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832. The Effects of (within and with EU) Regional Integration: Impact on Real Effective Exchange Rate Volatility, Institutional Quality and Growth for MENA Countries
- Author:
- Iftekhar Hasan and Leonardo Becchetti
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- We analyse two potential effects arising from regional (and with EU) integration—increased quality of institutions (including the quality of financial institutions) and, economic policies and reduced multilateral exchange rate volatility— in a conditional convergence growth framework for MENA countries. To this purpose we outline an ad hoc methodology which implements the traditional bilateral exchange rate measures to test effects of multilateral exchange rate volatility on growth of per capita GDP. Our estimates show that both factors (quality of institutions and reduction of multilateral volatility) significantly and positively affect growth and conditional convergence. We observe that MENA countries are not far from EU and OECD countries in terms of exchange rate volatility, but much below in terms of institutional quality. We finally simulate the potential effects of an improvement in institutional quality in MENA countries on their process of growth and conditional convergence. We conclude arguing that regional integration may be highly beneficial for such countries, mainly because of its effects on institutional quality.
- Topic:
- Development, Economics, and Regional Cooperation
- Political Geography:
- Europe
833. Collective Bargaining Practices in Eastern Europe: Case Study Evidence from Romania
- Author:
- Aurora Trif
- Publication Date:
- 10-2005
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- There are several studies on recent developments in collective bargaining in Eastern Europe, but there is still a debate about the extent to which collective bargaining practices resemble those in continental Western Europe. This paper aims to contribute to this debate, by examining primary data on collective bargaining practices in Romania using an actor-centred institutionalist approach. It focuses on collective bargaining in four large chemical companies. Comparisons are made to other countries in order to highlight the developments in Romanian cases. Unexpectedly, the study's findings point to an increase in state intervention in establishing the terms and conditions of employment after 1989, due to the state’s new roles during the transformation process that affected job security. The study suggests a considerable increase in the influence of top managers in determining pay and working conditions, while trade unions retained the considerable influence over social benefits in large companies. The findings show continuance of certain pre-1989 practices, such as a persistence of high state intervention and a limited independence of the trade unions from the management. This paper contributes to a deeper understanding of institutional changes in the context of a shift from a centrally planned economy to a market-based economy.
- Topic:
- Economics, Markets, and Political Economy
- Political Geography:
- Europe, Eastern Europe, and Romania
834. No Exit from the Joint Decision Trap? Can German Federalism Reform Itself?
- Author:
- Fritz W. Scharpf
- Publication Date:
- 09-2005
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- The unique institutions that make up Germany's "unitary federal state," long considered part of the country's post-war success story, are now generally perceived as a "joint-decision trap" impeding effective policy responses to new economic and demographic challenges at both levels of government. Nevertheless, a high-powered bicameral Commission set up in the fall of 2003 failed to reach agreement on constitutional reforms. The paper analyzes the misguided procedural and substantive choices that led to this failure, and it discusses the possibility of asymmetric constitutional solutions that might enhance the capacity for autonomous action at both levels.
- Topic:
- Economics, Government, and Political Economy
- Political Geography:
- Europe and Germany
835. Strategic Unionism in Eastern Europe: The Case of Romania
- Author:
- Aurora Trif and Karl Koch
- Publication Date:
- 07-2005
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- The shift from centrally planned economies to market-oriented economic models presented trade unions in Eastern European countries with crucial choices in relation to their roles as industrial relations actors. This paper investigates whether (and why) unions have chosen adversarial and/or co-operative relationships with the employers, based on a strategic choice conceptual framework. It focuses on trade union relations with employers at national, sectoral and company levels in Romania. It is argued that adversarial and co-operative relations between unions and employers developed simultaneously after 1989, but co-operation was the prevalent approach. Evidence suggests that ideological legacies, former institutions and the initial decision to participate in the macroeconomic transformation played a key role in shaping unions' choices towards co-operation with employers. Although this paper confirms the widespread view that labour is rather weak in Eastern Europe, it indicates that unions can be proactive and shape their own future if they have the capacity to mobilise their members and union leaders have the skills and willingness to use both conflict and co-operation in their relationships with employers. The comparison of evidence from Romania with other Eastern European countries reflects on the stage of Romanian transformation and also illustrates a wider possible applicability of the theoretical framework employed for the study.
- Topic:
- Economics, Industrial Policy, and Political Economy
- Political Geography:
- Europe, Eastern Europe, and Romania
836. Economic Reform and the Political Economy of the German Welfare State
- Author:
- Wolfgang Streeck and Christine Trampusch
- Publication Date:
- 02-2005
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- The key to economic reform in Germany is a significant reduction in the high costs of labour.The main factor driving up German labour costs is the funding of the extensive German welfare state through social insurance contributions that in effect operate like payroll taxes on employment. The paper discusses the political causes of the rise in non-wage labour costs since the 1970s. It then proceeds to show how a variety of opportunities for political blockade in the German political economy dim the prospect for effective reform in the foreseeable future.
- Topic:
- Economics, Industrial Policy, and Political Economy
- Political Geography:
- Europe and Germany
837. 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
- 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
838. 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
- 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
839. 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
- 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
840. 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
- 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