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3611. From Competition to Constitution: Races to Bottoms and the Rise of "Shadow" Social Europe

Author:
Éloi Laurent
Publication Date:
08-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
In this paper, I examine how the specific nature of economic integration in the European Union has affected member states' redistribution policies over the last two decades. More precisely, I attempt to detail the effect of social-tax competition between member states within social models, processes that I label “races to bottoms.” In this framework, I identify the emergence of an informal set of rules effectively constraining national redistribution policies in different ways, given the diversity of tax-social compacts in the EU. Because these rules are implicit and their effect generally underestimated, I gather them under the notion of “shadow” social Europe. Having empirically assessed the impact of this dynamic on the “continental,” the “Nordic,” the “eastern” and the “liberal” social-tax compact, I finally try to present a normative perspective and some policy options on this matter.
Topic:
Development, Economics, and Government
Political Geography:
Europe

3612. Natural Unemployment, the Role of Monetary Policy and Wage Bargaining: A Theoretical Perspective

Author:
Stefan Collignon
Publication Date:
05-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper models unemployment as a general equilibrium solution in labor and capital markets, while the natural rate hypothesis explains unemployment simply as a partial equilibrium in the labor market. It is shown that monetary policy can have long-run effects by affecting required returns on capital and investment. If monetary policy is primarily concerned with maintaining price stability, the interaction between wage bargaining and the central bank's credibility as an inflation fighter becomes a crucial factor in determining employment. Different labor market institutions condition different monetary policy reactions. With centralized wage bargaining, a central bank mandate focusing primarily on price stability is sufficient. With an atomistic labor market, the central bank must also consider output as a policy objective.
Topic:
Civil Society, Development, Economics, and Markets
Political Geography:
United States, United Kingdom, and Europe

3613. The Socioeconomic Diversity of European Regions

Author:
JoãoOliveira Soares, Carlos M.F. Monteiro, and Cristina del Campo
Publication Date:
05-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
It is well-known that there are significant differences among the European Union regions, which have been heightened due to the most recent enlargement in 2004. This paper aims to analyze this diversity and propose a classification of European Regions (EU) that is adjusted to the different axes of socioeconomic development and, simultaneously, is useful for European regional policy purposes. The data used in this paper were published by the European Union Statistical Office (Eurostat) and correspond to the main statistical indicators of NUTS2 (Nomenclature of Territorial Units for Statistics) regions in the EU. Multivariate statistical techniques allowed the identification of clusters of socioeconomic similarity, which are contrasted with the classes considered in the financial proposal of the European Commission (EC) for the period 2007-2013. It was found that each of the two main groups of the EC classification – convergence regions and competitiveness and employment regions – comprises at least two significantly different groups of regions, which differ not only in their average income but also in other indicators associated with their particular weaknesses. Also, it has been revealed that two other groups–phasing-in regions and phasing-out regions –, beyond their inexpressive denomination, lack homogeneity, being spread throughout different clusters.
Topic:
Demographics, Development, and Economics
Political Geography:
Europe

3614. Unbalanced Growth: Why Is Economic Sociology Stronger in Theory Than in Policies?

Author:
Carlo Trigilia
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The aim of this article is to discuss the relationship between economic sociology and economic policies. In the last decades, economic sociology has made significant achievements in terms of theory and research, but that its influence on policies has remained weak. While this was inevitable in earlier decades, when scholars had to concentrate most of their effort on defining the role and contribution of economic sociology, it has since become a constraint for the institutionalization and recognition of the discipline. The return to economic sociology, since the 1980s, has brought about important theoretical achievements, especially in the analysis of economic organization at the micro level in terms of social and cultural embeddedness. The role of social relations in contemporary economy has clearly emerged, but its implications for policies to promote economic development have remained more latent so far. Although a weaker institutionalization and a poorer connection to policy-making certainly affect the political influence of economic sociology in comparison to economics, the paper focuses on the research perspective. A shift of the research focus from the statics to the dynamics of economic organization could be useful. In this framework, particular attention is drawn to the study of local development and innovation through a closer relationship of economic sociology with comparative political economy. A separation between these two approaches does not favor a full exploitation of the potential contribution of economic sociology to policies.
Topic:
Civil Society, Development, Economics, and Political Economy
Political Geography:
Germany

3615. Big Cuts, Little Time: Welfare State Retrenchment in Sweden

Author:
Carl Dahlström
Publication Date:
02-2006
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
When harsh cuts were introduced in the Swedish welfare state in an agreement between the centre-right government and the opposition Social Democrats in 1992, there were astonishingly few disagreements between the political parties as to which social groups should carry the burdens of the cuts. The conventional wisdom on welfare state retrenchment would lead us to expect a clash of interests, especially considering the strength of interest groups in Sweden and the different constituencies of the five parties included in the agreement. This paper explains why that did not happen. It argues that the role that key officials played in shaping the 1992 retrenchment agreement in Sweden was decisive in averting potential political conflicts. In a crisis, politicians depend on advice from officials as politicians need complex information, often under pressure of time. This paper argues that key state officials, through their advice, defined both the character of the crisis and the range of possible solutions. As the number of options was restricted, key officials were able to define what cuts were reasonable. Within this framework, politicians looked for practical solutions and, to a large extent, disregarded conflicts of interest. This paper also suggests that the content of such advice depends on what is called the loyalty of key officials, which depends on the terms of their employment.
Topic:
Development, Economics, and Human Welfare
Political Geography:
Europe

3616. Institutional Change in Industrial Relations: Coordination and Common Knowledge in Ireland, Italy and Australia

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

3617. Skill formation in Britain and Germany: Recent developments in the context of traditional differences

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

3618. Low Intensity Conflict and Nation - Building in Iraq: A Chronology

Author:
Sara B. Moller and Eric M. Brewer
Publication Date:
03-2006
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
May 1, 2003 President George W. Bush declares an end to major combat operations in Iraq. The U.S. lost 138 soldiers during the war. Seven U.S. soldiers are wounded when grenades are thrown at an American base in Fallujah, a stronghold for Saddam Hussein loyalists. Earlier, U.S. troops killed 15 civilians at a protest in the city.
Topic:
Conflict Resolution, International Relations, and Development
Political Geography:
United States, Iraq, Middle East, and Maryland

3619. American Strategic, Tactical, and Other Mistakes in Iraq: A Litany of Errors

Author:
Anthony H. Cordesman
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
Wartime is scarcely the easiest time for demanding self criticism, but the recent exchanges between the Secretary of State and Secretary of Defense over the mistakes the US did or did not make in Iraq have highlighted the fact that the US must both admit its mistakes and learn from them to win in Iraq and successfully engage in the “long war.” The full chronology of what happened in US planning and operations before, during, and immediately after the fight to drive Saddam Hussein from power is still far from clear. It is now much easier to accuse given US leaders than it is to understand what really happened or assign responsibility with credibility.
Topic:
Security, Defense Policy, and Development
Political Geography:
Iraq, America, and Middle East

3620. Iraqi Economic Reconstruction and Development

Author:
Onur Ozlu
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The US aid effort in Iraq has not accomplished most of its sectoral goals, and more importantly, has not effectively initiated the reconstruction of the country's economy. After three years of struggle, the expenditure of more than $ 20 billion US aid funds, $ 37 billion Development Fund for Iraq (DFI) - UN accumulated from the oil for food program's revenues and the seizure of bank accounts- and death of thousands of US and other coalition soldiers and tens of thousands of Iraqis, Iraq is producing less oil, has less electricity and less water than it did during the Saddam period. After studying the modern Iraqi economic history as a background, this work analyzes why.
Topic:
Development, Economics, and Humanitarian Aid
Political Geography:
Iraq, Middle East, and Maryland