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This paper addresses two main questions: (1) how far do the activities of fiscal councils in the EU countries help promote transparency and accountability in the management of public finances and (2) how could fiscal councils enhance the impact of those activities? The analysis is based on a questionnaire collected in 2016 from fiscal councils in 18 EU countries. The questionnaire looked at how the councils themselves assessed their impact on the management of public finances, and how they communicated their findings to the wider public. The councils see some benefits of their work; and their monitoring of adherence to fiscal rules and legislative regulation, as well as their warnings about excessive government spending, seem to get noticed in the media. This activity informs the public, and may in turn influence politicians' ratings, thereby helping to contribute to greater accountability in the management of public finances. The paper consequently argues that fiscal councils may promote fiscal transparency and accountability and proposes several ways to enhance the effectiveness of their influence on media. [ABSTRACT FROM AUTHOR]

The main focus of this paper is the study of common principles of flexicurity in the EU and the interrelationships in the Danish flexicurity system. The paper generates insights about the complexity of the interrelationship between flexibility and security, and the role of flexicurity labor market institutions. [ABSTRACT FROM AUTHOR]

The paper deals with the idea that EU has to reformate as a result of the latest challenges, including the Brexit. A possible effect and opportunity from this can be a stronger position for the EU Balkan Member States. The analysis in the paper takes into consideration all Balkan economies, including candidate countries in order to obtain a general approach for the region. This approach is new because it puts together member and candidate members from a region, in the context of re-evaluating the EU, and leads to the idea of finding a regional leader able to generate regional progress and to support the region's interests in the European Institutions. The analysis covers five representative economic indicators (GDP growth rate, gross fixed capital formation, unemployment rate, inflation rate and general government gross debt) and is realized on three levels: a comparative analyses, a cluster analysis, and a cumulative analysis as well. Moreover, regression is used in order to point out the economic disparities across the region. The main conclusion of the analysis is that the great regional economic disparities can be decrease using common regional policies. Moreover, the analysis identifies a regional economic leader able to coordinate common initiatives at least on short and medium terms. The analysis and the conclusions in the paper are supported by the latest official statistic data, pertinent tables and diagrams. [ABSTRACT FROM AUTHOR]

Using a historical-institutionalist framework, this paper discusses the emergence and evolution of transnational cooperation initiatives in post-war Europe. A number of critical junctures can be identified at which different goals and approaches were introduced. Due to the path-dependent nature of institutional arrangements, this has resulted in increasingly fuzzy rationales and contradictory objectives for transnational regions in Europe today. The paper concludes with a reflection on the value of historical institutionalism to identify the malleability of such complex policy concepts and the key challenges that transnational regions are facing due to unresolved tensions in their policy design and evolution. [ABSTRACT FROM AUTHOR]

Maritime industry has deep roots in Europe. International ports and Inland water ways are in use by European merchants in the course of their trade all along the history. Formation of the European Union and Single European Market has increased the importance of maritime transport even more than before. Currently, industry is regulated at the Union level with body of law which intends to create a safe and predictable business environment for European and foreign enterprises. However, shared nature of the EU with her Member States in regulating Maritime Transport has created a big question mark for many external parties as well as European stack holders of Maritime industry. The question is who can represent EU maritime industry externally and where to draw the limits of Union and Member States Competencies in this industry? At the midst of the second decade of 21th Century, still many international businesses and even foreign governments wonder about limits of external competencies of the EU in maritime industry. Such confusion creates trouble for foreigners and even Europeans in determining where should they referee their matters to the Commission and where should they approach Member States? In this paper, author tries to answer above mentioned question by scrutinizing external and internal challenges facing the EU about its competencies to represent maritime industries outside of her boundaries. Paper is divided into five main sections. After introductory comments, second part will discuss maritime policy and its regulation in the EU. In third part with particular focus on the EU-IMO relations, paper will analyse external challenges facing the Union in representing her maritime industry in international organizations. Forth part will take a look at internal challenges and regulatory limits which affect the extremal representation of maritime industry by the Union. Final part is dedicated to concluding remarks. [ABSTRACT FROM AUTHOR]

This article argues that the causes of the crisis in Romania and other new EU member states were different from those affecting Western Europe or the US. The main argument of this paper is that bad domestic monetary, fiscal and regulatory policies were the real crisis generators, while exogenous crisis mechanisms, including contagion from the global financial crisis, were just the trigger. Romania, and other new EU member states, has been facing the crisis of a consumption-led development model, not just a financial crisis imported from more developed economies. This paper brings insights into the impact of the flat-tax regime on consumption and the impact of speculative capital inflows disguised as foreign direct investments. [ABSTRACT FROM PUBLISHER]

This paper introduces the special issue “Effects of the euro changeover on consumer behaviour” by briefly reviewing the contents of the included papers. The introduction follows the organization of the papers in three sections each focusing on a common set of issues. In the first section, research revealing the perceived and actual problems consumers face after the euro changeover is described. Research illuminating learning and adaptation to the euro changeover is the focus of the second section. A special problem is the misperception of inflation after the euro changeover. Research on this problem is addressed in the third section. In a final section, the main findings and their policy implications are summarized. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to evaluate the effectiveness of the European Union’s (EU) economic governance framework as a key component and driver of the EU - Economic and Monetary Union (EMU). Considerable measures to strengthen the EMU have been undertaken in recent years. In spite of this, its effectiveness in tackling challenges that might appear especially in times of crisis, is still called into question. The creation or reformation of institutions seems to be the most efficient manner in which the Eurozone can advance policies and mechanisms meant to stimulate economic growth. We have found that the major obstacles to more efficiency are two components: 1. the political dimension of the EU – or better said political interference of MS’s to protect their own interests; 2. weak EU leadership and vision – this, together with political interests, dilutes significantly the building of institutions, creation and enforcement of policies. Ultimately the question of improving effectiveness of EU economic governance lies in the EU’s ability to build a stronger foundation for its institutions. As a modern political and economic entity, subjugated to the MS’s, the EU must maintain a balance between state powers and institutional powers, a legal and democratically accountable system of governance, the enforcement and respect of law, whilst also protecting economic growth and the right for a better future. [ABSTRACT FROM AUTHOR]

Copyright of Regional Studies is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper proposes approaching the emergence and evolution of the Europeanization of national planning using conceptual frameworks from historical institutionalism in order to shed light on the mechanisms and trajectories of domestic change arising from the influence of EU strategic planning. It seeks in particular to examine Europeanization in terms of the extent to which EU spatial planning has become a driving force for institutional changes in very different national planning systems. Returning to the changes that occurred in the Italian and English planning systems in the last two decades, the author provides insight into the attempts to insert and transpose EU spatial planning concepts and instruments into domestic systems, dealing with path dependency and European influence. By reading these processes from a historical institutionalist perspective, the paper aims to enhance understanding of the relative influence of European spatial planning on national planning systems, identifying mechanisms and trajectories of domestic change in different planning systems. Key findings concern the diverse modes and degree of institutionalization of EU strategic spatial planning, examining tendencies to replace the status quo through displacements in England and to progress through a path-dependent trajectory in Italy. [ABSTRACT FROM AUTHOR]

This paper synthesises the implications of recent statistical evidence regarding inflation persistence in the euro area. For aggregate data, the degree of inflation persistence appears to be very high for sample periods spanning multiple decades but falls dramatically once we allow for time variation in the mean level of inflation; furthermore, the timing of these breaks in mean generally coincides with observed shifts in the monetary policy regime. Finally, sectoral inflation series exhibit much less persistence than aggregate inflation, mainly because of the influence of transitory sector-specific shocks. [ABSTRACT FROM AUTHOR]

The increasing dominance of neoliberalism as the key steering mechanism of the European Union (EU) since the early 1990s has implied the competitiveness-oriented reshaping of cohesion policy. The aim of this paper is to initiate a debate from a critical political economic perspective on the implications of this shift for Central Eastern European (CEE) member states. To this end, the paper discusses the formation of EU centre-periphery relations from a CEE point of view and formulates some preliminary suggestions as to how cohesion policy would need to be rethought in order to ensure the better integration of lagging CEE regions. [ABSTRACT FROM AUTHOR]

In this paper we empirically study the relation between public debt and economic growth. We analyze how the public debt to GDP ratio at a certain point in time is cor- related with the GDP growth rate in the following period, where we consider a one-year time span, a three-year time interval and a five-years interval. Using panel data comprising seven developed countries from 1970-2012, we estimate a pooled regression model and a random effects model. We find some evidence for a significantly negative relation between debt and growth. Further, for most specifications this relationship does not seem to be characterized by non-linearities. [ABSTRACT FROM AUTHOR]

The objective of the paper is to reveal the methodology used to examine the tax gap and calculate the tax gap for all EU states over 2011-2014. The paper draws on the review of reference literature addressing the tax gap in the context of tax avoidance and tax evasion. The paper features the GDP size across countries so as to demonstrate the overall level of the shadow economy compared to the aggregate tax burden. Finally, for the first time, the calculations of the tax gap for all EU states over 2011-2014 were displayed. [ABSTRACT FROM AUTHOR]

This paper assesses the effectiveness of fiscal responsibility laws (FRL) in stabilizing public finance in the member states of the European Union (EU). 1 The coordination mechanism of EU fiscal policy is the use and application of established rules for conducting responsible fiscal policy using appropriate instruments of FRL to maintain fiscal discipline, foster economic and macroeconomic growth, and ensure the stability of public finance. The implementation of FRL requires the application of instruments such as budget procedures, numerical fiscal rules, and the existence of independent fiscal institutions. Such instruments differ among the EU member states in terms of institutional models, tasks and competences, quality, and effectiveness. The paper discusses the theoretical implications of FRL and fiscal governance; examines the coordination mechanism of fiscal policy in the EU; assesses the effectiveness of European and national FRL; and concludes that FRL in the EU is diversified because of differences in the instruments used. [ABSTRACT FROM AUTHOR]

Nowadays the cross-border cooperation is promoted through policies and with financial help involved in order to increase the territorial cohesion along the national borders of EU and to increase the relationships with the neighbour countries. At a certain degree the areas along the borders can be considered regions that, being peripheric, need development despite the specificity brought by the different statuses. The paper has as central the concept that was first put forth systematically by Francois Perroux, being now into use in many countries, both in theoretical discussions and public policy programs. The promotion of regional development centres will serve as focal point and incentive for further development. Such a regional concentration helps through the benefits of technological external economies and makes the growth centre attractive to entrepreneurs, thus initiating further development. We examine the actual approaches in the literature on the economic growth, development poles and their main characteristics based on which we are able to identify the applicability of these theories in a cross-border frame in our future researches. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose The purpose of this paper is to provide more reliable estimates of the relationship between government spending and economic growth in the European Union (EU) during the period of 1995-2015.Design/methodology/approach The methodology consisted of several different stages. In the first stage for an assessment of dynamics of government spending and economic growth indicators over two decades, descriptive statistics analysis was employed. Correlation analysis helped to identify the relationships between government expenditures (GEs) and economic growth. In the third stage, for modeling the relationship and the estimation of causality between GE and economic growth, Granger causality testing was applied.Findings The research indicated that eight EU countries have a significant relationship between government spending and economic growth.Research limitations/implications This study has been bounded by general GE and economic growth only. The breakdowns of general GE on the basis of the activities they support have not been considered in this paper, which is the main limitation of the research. Despite the limitation, it might be maintained that the research highlights key relationships in the EU countries.Originality/value These insights might be useful for policy makers. In countries with unidirectional causality running from GE to economic growth, the government can employ expenditure as a factor for growth. The governments should ensure that resources are properly managed and efficiently allocated to accelerate economic growth in the countries with unidirectional causality from GDP to GE. [ABSTRACT FROM AUTHOR]

In the present paper, we consider the question of the effectiveness of the remedies imposed by the EC. Our fundamental analysis stems from the reciprocal influence between Competition Law and the Digital Economy. Nowadays, Competition Law has a profound role, affecting not only direct undertakings worldwide but also indirectly by having an impact on our daily life and protecting customers. In recent years, however, the idea of creating a culture of innovation among companies has prevailed. For more than 20 years, the Digital Economy is also part of our life characterizing markets by rapid innovation and technological sophistication. The digital era has introduced the global network of economic activities and commercial transactions enabled by information and communication technologies. Through innovative products/ideas, not only the companies themselves benefit by increasing their productivity and consequently constantly creating new jobs (Alibaba, Amazon), but also consumers having the opportunity to choose a plethora of products at the best possible price. [ABSTRACT FROM AUTHOR]

This paper investigates the role of the national institutional setting in explaining Single Market non-compliance regarding non-tariff barriers in intra-European Union (EU) trade. Using data on infringements to Single Market law we show that the quality of domestic institutional characteristics is relevant to explain non-compliance among EU countries. While government independence from political pressures and higher levels of representativeness and accountability reduce the propensity of member states to infringe upon Single Market laws, better regulatory quality increases the probability of non-compliance at industry level, suggesting that increases in competition may generate protectionist measures that violate Single Market law. [ABSTRACT FROM AUTHOR]

Under the prospect of productive specialization, the degree of potential success of the euro since its inception was seen as closely linked to the development of effective risk-sharing mechanisms across EU members. Without shared fiscal resources, financial integration was expected to play a leading role in this respect. This paper documents the failure in fulfilling this expectation: Along with an analysis of the evolution of specialization and risk-sharing, we present evidence supporting the claim that progress in financial integration has not been conducive to income risk-sharing across euro area members, while it might have favoured a specialization split between countries with low-medium and high technology productive structures. As a result, monetary union members face higher income fluctuation risk without enhanced insurance protection. Additionally, evidence suggests a differential impact of the specialization split on sector productivity, contributing to making the monetary union a club of non equals. [ABSTRACT FROM AUTHOR]

The notion of territorial governance has relatively recently emerged onto the European policy agenda, and often used in relation to the concept of territorial cohesion. To date, the notion has been understood and conceptualized in various ways and has been defined rather loosely when invoked. This paper examines how the notion is used and understood in European policy debates. It questions whether the notion is different to general concepts of governance and multi-level governance. Three specific characteristics are suggested that might distinguish territorial governance from other types of governance: (i) managing territorial dynamics, (ii) assessing territorial impacts and (iii) delineating policy boundaries. [ABSTRACT FROM AUTHOR]

The aim of this paper is to address one of the growing causes of tension between responsiveness to electorates and responsibility to partners by analysing the new rule-bound system of economic governance that is evolving within the euro area in response to the crisis. The key argument is that the nature and depth of the external constraints that have been agreed since 2010 represent a step-change in the intrusion of external actors in the domestic government and politics of the euro states. Responsibility to the collective has emerged as the central norm of the framework of economic governance that is evolving. The norm is backed by a strong regulatory framework including sanctions. The paper concludes with an analysis of the likely impact of the new system on domestic politics and political parties under the rubric of the politics of constrained choice. [ABSTRACT FROM PUBLISHER]

This paper is designed to shed some light on possible impacts of globalization and Europeanization on social security reforms in one of the new EU member state - Lithuania. The paper is based on 67 expert interviews conducted with the political elite, academics, journalists, senior civil servants, interest group representatives and the economic elite. The paper highlights the higher influence of globalization through the activities of such supranational agencies as the World Bank and the International Monetary Fund compared to the impact of cognitive Europeanization on social security reforms. [ABSTRACT FROM AUTHOR]

In the process of implementing EU policy, Member States sometimes introduce new policy instruments in cases where this is not obligatory. To better understand this phenomenon, this paper reviews three cases in which new instruments emerged and develops a methodology to trace back the influence of EU Directives on instrument choice. The method is illustrated by a narrative of the emergence of new management planning instruments during the implementation of the EU Habitats Directive in three EU Member States: Finland, Hungary and the Netherlands. Three key features of a policy instrument are defined, namely, its authoritative force, action content and governance design. These are used to measure the contribution of the Habitats Directive compared to other potential explanatory causes for the emergence of the new policy instrument. In all three reviewed countries a nested causal relationship between the Habitats Directive and the introduction of the new policy instrument is identified. Based on the relative contribution of the Habitats Directive to the emergence of the new instrument a distinction is made whether the Directive acted as a cause, catalyst or if conjunction occurred. [ABSTRACT FROM PUBLISHER]

Copyright of Regional Studies is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Objective: The objective of this paper is to evaluate the welfare state models in the EU countries and to start the discussion if the new member states (NMS), i.e. those EU member states that joined the EU in 2004/2007, fit the Sapir typology (Nordic model, Continental model, Anglo-Saxon model, Mediterranean model). The second objective is to examine the labour market situation, reduction of poverty and social inequalities in the EU countries. The third one is to open the issue if the public spending can be managed both justly and effectively. Research Design & Methods: The linear regression function and correlation has been used to present effectiveness of social expenditures to reduce poverty, as well as evidence that public spending can be managed both justly and effectively. Findings: This paper demonstrates more similarities can be drawn across the NMS and the EU-15 than within the NMS and EU-15, respectively. The typology of welfare state models is applied to the NMS and their effectiveness is tested. Accordingly, we classify the Czech Republic, Slovenia and Cyprus as countries of the Nordic model; Hungary, Slovakia and Malta as the Continental model; Lithuania, Latvia and Estonia as the Anglo-Saxon model and, finally, Poland, Croatia, Romania and Bulgaria as the Mediterranean model. Implications & Recommendations: Recent data suggest that the global crisis has caused an increase in the level of poverty and social spending in the EU countries. However, this is just a temporary situation and it does reflect the solutions of models. Contribution & Value Added: The NMS tend to be examined as a separate group of countries that -- as the literature suggests -- depict different qualities of the welfare models than those pursued in the EU-15. [ABSTRACT FROM AUTHOR]

ABSTRACT The economic impact of the Regional Policy of the European Union is still controversial. This paper exploits administrative boundaries as spatial discontinuity to estimate the causal effect of this policy on the Italian Objective 1 regions' employment. The analysis, developed both in a border strategy framework (municipalities contiguous to the policy-change boundary) and with more traditional RDD models balanced by spatial forcing variables (centroids' distance and coordinates), shows that the EU Regional Policy produced a positive impact on employment levels, without any displacement of economic activities away from nontreated regions and a concentration of the impact in key economic sectors. [ABSTRACT FROM AUTHOR]

This paper studies whether a monetary union can be managed solely by a rule-based approach. The Five Presidents' Report of the European Union rejects this idea. It suggests a centralisation of powers. We analyse the philosophy of policy rules from the vantage point of the German economic school of thought. There is evidence that a monetary union consisting of sovereign states is well organised by rules, together with the principle of subsidiarity. The root cause of the euro crisis is rather the weak enforcement of rules, compounded by structural problems. Therefore, we suggest a genuine rule-based paradigm for a stable future of the Economic and Monetary Union. [ABSTRACT FROM AUTHOR]

Conventional Data Envelopment Analysis (DEA) considers monotonic variables, ie the lower the inputs and the larger the outputs, the better. There are, however, occasions when the monotonicity of a variable with respect to efficiency depends on the value of the variable, that is in a certain range of values an increase in the variable is desirable, while in another range it is a decrease of the variable that is desirable. In this paper, a DEA model that solves problems considering non-monotonic variables is proposed. An application to assess the macroeconomic efficiency of European Union Member States, as regards taxation, gross debt, GDP growth and employment is presented. [ABSTRACT FROM AUTHOR]

This paper analyzes how the apparently merely technical introduction of reversed qualified majority voting for the excessive deficit procedure included in the Six Pack and the Fiscal Compact shifts not only the institutional balance between the European Commission and the Member States but also the relationship between liberalization and social regulation in the EU. In bringing together institutional analysis and a political economy perspective, the paper shows how the strengthening of the Commission's discretionary decision-making authority in a context of intergovernmental power imbalances between debtor and creditor states extends the asymmetry between market-making and market-correction to the area of political decision-making. In consequence, economic and social policies are subordinated to the primacy of austerity. [ABSTRACT FROM AUTHOR]

The European Union (EU) has had a five-year experience with the Macroeconomic Imbalance Procedure (MIP) that was introduced by the European Commission in December 2011 as a response to accumulation of huge imbalances with the EU and the euro area. This paper evaluates results of the MIP and aims to examine what kind of imbalances have been revealed by the MIP, evaluate the current settings of the MIP and propose reforms that would enhance functioning and applicability of the MIP in practice. Based on results published in Alert Mechanism Reports and In-Depth Reviews and evaluation of the yearly cycle of the MIP, we propose several reforms and changes in the MIP and the scoreboard of indicators in particular. We bring forward a concept of relative thresholds that reflect economic development much better than currently applied absolute thresholds. Moreover, we recommend modification of some of the indicators involved in the MIP and introduction of maximally three flagship indicators that would receive special attention in assessment of the risk stemming from macroeconomic imbalances. [ABSTRACT FROM AUTHOR]

This paper focuses on a debt crisis in Greece, the causes and impacts of this crisis and possible solutions to current situation. The Greek debt crisis is one of a number of current European debt crises and is believed to have been caused by a combination of structural weaknesses of the Greek economy coupled with the incomplete economic, tax and banking unification of the European Monetary Union. Throughout this thesis the Greece is compared with another European states regarding to important macroeconomics indicators and economic policy. The aim of this paper is analyze and make a comparison which is based on the cluster analysis. First part of this paper is about reasons, which cause financial crises in Greece. Second part focuses the theoretical background of the cluster analysis and selection of economical indicators. Next part evaluate findings with cluster analysis. The conclusion cautions against high state debts and shows indispensability reforms which are related with fiscal state policy. [ABSTRACT FROM AUTHOR]

This paper concentrates on the economic climate of EU countries in the context of integration and globalisation. The aim of this study is to analyse the (comparative) economic climate in the Baltic and other leading EU countries. The main emphasis is on the economies of the three Baltic states. The strategic goals of the EU and of Latvia are discussed as well as are the development challenges and models for Latvia. The research methodology utilised is based on macro-economic theory. This paper provides information about various different indexes and the main results and conclusions reflect the overall situation in EU countries but especially in Latvia. [ABSTRACT FROM AUTHOR]

The Europeanization literature assumes that European integration affects domestic policies, politics and polities; yet, the impact on domestic corporatist patterns, which characterize policy-making in small European states, has received little attention so far. While contradictory theoretical expectations exist, this paper argues that European market-making policies tend to weaken domestic corporatist policy-making by offering new opportunities to domestic actors, in particular the executive. This allows them to bypass policy concertation. However, the impact depends on the usage domestic actors make of the European policies and is mediated by domestic factors. A comparison across policy sectors in two countries – Belgium and Switzerland – largely confirms these arguments. This means that domestic institutions such as corporatist policy-making are not only mediating factors in the process of Europeanization, but themselves subject to change. This effect even goes beyond the borders of the European Union, affecting policy-making in Switzerland as well. [ABSTRACT FROM PUBLISHER]

This paper adapts and then uses principal-agent (PA) theory to conceptualize and thereafter to analyse the EU-level development of the Open Method of Co-ordination (OMC), a crucial component of the Lisbon Strategy as a 'governance architecture'. The PA model theorizes the continuous interaction and power struggle between the Commission ('agent') and the member states ('principal') in the emergence and institutionalization of the OMC. It is innovative for several reasons: first, it acknowledges that the member states and Commission interact in a PA logic prior to a contractual agreement; second, it recognizes that the 'principal' does not only control and monitor the 'agent', but also (re-)defines features of the OMC via political initiatives; third, it underlines the importance of the ideational action of the 'agent'. On the basis of the model, two hypotheses are formulated: first, that the 'agent' will be more influential in defining the OMC when it is nascent; and second, that the 'principal' will be more influential in the reconfiguration of the OMC. The model is tested and the hypotheses are confirmed via a longitudinal analysis (1992 to 2005) of the OMC in employment policy. [ABSTRACT FROM AUTHOR]

This paper explores the extent of euro area policy convergence during the third stage of EMU. The policy convergence hypothesis from international political economy posits that euro zone national economies should become more similar over time in terms of economic growth, employment and inflation outcomes as a result of using a common currency and taking the same regional monetary policy. Yet the descriptive data show little evidence of euro area policy convergence post-1999. One possible explanation for the lack of macroeconomic convergence within the euro zone is advanced (fiscal policy divergence), and the implications of policy divergence for the long-term viability of EMU are discussed. [ABSTRACT FROM AUTHOR]

With the point of departure in the otherwise extensive knowledge on reform and routine within the Common Agricultural Policy (CAP) of the European Union (EU), this paper argues that: (1) in order to fully appreciate the insights provided we need to look into the complementary nature of ideational and interest-based approaches; and (2) lessons can be learned by comparing several (here, three of five) reform attempts and by pointing out the importance of periods in between reforms (here, covering a time horizon stretching from 1980 to 2003). Against this background, the paper offers a comprehensive logic of policy development that may be used for other areas of study, which both draws on the insights into bargaining processes as offered by rational choice institutional theory and the insight into arguing processes as offered by constructivist approaches. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between trust and economic growth. Taking panel data and using a fixed-effects estimation for a 41-country sample over the time period from 1980 to 2004 and with a total of 129 observations, the paper points out that economic growth is negatively related to an increase in trust. This negative finding is in contrast to most empirical findings using a cross-sectional design. The common knowledge which has governed the nature of discussions in social science and economics for the last ten years, that trust is generally positively related to economic performance, must be seriously questioned. From a policy point of view an increase in trust is crucial for countries with low levels of trust, but can likely be neglected by countries with sufficient levels of trust and may even hamper economic performance in countries with high levels of trust. The relationship is tested in the context of EU countries, OECD countries and developing countries. Interpersonal trust and systemic trust is differentiated. [ABSTRACT FROM AUTHOR]

This paper examines the behavior of internal price ratios and bilateral real exchange rates of a group of four new EU member states-Estonia, Hungary, Slovakia, and Slovenia. We employ a dynamic ordinary least squares panel estimator to investigate the relative importance of demand and supply influences on the internal and external exchange rates of these countries. Our analysis shows that both supply- and demand-side effects are important, though supply-side effects dominate. The paper also examines the role that administrated or regulated prices and the productivity of the distribution sector play in real exchange rate dynamics. We show that administrated prices have been a powerful force behind price and real exchange developments for our group of accession countries. [ABSTRACT FROM AUTHOR]

This paper discusses whether a new paradigm is necessary for independent economic regulation of electricity land closely associated natural gas) systems. We begin by summarizing the nature of the traditional model of electricity reform and the place of economic regulation within it. Next we outline the drivers for changing the current model of electricity regulation, namely, the maturity of the existing model, the reality of changing circumstances, and the coming of age of climate change concern. We go on to discuss the premises on which a new model of regulation should be based. These are: remembering the successes of the current system of regulation; a new focus on processes not just outcomes; a recognition of the economics of climate change; and the appropriate management of uncertainty. We then highlight the key elements of a new model for regulation: new processes of regulation; new models of competition and the issues raised by focus on climate change. The paper draws heavily on the experience of the UK, but has direct implications for the rest of the European Union countries and for other countries whose regulatory systems mirror them. [ABSTRACT FROM AUTHOR]

A highly integrated area like the EMU features a large amount of interactions between the participating countries. In this context the interactions of monetary and fiscal policies are a crucial issue. This paper focuses on how coalitions among policymakers are formed and discusses their effects on the stabilization of output and price. We emphasize the role played by the institutional design of “cooperation forums” (as, e.g., the ECOFIN). If the coalition formation game is played without communication among the policymakers, full cooperation is an unlikely outcome. On the other hand, if policymakers can communicate, full cooperation becomes a possible equilibrium, while the complete non-cooperative solution is, in general, not a stable equilibrium. This supports the view that institutions for discussions can play a crucial role in achieving international cooperation even when these institutions are not endowed with enforcement powers. [ABSTRACT FROM AUTHOR]