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761. Corruption and Inequality

Author:
Eric M. Uslaner
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Economic inequality provides a fertile breeding ground for corruption and, in turn, leads to further inequalities. Most corruption models focus on the institutional determinants of government dishonesty. However, such accounts are problematic. Corruption is remarkably sticky over time. There is a very powerful correlation between crossnational measures corruption in 1980 and in 2004. In contrast, measures of democracy such as the Freedom House scores are not so strongly correlated over time, and changes in corruption are unrelated to changes in institutional design. On the other hand, inequality and trust-like corruption are also sticky over time. The connection between inequality and the quality of government is not necessarily so simple. The aggregate relationships between inequality and corruption are not strong. The path from inequality to corruption may be indirect, through generalized trust, but the connection is key to understanding why some societies are more corrupt than others. This study estimates a simultaneous equation model of trust, corruption, perceptions of inequality, confidence in government, and demands for redistribution in Romania, and shows that perceptions of rising inequality and corruption lead to lower levels of trust and demands for redistribution.
Topic:
Corruption, Economics, and Government
Political Geography:
Europe

762. Trade Policy Lobbying in the European Union: Who Captures Whom?

Author:
Cornelia Woll
Publication Date:
10-2006
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
What role do firms play in the making of EU trade policy? This article surveys the policy domain and lays out the instruments firms can employ to influence decisions on trade. It underlines that European trade policy is characterized by a high degree of institutional complexity, which firms have to manage in order to be successful. In particular, the European Commission works intensively to solicit business input in order to gain bargaining leverage vis-á-vis third countries and the EU member states. This reverse lobbying creates a two-channel logic of trade policy lobbying in the EU. Corporate actors have a very good chance of working closely with the European Commission if they can propose pan-European trade policy solutions. This can be either trade liberalization or EU-wide regulatory restrictions on trade. Demands for traditional protectionist measures, especially those that reveal national interest divergences, are difficult to defend at the supranational level. Protectionist lobbying therefore goes through the national route, with corporate actors working to block liberalization by affecting the consensus in the Council of Ministers. The chapter illustrates this two-channel logic by studying business—government interactions in agricultural trade, textiles and clothing, financial services, and telecommunication services.
Topic:
Economics, Government, and Political Economy
Political Geography:
Europe

763. Who finances the Queen's CAP payments? The CAP as a dooH niboR Scheme

Author:
Richard E. Baldwin
Publication Date:
12-2005
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Thanks to the British Freedom of Information Act, the list of all CAP payments to English farms is public. It shows that the CAP is a dooH niboR scheme (that's Robin Hood spelled backwards). Table 1 records the CAP receipts for some of Britain's richest royalty. Why do royalty get paid? The CAP makes payments to farm owners, not to farmers, and about 40% of EU farmland is not farmed by its owner.
Topic:
Development and Economics
Political Geography:
United Kingdom and Europe

764. Capital Adequacy vs. Liquidity Requirements in Banking Supervision in the EU

Author:
Karel Lannoo and Jean-Pierre Casey
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The debate on banking supervision over the last decade has largely focused on capital requirements and solvency of financial institutions. The interaction between solvency and liquidity has been much less debated. Traditionally, it was assumed that once solvency was under control, liquidity should pose no problem. Banks with sufficient capital should be able to obtain extra liquidity from the central bank against adequate collateral if needed. Furthermore, the aim of the New Basel Accord to create a better alignment of regulatory capital with the risk to which banks are exposed, and the stronger focus on diversification, should eventually reduce mismatches between solvency and effective liquidity.
Topic:
Development, Economics, and Emerging Markets
Political Geography:
Europe

765. The New Capital Requirements Directive: What pieces are still missing from the puzzle?

Author:
Rym Ayadi
Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
After almost seven years of hard work to produce a new substantive piece of legislation updating the current banking regulation for European credit institutions and investment firms – the Capital Requirements Directive (CRD) – it looks like its timely adoption is still uncertain. The main problem is the dissatisfaction of Parliament with its limited role in comitology and in the Lamfalussy process, which has led it to suspend 'temporarily' the comitology provisions of the CRD, casting doubt over the future ability to amend the legislation. The European Constitution addresses Parliament's concern about ensuring democratic accountability in the comitology process in Art. 36. The pause for reflection on the Constitution prompted by the no-votes in the French and Dutch referenda has re-ignited the issue and is forcing EU institutions to seek a new inter-institutional agreement on this issue.
Topic:
Debt, Economics, and Government
Political Geography:
Europe

766. Climate Change in the US Government Budget - Funding for Technology and Other Programmes, and Implications for EU-US Relations

Author:
Thomas L. Brewer
Publication Date:
07-2005
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
With increasing Congressional support for funding climate change technology programmes, as reflected in passage of the Hagel/Pryor amendment to the energy policy bill in June 2005, issues about the climate change budget are becoming more salient. In this Policy Brief, Congressional and Presidential actions on several recent budgets are examined for the four principal areas of the climate change budget: technology, science, international and tax credits. The emphasis is on energy technology in particular, because of its salience in current policy discussions and its relative size in financial terms. Highlights of the findings include the following: Congress imposed substantial (63.3%) increases over the administration's climate change technology proposals for 2004 and then small increases for FY2005. For 2006, the administration has proposed reductions compared with the Congressionally-enacted levels in the technology component – reductions in both nominal and inflation-adjusted terms (-4.1% and -5.6%, respectively). The administration has also proposed cuts for fiscal 2006 in the science and international programmes (-2.9 and -19.0% in real terms). These and other differences in Presidential and Congressional approaches to funding climate change programs provide further evidence that the Presidential-Congressional divide on climate policy is continuing to widen. There is an emerging bi-partisan Congressional coalition in favour of increased spending on a wide range of climate change programmes. This shift will affect EU-US relations on climate change issues for the remainder of the current administration until 2008, and beyond as well.
Topic:
Economics and Science and Technology
Political Geography:
United States and Europe

767. The Real Budget Battle: Une crise peut en cacher une autre

Author:
Richard E. Baldwin
Publication Date:
06-2005
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The failure to reach a budget deal at the June summit may prove a blessing in disguise. The spectacular failure of the European Council to agree the last-minute compromise on the 2007-2013 Financial Perspective generated massively negative media coverage. In the short run, it will create huge difficulties for the EU, but things might have been even worse had they agreed.
Topic:
Economics, International Organization, and Treaties and Agreements
Political Geography:
Europe

768. Reading Russia Right

Author:
Dmitri V. Trenin
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
After the fall of Communism, Russia reverted to czarism. But more importantly, Russia embraced capitalism. Although not democratic, Russia is largely free. Property rights are more deeply anchored than they were five years ago, and the once-collectivist society is going private. Indeed, private consumption is the main driver of economic growth. Russia's future now depends heavily on how fast a middle class—a self-identified group with personal stakes in having a law-based government accountable to tax payers—can be created. The West needs to take the long view, stay engaged, and maximize contacts, especially with younger Russians.
Topic:
Economics and Government
Political Geography:
Russia, Europe, and Asia

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

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

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

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