often the central bank), while others will still regulate the pieces of diversified financial enterprises along structural lines.
Topic:: Economics, Government, Industrial Policy, and International Trade and Finance
Political Geography:: United States, Europe, and Washington

1068. 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

1069. Making Money: Political Development, the Greenback, and the Euro

Author:: Kathleen R. McNamara
Publication Date:: 10-2003
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: The creation of Economic and Monetary Union (EMU) in Europe challenges much of what we have come to take for granted about states and the components of sovereignty. What does the willingness of twelve European Union (EU) members to abandon their own currencies mean for the nation-states of Europe? Does the Euro automatically imply further political development at the EU level? To address these questions, this paper parses out the role that national currencies play in statebuilding with reference to the nineteenth century American experience. Just as US federal authorities engaged in a political project to wrest control over money from subnational authorities to the center and unify the currency, so have the dynamics of currency unification in the EU involved important conflicts over the location of the legitimate exercise of control and rule. In particular, I highlight the role of war and market integration in prompting currency consolidation, and the importance of linkages between money and fiscal capacity for statebuilding, and apply the analytical lessons learned from the US experience to the case of the Euro.
Topic:: Development and Economics
Political Geography:: United States and Europe

1070. Institutions for Fiscal Stability

Author:: Barry Eichengreen, George C. Pardee, and Helen N. Pardee
Publication Date:: 10-2003
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: This paper reviews the controversy over Europe's Stability and Growth Pact and offers a proposal for its reform. It argues that Europe would be best served by focusing on the fundamental causes of unsustainable debts — public enterprises that are too big to fail, unfunded public pension schemes that are too big to ignore, inefficient and costly labor market and social welfare problems, and budget making institutions that create common pool and free-rider problems — rather than on arbitrary numerical indicators like whether the budget deficit is above or below 3 per cent of GDP. It proposes defining an index of institutional reform with, say, a point each for reform of budget making arrangements, reform of public pension schemes, and reform of labor markets and unemployment insurance. Countries receiving three points would be exempt from the Pact's numerical guidelines, since there is no reason to think that they will be prone to chronic deficits. The others, whose weak institutions render them susceptible to chronic deficits, would in contrast still be subject to its warnings, sanctions and fines.
Topic:: Conflict Resolution, Debt, and Economics
Political Geography:: Europe

1071. The Accession Economies' Rocky Road to the Euro

Author:: Barry Eichengreen, George C. Pardee, and Helen N. Pardee
Publication Date:: 11-2003
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: Now that the decision has been taken to admit to the European Union eight of what were once called the transition economies, attention has naturally turned to whether these countries should also join Europe's monetary union. But where is a consensus that joining the EU, while posing certain difficulties, will be a source of net benefits, there is no such consensus about the adoption of the euro. In part this uncertainty reflects the unusual difficulty that monetary economists have in translating theory into policy. We specialists, in other words, cannot even agree amongst ourselves.
Topic:: Economics, International Trade and Finance, and Regional Cooperation
Political Geography:: Europe

1072. The Euro Through a Glass Darkly

Author:: Barry Eichengreen
Publication Date:: 09-2003
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: On January 1st, Europe's monetary union will celebrate its fifth anniversary. Congratulations are not exactly pouring in. For going on two years, growth in the countries of the Euro Area has been significantly slower than in the United States. Unemployment over much of the continent remains disturbingly high. The single currency has not been a tonic for Europe's stagnant economy. To the contrary, numerous critics complain, the advent of the euro has only compounded Europe's economic problems. This paper provides a review and analysis of the debate.
Topic:: Economics and Political Economy
Political Geography:: United States and Europe

1073. Institutions for Fiscal Stability (Europe's Stability and Growth Pact)

Author:: Barry Eichengreen
Publication Date:: 05-2003
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: This paper reviews the controversy over Europe's Stability and Growth Pact and offers a proposal for its reform. It argues that Europe would be best served by focusing on the fundamental problems for fiscal policy — public enterprises that are too big to fail, unfunded public pension schemes that are too big to ignore, inefficient and costly labor market and social welfare problems, and budget making institutions that create common pool and free-rider problems — rather than on arbitrary numerical indicators like whether the budget deficit is above or below 3 per cent of GDP. It proposes defining an index of institutional reform with, say, a point for pension reform, a point for labor market reform, and a point for revenue sharing reform. Countries receiving three points would be exempt from the Pact's numerical guidelines, since there is no reason to think that they will be prone to chronic deficits. The others, whose weak institutions render them susceptible to chronic deficits, would in contrast still be subject to its warnings, sanctions and fines.
Topic:: Economics and Political Economy
Political Geography:: Europe

1074. Whither Europe?

Author:: Barry Eichengreen
Publication Date:: 05-2003
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: Where I live, on the West Coast of the United States, and teach, at the University of California, Europe seems far away. Geographically we are closer to Latin America and Asia. Ethnically, Californians of Hispanic and Asian-American descent are increasingly numerous. Within 20 years, residents of European origin will be a minority; already they are a minority of the undergraduates enrolling at Berkeley. Economically as well, we look to Asia. It is in California where the largest number of container ships arriving from Asia are unloaded, and it is across the Pacific, and in China in particular, that most of those containers originate.
Topic:: Economics and Political Economy
Political Geography:: United States, China, Europe, Asia, California, and Latin America

1075. Institutions for Fiscal Stability (Financial Integration in Europe and Asia)

Author:: Barry Eichengreen and Yung Chul Park
Publication Date:: 01-2003
Content Type:: Working Paper
Institution:: Institute of European Studies (IES), UC Berkeley
Abstract:: One of the most striking aspects of Europe's recent development has been the growth and integration of financial markets. Bond markets have grown explosively since the advent of the euro. Cross border transactions in government bonds have risen sharply with the emergence of the German bund as a benchmark asset, while the volume of corporate bond issues has grown even more dramatically. Securities markets are consolidating around London and Frankfurt, which are competing for the mantle of Europe's dominant financial center. This rapid market integration has raised questions about the viability of Europe's traditional model of bank-based financial intermediation, causing commercial and investment banks to respond with a wave of mergers and acquisitions.
Topic:: Economics and Political Economy
Political Geography:: Europe, Asia, London, and Germany

1076. The Politics of the German Company Network

Author:: Martin Höpner and Lothar Krempel
Publication Date:: 09-2003
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: For over 100 years, the German company network was a major feature of organized corporate governance in Germany. This paper uses network visualization techniques and qualitative-historical analysis to discuss the structure, origins and development of this network and to analyze the reasons for its recent erosion. Network visualization makes it possible to identify crucial entanglement patterns that can be traced back historically. In three phases of network formation – the 1880s, 1920s and the 1950s –, capital entanglement resulted from the interplay of company behavior and government policy. In its heyday, the company network was de facto encompassing and provided its core participants, especially the banks, with a national, macroeconomic perspective. In the 1970s, a process of increased competition among financial companies set in. In the 1980s and 1990s, declining returns from blockholding and increased opportunity costs made network dissolution a thinkable option for companies. Because of the strategic reorientation of the largest banks toward investment banking, ties between banks and industry underwent functional changes. Since the year 2000, the German government's tax policy has sped up network erosion. Vanishing capital ties imply a declining degree of strategic coordination among large German companies.
Topic:: Economics, Government, and Governance
Political Geography:: Europe and Germany

1077. Stabilizing Postwar Europe: Aligning Domestic and International Goals

Author:: Armin Schäfer
Publication Date:: 07-2003
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: This paper looks at the historical developments that led to the Schuman Plan in 1950, which today is seen as a starting signal for the European integration process. It argues that this announcement by the French foreign minister constituted a genuine change of strategy that can only be understood in the light of the preceding historical chain of events. The first steps of European integration were part of a search for suitable institutions capable of dealing with Europe's economic and political problems, which also involved the Bretton Woods institutions, Marshall Aid and the OEEC, and, finally, the ECSC. These organizations' respective fate depended on the strategies of key states, which in turn were driven by domestic concerns. Aligning their interests took several steps and was only completed when all three organizations existed in parallel. Throughout this process, all states had to abandon their preferred course of action and learn to settle for second best.
Topic:: Civil Society, Economics, Government, and International Trade and Finance
Political Geography:: Europe

1078. A Comparative Study of Business Lobbying in the European Parliament, the European Commission and the Council of Ministers

Author:: Pieter Bouwen
Publication Date:: 04-2003
Content Type:: Working Paper
Institution:: Max Planck Institute for the Study of Societies
Abstract:: The aim of this paper is to empirically test a theory of access that investigates the logic behind the apparent ad hoc lobbying behavior of business interests in the EU multi-level system. First, I propose the theoretical framework that attempts to explain the access of different organizational forms of business interest representation (companies, associations and consultants) to the European Commission, the European Parliament and the Council of Ministers. The degree of access to these institutions is explained in terms of a theory of supply and demand of access goods. Access goods concern information that is crucial in the EU policy-making process. In return for access to an EU institution, business interests have to provide the access good(s) demanded by that institution. I then derive a number of specific hypotheses about the access of the aforementioned organizational forms. These hypotheses are analyzed in an extensive empirical study of the EU financial services sector. On the basis of 126 exploratory and semi-structured interviews the hypotheses are checked across the three EU institutions.
Topic:: Economics, Human Welfare, and International Trade and Finance
Political Geography:: Europe

1079. A Decomposition Analysis of Regional Poverty in Russia

Author:: Anthony Shorrocks and Stanislav Kolenikov
Publication Date:: 10-2003
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper applies a new decomposition technique to the study of variations in poverty across the regions of Russia. The procedure, which is based on the Shapley value in cooperative game theory, allows the deviation in regional poverty levels from the all- Russia average to be attributed to three proximate sources; mean income per capita, inequality, and local prices. Contrary to expectation, regional poverty variations turn out to be due more to differences in inequality across regions than to differences in real income per capita. However, when real income per capita is split into nominal income and price components, differences in nominal incomes emerge as more important than either inequality or price effects for the majority of regions.
Topic:: Economics and Poverty
Political Geography:: Russia, Europe, and Asia

1080. Quo Vadis? Inequality and Poverty Dynamics across Russian Regions

Author:: Ruslan Yemtsov
Publication Date:: 09-2003
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper analyses regional data on inequality and poverty in Russia during 1994-2000 using published series from the regionally representative Household Budget Survey. The paper finds that the share of inequality in Russia coming from the between-regions component is large (close to a third of the total inequality), growing, and accounts for most of the increase in national inequality over 1994-2000. The paper demonstrates an absence of interregional convergence in incomes across Russian regions using various techniques. On the other hand, the paper finds evidence of convergence in inequality within regions, trended towards an internationally high level. Based on these two findings, the paper projects dynamics of inequality and poverty in Russia over a ten-year time horizon. The projections show that if the observed trend continues, by 2010 the absolute majority of Russia's poor will be concentrated in a few permanently impoverished regions, while relatively more affluent regions will become virtually free of poverty. Finally, the paper relates fluctuations in inequality within regions to a set of factors classified into four broad categories: endowments and initial conditions, preferences, policies, and shocks. Among these factors short-run fluctuations of the unemployment rate are revealed as significant and strong signals of inequality.
Topic:: Demographics, Economics, and Poverty
Political Geography:: Russia, Europe, and Asia

1081. Regional Output Differences in International Perspective

Author:: Alan Heston and Bettina Aten
Publication Date:: 08-2003
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: Accurate regional estimates of output are desired as an indicator of level of development and as a variable used to explain internal migration, demand patterns, fertility and other aspects of behaviour. This chapter explores one often neglected aspect of regional income differences, namely that due to price differences or regional purchasing power parities. When nominal regional income measures are adjusted for these price level differences they are termed real regional incomes. The preferred method of estimating regional purchasing power parities by detailed price comparisons is discussed for Brazil, the United States and the European Union. The empirical thrust of the chapter is an investigation of different methods for estimating regional real incomes based on PPP data for 167 countries and nominal regional incomes and other data for about 870 administrative areas at the subnational level. Even in their present form we believe the real income estimates provided for the geographical units present opportunities for understanding the world economic structure.
Topic:: Development, Economics, and International Trade and Finance
Political Geography:: United States, Europe, and Brazil

1082. Economic Integration and Migration: The Mexico-US Case

Author:: Philip Martin
Publication Date:: 04-2003
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: This paper explains the evolution and effects of Mexico-US migration, and highlights the NAFTA approach to economic integration, viz., free up trade and investment while stepping up efforts to prevent unauthorized migration. The European Union approach is different: provide aid first, and later free up trade and migration in the expectation that moves toward convergence will ensure minimal migration because trade has become a substitute for migration. The paper concludes that NAFTA will reduce unwanted Mexico-US migration in the medium to long term, and that different initial conditions in Europe mean that there will be relatively little east-west migration when nationals of new entrant EU members achieve freedom of movement.
Topic:: Economics and Migration
Political Geography:: United States, Europe, and Mexico

1083. Social and Economic Decline as Factors in Conflict in the Caucasus

Author:: Svetlana Glinkina and Dorothy Rosenberg
Publication Date:: 02-2003
Content Type:: Working Paper
Institution:: United Nations University
Abstract:: We argue that the conflicts in the Caucasus are the result of the abrogation by the elite of the earlier, Soviet era, social contract. This process was accompanied by the collapse of the formal economy; evidenced by huge national income compression, falling public goods provision, and growing inequality and poverty. In the absence of state provision of basic amenities and governance, ordinary people are compelled to fall back on kinship ties. Declining standards of governance facilitate state-sponsored corruption and criminality in a setting where the shadow economic activity is increasingly important to individual survival strategies. Oil pipelines and the right to control the transit of goods both legal and illegal also underlie conflict in the region. Criminality has replaced ethnicity as the major motivation for conflict and conflict per se has become a lucrative source of income.
Topic:: Economics, Ethnic Conflict, and Poverty
Political Geography:: Russia, Europe, Asia, and Soviet Union

1084. EU-U.S. Relations beyond Iraq: Setting the Terms of Complementarity

Author:: Simon Serfaty
Publication Date:: 04-2003
Content Type:: Policy Brief
Institution:: Center for Strategic and International Studies
Abstract:: The North Atlantic Treaty Organization (NATO) and the European Union (EU) have been significant institutional casualties of the war in Iraq. European heads of state and government who joined the coalition of the willing organized by President George W. Bush (with a decisive assist from Prime Minister Tony Blair) often did so in spite of significant opposition from their general public. States that gathered, vocally or passively, in the coalition of the unwilling (and even resentful) organized by President Jacques Chirac (with a decisive assist from Chancellor Gerhard Schroeder) did so at the expense of a Euro-Atlantic structure within which the states of Europe have gained unprecedented security, stability, and prosperity. As the first phase of the coalition's military action in Iraq comes to an end, the prevailing view in the United States is that the EU is a troubled and troubling union: troubled in terms of its internal divisions, and troubling in terms of the motivation that seems to underline the actions of its older members. As for NATO, the prevailing view is that it is a fading organization with a blocking minority of members who are not only unwilling but also broadly incapable and frankly irrelevant.
Topic:: Economics and Politics
Political Geography:: United States, Europe, and Middle East

1085. The Future of the Transatlantic Defense Community

Author:: Felix G. Rohatyn and Jean-Paul Béchat
Publication Date:: 02-2003
Content Type:: Policy Brief
Institution:: Center for Strategic and International Studies
Abstract:: On January 24, 2003, the CSIS Commission on Transatlantic Security and Industrial Cooperation in the Twenty-First Century, under the leadership of CSIS president and CEO John J. Hamre, released its final report, The Future of the Transatlantic Defense Community. Cochaired by Jean-Paul Béchat, chairman and CEO of SNECMA and president (in 2001-2002) of the European Association of Aerospace Industries (AECMA), and former U. S. ambassador to France Felix G. Rohatyn, this Commission consisted of 22 senior business leaders and former policymakers from both sides of the Atlantic. An Experts Group, directed by CSIS Europe Program director Simon Serfaty and composed of several representatives from the private and public sectors and academia, assisted the Commission in its work.
Topic:: Economics and Politics
Political Geography:: United States, Europe, and Middle East

1086. Fundusz Mikro An Experiment In Partnership–Based Microfinance 1998 – 2002.

Author:: Witold Szwajkowski
Publication Date:: 10-2003
Content Type:: Working Paper
Institution:: Aspen Institute
Abstract:: Fundusz Mikro's evolution has to be understood in the context of Poland's emergence from communism during the 1990s. For businesses, the challenge of that time was not merely to learn new skills, but to unlearn old habits and attitudes while at the same time taking on new ones appropriate to a market economy. Because of this shift, Fundusz Mikro (FM) found that it had to do more than lend money; it had to learn to play a more pro-active role in changing the culture in which business took place. The financial crisis of1998 and the harder economic times since then were an added incentive for FM to adapt its approach, products, and finally its mission.
Topic:: Economics, Emerging Markets, and International Trade and Finance
Political Geography:: Europe and Poland

1087. Does venture capital investment spur employment growth?

Author:: Ansgar Belke, Rainer Fehn, and Neil Foster
Publication Date:: 12-2003
Content Type:: Working Paper
Institution:: Centre for European Policy Studies (CEPS)
Abstract:: Anglo-Saxon countries have been successful in the 1990s concerning labour market performance compared to the former role models of Germany and Japan. This reversal in relative economic performance might be related to idiosyncracies in financial markets, with bank-based financial markets as in Germany and Japan being possibly inferior to stock-market based financial markets in turbulent times and when approaching the economic frontier. A cleavage is related to venture capital markets which are flourishing in Anglo-Saxon but not in German-type financial markets. Venture capital is crucial for financing structural change, new firms and innovations and therefore possibly also nowadays for employment growth.
Topic:: Economics and International Trade and Finance
Political Geography:: Japan, Europe, and Germany

1088. Fiscal Policy in the New Open Economy Macroeconomics and Prospects for Fiscal Policy, Coordination

Author:: Leonor Coutinho
Publication Date:: 06-2003
Content Type:: Working Paper
Institution:: Centre for European Policy Studies (CEPS)
Abstract:: This paper reviews the analysis of fiscal policy in the new open economy macro-economics literature, in view of increasing interest in the question of transmission and coordination of policies across countries, stirred by developments in this literature and by the formation of the euro area. The analysis focuses on two main points: (i) the identification of welfare spillover effects to third countries; and (ii) the assessments made so far of the potential gains from pursuing non-cooperative and cooperative fiscal stabilisation policies. Regarding welfare spillovers, some additional results are derived to examine whether the exchange rate regime (flexible or fixed) matters for the size of these spillovers, and whether the type of policy pursued (balanced-budget or debt-financed) matters. Fixed exchange rates only seem to postpone the costs from the short to the long run, but the type of policy is crucial in determining the welfare impact of fiscal expansions. With respect to policy coordination, attention is drawn to the need to reflect on a potential role for fiscal policy as a stabilisation tool, and on possible interactions between fiscal and monetary policy.
Topic:: Economics and International Political Economy
Political Geography:: Europe

1089. The Civil False Claims Act: Using Lincoln's Law to Protect the European Community Budget

Author:: Alan Riley
Publication Date:: 11-2003
Content Type:: Policy Brief
Institution:: Centre for European Policy Studies (CEPS)
Abstract:: This paper argues that the US Civil False Claims Act of 1986 (hereafter CFCA) could provide the European Community with a means to effectively protect the largely decentralised revenue collection and expenditure of the Community bud get. It also offers a solution to the difficulty of creating an effective means of investigation and penalisation of cross-border fraud without having to create a Community criminal law or a European Public Prosecutor.
Topic:: Economics and International Trade and Finance
Political Geography:: Europe

1090. EU Accession and the Euro: Close Together or Far Apart?

Author:: Peter B. Kenen and Ellen E. Meade
Publication Date:: 10-2003
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: In May 2004, ten countries are due to join the European Union. They are therefore obliged to join the European Monetary Union (EMU) and adopt the euro as their national currency. Most of them, moreover, have been eager to do that. None of them sought an opt-out of the sort that Britain and Denmark obtained in 1991, when the Maastricht Treaty was drafted. Membership in EMU is not automatic, however, because the accession countries must first satisfy the preconditions contained in the Maastricht Treaty. Although those preconditions are rigorous, and some of the accession countries are still far from meeting them, most of those countries have indicated that they want to enter EMU at the earliest possible date.
Topic:: Economics and International Trade and Finance
Political Geography:: Britain, Europe, and Denmark

1091. Innovation and Social Capital in Silicon Valley

Author:: Martin Kenney and Donald Patton
Publication Date:: 07-2003
Content Type:: Working Paper
Institution:: Berkeley Roundtable on the International Economy
Abstract:: The high cost regions of Europe, North America, and Japan recognize that the key to their economic vitality is innovation. Increasingly, many also accept that the primary units of competition based on high quality, innovative products are not nations, but firms within regions, some of which occasionally bridge national boundaries. This has resulted in a significant increase in interest in the nature and functioning of such regional economies, variously known as clusters or industrial districts.
Topic:: Economics and International Trade and Finance
Political Geography:: United States, Europe, Israel, East Asia, and North America

1092. Hard and soft economic policy coordination under EMU: problems, paradoxes and prospects

Author:: Iain Begg
Publication Date:: 07-2003
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: Although the launch of the euro went better than many expected, sluggish growth, persistent unemployment and growing disenchantment with key elements of the economic governance system have led to demands for change, especially in policy coordination. This paper examines the criticisms of economic policy in the EU and the mechanisms through which it is coordinated, and considers how the EMU policy system might be reformed. It points to problems and paradoxes in the way economic governance operates, notably those surrounding its ability to deliver a coherent policy mix that brings together monetary fiscal and supply-side policies. The paper concludes with a discussion of whether gouvernment économique might offer a way forward.
Topic:: Economics and International Political Economy
Political Geography:: Europe

1093. Labor Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence

Author:: Dean Baker, John Schmitt, and Andrew Glyn
Publication Date:: 05-2003
Content Type:: Working Paper
Institution:: Minda de Gunzburg Center for European Studies, Harvard University
Abstract:: In the last twenty five years, there has been a sharp divergence in trends in the unemployment rate among OECD countries, with some seeing much larger increases in unemployment than others. This divergence is usually explained by institutions that lead to labor market inflexibility – generous unemployment benefits, employment protections, and strong unions – in countries with high unemployment rates. This paper examines the evidence for this view. It shows that there is no simple bivariate relationship between standard measures of labor market institutions and unemployment rates across countries. It then critically examines several of the most often cited studies that support the labor market inflexibility view. It finds that these studies present relatively weak and to some extent contradictory support for the labor market inflexibility view. Finally, the paper presents the results of a set of tests designed to replicate some of the earlier multivariate analyses with more current data. These tests consistently fail to find robust evidence to support the labor market inflexibility view.
Topic:: Economics and International Organization
Political Geography:: Europe

1094. Why Delegate the Allocation of Foreign Aid to Multilateral Organizations? Principal-Agent Problems and Multilateralism

Author:: Helen Milner
Publication Date:: 09-2003
Content Type:: Working Paper
Institution:: Center for International Studies, University of Southern California
Abstract:: Why do countries delegate the distribution of foreign aid to international institutions? Specifically, why have the advanced industrial countries chosen to distribute part of their foreign aid through multilateral organizations, such as the European Union (EU), World Bank, IMF, UN, and regional development banks (RDBs)? The delegation of aid provision to an international institution is puzzling. Why would governments relinquish control over their aid if they are a useful instrument of statecraft? Governments delegate aid delivery to international institutions when their publics lack information about the consequences of aid and fear that their governments will deviate from their wishes concerning its use. By using the international organization to send aid, the government issues a credible signal to voters about the use of foreign aid. This signal leaves all actors better off by helping to solve a principal-agent problem in domestic politics. When publics are skeptical about the benefits of aid, governments are more likely to turn aid over to multilateral organizations in order to reassure taxpayers that their money is being well spent. Using data on about 20 donor countries of the OECD from 1960-2000, I investigate the sources of multilateral giving, showing that public opinion has the expected negative relationship to multilateral aid-giving.
Topic:: International Relations, Foreign Policy, Economics, and International Trade and Finance
Political Geography:: Europe and United Nations

1095. North American Economic Integration Policy Options

Author:: Earl H. Fry
Publication Date:: 07-2003
Content Type:: Working Paper
Institution:: Center for Strategic and International Studies
Abstract:: At the end of 2003, the North American Free Trade Agreement (NAFTA) will have been in effect for a decade, and although the accord will not be fully implemented for another five years, almost all of its important provisions are already in place. The model for NAFTA was the Canada-U.S. Free Trade Agreement (CUSFTA), which was put in motion in 1989 and was to be fully implemented within 10 years but was superseded by NAFTA after only five years in operation. NAFTA itself has created the world's largest free-trade area, encompassing the United States, Mexico, and Canada; 21.3 million square miles of territory; 422 million people; almost $12 trillion in yearly production; and $615 billion in annual three-way merchandise trade. North American trade, investment, government-to-government, and people-to-people exchanges have increased dramatically over the past decade and decisionmakers in Washington, D.C., Mexico City, and Ottawa will soon have to consider whether continental economic integration should move to the next level in the form of a customs and monetary union or even a common market possessing many of the attributes of the European Union (EU).
Topic:: Economics and International Trade and Finance
Political Geography:: United States, Europe, Canada, Latin America, Central America, North America, Mexico, and Ottawa

1096. 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

1097. 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

1098. 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

1099. 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

1100. 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

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COLUMBIA UNIVERSITY PRESS