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6501. Capacity Losses, Reconstruction and Unfinished Modernization: The Chemical Industry in the Soviet Zone of Occupation (SBZ)/GDR 1945-1965

Author:
Rainer Karlsch
Publication Date:
03-1997
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
Between the two World Wars, central Germany (the later GDR) was a preferred region for the foundation of new chemical plants. But after World War II, Soviet occupying troops dismantled 116 chemical plants in the Soviet Zone of Occupation. After the division of Germany became apparent, the Soviet Zone began a policy of self-sufficiency, but the chemical industry of the GDR dropped behind the West German chemical industry in the first postwar decade. After the "Sputnik shock" in 1957 and Khruschev's proclamation of an "economic race," the chemical industry in the Eastern Bloc moved into the center of the economic policy. In November 1958, the GDR enacted, as did the Soviet Union, a special chemical program. The main points of the program were the doubling of the chemical production within seven years, and an even greater increase in production of synthetic fibers and plastic. But the program failed. Decisive for the backsliding of the GDR's chemical industry was the uncoupling from the international division of labor and the integration into the East European economic zone. The GDR's Chemical Industry could find no real equivalent partner in Eastern Europe, and cooperation with the West was restricted for political reasons. The "opting for oil" of the Ulbricht-era became in the Honecker-era a policy of moving "back to coal." The maintaining of carbide chemistry finally ended in an energy crisis and an ecological fiasco.
Topic:
Cold War, Industrial Policy, and International Political Economy
Political Geography:
Europe and Germany

6502. Dominance through Cooperation - The Japan Strategy of I.G. Farben

Author:
Akira Kudo
Publication Date:
03-1997
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
This paper analyzes the Japan strategy of I.G. Farben in the inter-war period. It deals with export strategy as well as the licensing of technologies. It concludes that I.G. Farben suffered from a variety of difficulties in its Japan business, especially in the area of direct investment, and that, in spite of this, it succeeded in developing active business operations in Japan, especially in its exports of dyestuffs and nitrogenous fertilizer and in its licensing of the Haber-Bosch process for synthetic ammonia.
Topic:
Industrial Policy and International Political Economy
Political Geography:
Japan, Europe, Israel, and East Asia

6503. The Dynamics of Industry Structure: The Chemical Industry in the US, Western Europe, and Japan in the 1980s

Author:
Ashish Arora and Alfonso Gambardella
Publication Date:
03-1997
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
This paper analyzes the evolution of the structure of the chemical industry in the US, Europe, and Japan. Differences in institutions, historical conditions, and resource endowments across the three regions reinforce differences in initial conditions. However, technological innovation, the internationalization of the industry, and the development and operation of markets, especially markets for technology, capital, raw materials, and corporate control, are powerful forces encouraging convergence. Convergence is less marked at the level of the firm than at the level of the industry, and is more marked between the industries of Western Europe and the United States.
Topic:
Globalization and Industrial Policy
Political Geography:
United States, Japan, and Europe

6504. Electoral Institutions, Cabinet Negotiations, and Budget Deficits within the European Union

Author:
Mark Hallenberg and Jürgen. von Hagen
Publication Date:
02-1997
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
Large government budget deficits are a concern in most industrialized countries. Two literatures in political economy argue that differences in political institutions explain much of the variation in the success of counties in their efforts to run small deficits. One group of authors considers how differences among electoral systems affect the size of budget deficits, while the second group concentrates on the governmental institutions which structure the formation of the yearly budget. Among the "electoral institutionalists", a consensus is beginning to emerge which treats proportional representation systems as a cause of high levels of public debt. In contrast, "fiscal institutionalists" argue that the presence of certain institutions in the decision-making process at the cabinet level, such as a strong finance minister or negotiated spending targets, lead to smaller deficits than in cases where such institutions are missing. We indicate that these two literatures complement one another. Electoral institutions matter because they restrict the type of budgetary institution at the governmental phase which a state has at its disposal. A strong finance minister is feasible in states where one-party governments are the norm, and such states usually have plurality electoral systems, while negotiated targets provide an alternative in multi-party governments. In multi-party governments, which are common in states with proportional representation, the coalition members are not willing to delegate to one actor the ability to monitor and punish the others for "defections" on the budget. The empirical section of the paper indicates a strong relationship between one-party governments and strong finance minister solutions within the European Union states on the one hand and multi-party or minority governments and targets on the other. Pooled time series regression results also support our contention that it is the presence or absence of one of these budgetary institutions, rather than the plurality/proportional representation dishotomy, which has the greatest impact on debt levels.
Topic:
International Organization and International Political Economy
Political Geography:
Europe

6505. A Strategy for Launching the Euro

Author:
Maurice Obstfeld
Publication Date:
02-1997
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
This paper studies the constraints placed by the Maastricht Treaty on the rates at which member currencies will exchange against the Euro at the start of stage 3 of economic and monetary union (EMU). The paper shows that the stage 3 bilateral conversion factors for EMU member currencies must correspond to closing market exchange rates as of December 31, 1998; furthermore, currency conversion rates into the Euro cannot be determined until that date. Moreover, official announcements about intended conversion factors will carry no credibility with markets, as market rates must be chosen over any prennounced rates according to the Treaty. Unless there is heavy official intervention in the runup to stage 3, EMU members' bilateral market rates will exhibit excessive volatility and may induce beggar-thy-neighbor policy behavior. On the other, hand, exchange-rate targeting may open the door to speculative currency crises. The only feasible solution appears a widely-publicized institutional reform to subjugate national central banks' policies entirely to the goal of intra-EMU exchange stability in the final months of stage 2.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe

6506. European Integration and the Question of National Sovereignty

Author:
Lars Tragardh
Publication Date:
01-1997
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
According to Ole Wæver, a leading student of the travails of the "New Europe," Western Europe is probably the part of the world that currently exhibits "the most advanced case of border fluidity and transgression of sovereignty." So dramatic are the processes underway that they have led otherwise prudent political scientists to turn to the trendy idiom of "postmodernity," meaning in the context of IR theory first and foremost "post-sovereignty." Thus John Ruggie has argued that what he sees as "the unbundling of territoriality" - i.e. the incipient decoupling of sovereignty and (nation)state - constitutes "nothing less than the emergence of the first truly postmodern international form." Similarly, Saskia Sassen notes that in the process of globalization the notion of a "national economy" has come to be replaced with that of a "global economy." As a consequence, she argues that while sovereignty and territory very much "remain key features of the international system," they have been "reconstituted and partly displaced onto other institutional areas outside the state." Thus, she concludes, "sovereignty has been decentered and territory partly de-nationalized."
Topic:
International Cooperation and Sovereignty
Political Geography:
Europe

6507. Balancing Positive and Negative Integration: The Regulatory Options for Europe

Author:
Fritz W. Scharpf
Publication Date:
11-1997
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
During the golden years from the 1950s to the mid-1970s, the industrial nations of Western Europe had the chance to develop specifically national versions of the capitalist welfare state - and their choices were in fact remarkably different (Esping-Andersen 1990). In spite of the considerable differences between the "Social-Democratic", "Corporatist" or "Liberal" versions, however, all were remarkably successful in maintaining full employment and promoting economic growth, while also controlling, in different ways and to different degrees, the destructive tendencies of unfettered capitalism in the interest of specific social, cultural, and/or ecological values (Scharpf 1991a; Merkel 1993). It was not fully realized at the time, however, how much the success of market-correcting policies did in fact depend on the capacity of the territorial state to control its economic boundaries. Once this capacity is lost, countries are forced into a competition for locational advantage which has all the characteristics of a Prisoner's Dilemma game (Sinn 1994). It reduces the freedom of national governments and unions to raise the regulatory and wage costs of national firms above the level prevailing in competing locations. Moreover, and if nothing else changes, the "competition of regulatory systems" that is generally welcomed by neoliberal economists (Streit/Mussler 1995) and politicians may well turn into a downward spiral of competitive deregulation and tax cuts in which all competing countries will find themselves reduced to a level of protection that is in fact lower than that preferred by any of them.
Topic:
Economics, Government, International Organization, and International Political Economy
Political Geography:
Europe

6508. Employment and the Welfare State: A Continental Dilemma

Author:
Fritz W. Scharpf
Publication Date:
07-1997
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Estimates of the comparative health of the North American and Western European economies and societies have had their fashion cycles - from Servain-Schreiber's warnings that Europe was falling behind, rather than catching up with, American technological leadership in the 1960s, to European exasperation over American trade and budget deficits in the 1970s, to anxieties over Eurosclerosis in the early 1980s and over the American loss of international competitiveness in the late 1980s. Presently, by all accounts, the sick man is again Europe, with higher unemployment and much lower rates of job creation over the last two decades or so. The main problem is a rising level of long-term unemployment that mainly affects unskilled workers and, in most countries, young job seekers with low levels of schooling.
Topic:
International Cooperation and Political Economy
Political Geography:
America, Europe, North America, and Western Europe

6509. Expanding NATO: Will it Weaken the Alliance?

Author:
Michael E. Mandelbaum and Richard C. Holbrooke
Publication Date:
12-1996
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Good evening. Welcome to the second or the third of our Great Debates, it depends on how you're counting. The first formal one was about six weeks ago when Madeleine Albright, our new Secretary of State designate, and Jeane Kirkpatrick debated about the United Nations. Before that we had a trial run with Bob Ellsworth, one of Senator Dole's closest friends and advisors, and Tom Donilon, the chief of staff of the State Department.
Topic:
Security, NATO, and United Nations
Political Geography:
United States and Europe

6510. Hazards in Implementing a Monetary Conditions Index

Author:
Neil R. Ericsson, Kari H. Eika, and Ragnar Nymoen
Publication Date:
10-1996
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Some recent studies have suggested constructing a Monetary Conditions Index (or MCI) to serve as an indicator of monetary policy stance. The central banks of Canada, Sweden, and Norway all construct an MCI and (to varying degrees) use it in conducting monetary policy. Empirically, an MCI is calculated as the weighted sum of changes in a short-term interest rate and the exchange rate relative to values in a baseline year. The weights aim to reflect these variables' effects on longer-term focuses of policy — economic activity and inflation. This paper derives analytical and empirical properties of MCIs in an attempt to ascertain their usefulness in monetary policy.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe and North America