European Political Economy Research Papers (original) (raw)

Recent studies show that corruption is associated with higher military spending [Eur. J. Polit. Econ. 17 (2001) 794] and lower government spending on education and health care [J. Publ. Econ. 69 (1998) 263]. This suggests that policies... more

Recent studies show that corruption is associated with higher military spending [Eur. J. Polit. Econ. 17 (2001) 794] and lower government spending on education and health care [J. Publ. Econ. 69 (1998) 263]. This suggests that policies aimed at reducing corruption may lead to changes in the composition of government outlays toward more productive spending. However, little empirical evidence has been presented to support the claim that public spending improves education and health indicators in developing and transition countries. This paper uses cross-sectional data for 50 such countries to show that increased public expenditure on education and health care is associated with improvements in both access to and attainment in schools, and reduces mortality rates for infants and children. The education regressions are robust to different specifications, but the relationship between health care spending and mortality rates is weaker.

This essay develops a contemporary analysis of the Global Economic Diplomacy. The intent is to provide a theoretical and methodological basis for further understanding of the economic relations and international negotiations complicated... more

This essay develops a contemporary analysis of the Global Economic
Diplomacy. The intent is to provide a theoretical and methodological basis
for further understanding of the economic relations and international
negotiations complicated procedure. After contextual and generic discussion on the topic, it approaches the question of the European Union role in Economic Diplomacy and its various levels of power that constitutes its institutional structure and the connection of these with others actors
capable of influencing Brussels decisions. In particular, it’s discussed the
useful capability of the European Union to control and to operate within the
international market. Sequentially, it demonstrates how the theoretical
questions tabled in the first section of the work, apply to real events. In
fact, the last segment focuses on three case studies. All of which are
relatively recent episodes within the Italian political, economic reality. The
first analyses the economic diplomacy from the central state point of view.
The timeframe covered starts with Berlusconi’s period as prime minister in
the early 2000’s to conclude with the events of the subprime financial crisis
in 2008. It’s also highlighted the deep interconnections between political
decisions and economic repercussion both on the civil society as well as on the governmental structures itself. Indeed, all this approach is linked to the effects of the globalised international market in internal affairs.
Sequentially, the final case studies take into consideration a different
perspective of the political and economic circumstances worldwide. Hence, it is intended to analyse and understand deeply how corporations use the
instruments of economic diplomacy to guarantee positive economic
outcomes, influence governments and bend policy decision-making.
Additionally, it reveals the importance of how these companies deal with an
international crisis.
The timeframe of this study is relatively short, however, incredibly dense in
events that transformed the international economic arena thoroughly.
Furthermore, the necessity to tackle the subject of economic diplomacy
from a multi-sectoral perspective generates astonishing curiosity and
enthusiasm because grants space to seek to understand throughout several academic fields. Hence, the attempt to connect, link and intertwine different study areas and academic fields into one very current and important subject was the main challenge of this work.

The theoretical literature on monetary integration has been traditionally dominated by the theory of optimum currency areas (OCA). This analysis has its origins in a debate, during the 1960s, between Mundell, McKinnon and Kenen about the... more

The theoretical literature on monetary integration has been traditionally dominated by the theory of optimum currency areas (OCA). This analysis has its origins in a debate, during the 1960s, between Mundell, McKinnon and Kenen about the criteria which delineate the optimal domain of a currency area. Between the 1980s and early-1990s the traditional OCA theory was gradually modified in line with new theoretical developments. This new phase led to a “new” OCA theory with very different policy implications compared with the traditional approach. The Treaty of Maastricht symbolized the triumph of the new OCA paradigm. The euro crisis has, instead, represented the revenge of the traditional approach. This paper traces how the optimum currency area theory has evolved over time and uses the OCA theory as a framework within which the Eurozone’s governance, crisis and future are examined. Evidence presented in this paper suggests that the Economic and Monetary Union (EMU) has had asymmetric effects on its member States while it lacks of adequate instruments to deal with them. The fact that the EMU did not constitute an OCA, according to the traditional paradigm, contributed to the crisis of the euro area. The paper leads to the conclusion that, without the introduction of supranational adjustment mechanisms, the Eurozone will not survive its own imperfections.

An examination of the short- and long-term relation between government spending and output in 51 developing countries reveals evidence consistent with cyclical ratcheting and voracity reflected in a tendency for government spending to... more

An examination of the short- and long-term relation between government spending and output in 51 developing countries reveals evidence consistent with cyclical ratcheting and voracity reflected in a tendency for government spending to increase over time. The main components of government spending are procyclical in some 40% of countries. Output and government spending are cointegrated for at least one of the spending aggregates in 70% of countries, implying a long-term relationship between government spending and output consistent with Wagner's law. In contrast, prior studies have found only weak support for Wagner's law for developing countries, although somewhat stronger support for industrial countries.

European labour movements are under severe pressure as a result of the global financial and Eurozone crises, which have been used by capital to attack unions and workers’ rights. In this essay, we will assess the response of European... more

European labour movements are under severe pressure as a result of the global financial and Eurozone crises, which have been used by capital to attack unions and workers’ rights. In this essay, we will assess the response of European labour movements to this attack and discuss to what extent relations of transnational solidarity have been established in this process. Germany has been at the core of discussions about the Eurozone crisis. While peripheral EU member states have run into severe problems, the German economy appears as the clear winner, the example to follow due to its booming exports. As it is the largest national economy within the EU, what happens in Germany has also wider implications for the rest of the EU. Hence, we will specifically focus on the response by the German labour movement to the crisis. What has been more important for German unions, solidarity with workers elsewhere or solidarity with one’s own employer? The analysis of German unions will be complemented by brief discussions of struggles in Greece, Spain and Italy. Finally, in the conclusion we will reflect on the response by labour movements at the European level to establish whether unions have been able to go beyond their traditional national environment in the search for new strategies against the attack of capital.

The European crisis is the best case study for examining both the vulnerabilities of Europe's framework for economic governance and the very process of European integration itself. This statement is true for several reasons: first,... more

The European crisis is the best case study for examining both the vulnerabilities of Europe's framework for economic governance and the very process of European integration itself. This statement is true for several reasons: first, because the European crisis is the most serious crisis the European Union has faced to date; second, because of the crisis, limits on the process of economic integration in Europe have been put to a real test; and third, because the main causes of the crisis are tied into the framework for economic governance that has been developed over the last few decades and therefore are connected to the very process of European unification itself. The primary aim of this paper is to demonstrate whether and to what extent the new framework for economic governance in Europe is largely a result of interstate bargaining and consequently whether national preferences continue to play an important role in the framework's general transformation. The economic crisis showed that important issues in economic policy concerning the change in economic governance and the role of the nation-state, which were ‘swept under the carpet’ in recent decades, must be resolved to make the European venture viable.

The chapter argues that the neoliberal doctrine, which emerged in the 1980s as a response to the crisis of the Keynesian economics, has shaped both the IMF's conditionality policy and the European economic governance. The orthodox... more

The chapter argues that the neoliberal doctrine, which emerged in the 1980s as a response to the crisis of the Keynesian economics, has shaped both the IMF's conditionality policy and the European economic governance. The orthodox prescriptions known as the Washington Consensus have formed the " one-size-fits-all approach " applied for several decades by the IMF. The EU has given constitutional strength to the neoliberal principles through the Maastricht Treaty of 1992. However, this chapter also shows that the latest global financial crisis has represented a turning point for the IMF-EU consensus on macroeconomic policy. European policy makers have adopted a hyper-conservative approach by remaining devoted to the economic orthodoxy. The Fund has, instead, engaged itself in an open-minded discussion about the best policies to promote stability and growth which has led IMF researchers to challenge all the main neoliberal tenets.

This paper argues that the European Union's formulation of a new framework for economic governance represents a hard form of the new constitutionalism intended to lock in neoliberal economic reforms amongst European member states. This... more

This paper argues that the European Union's formulation of a new framework for economic governance represents a hard form of the new constitutionalism intended to lock in neoliberal economic reforms amongst European member states. This new constitutionalism seeks to shield the economic policy-making process from democratic control in order to preserve the neoliberal character of the European Monetary Union (EMU). The struggles around reforms to Greek industrial relations serve as an example of this new constitutionalism. The conditionalities attached to the European Stability Mechanism (ESM) in the form of a Memorandum of Understanding (MOU) bypassed the established mechanisms of policy-making regard Greek industrial relations. This poses a challenge to SYRIZA as it moves forward into a post-MOU future. In particular, it raises questions as to how SYRIZA intends to deliver on its promise to restore the system of collective bargaining in Greece.

Using Molina’s and Rhodes’ conception of a Mixed Market Economy (MME), this paper examines the current economic crisis in Greece by identifying the specific internal political dynamics of Greek political economy. After a critical... more

Using Molina’s and Rhodes’ conception of a Mixed Market Economy (MME), this paper examines the current economic crisis in Greece by identifying the specific internal political dynamics of Greek political economy. After a critical discussion of the limits of Molina’s and Rhodes’ institutionalism – in particular, its problematic characterization of liberalization and its neglect of the power relations exercised in the process of structural reform – it argues that the process of ‘market colonization’ necessitates a politics of ‘de-democratization’, further exacerbating the crisis not only of Greek capitalism, but of the Greek state as well.

An expanding body of literature has investigated the economic impact of terrorist attacks. A part of this literature has focused on financial markets. We examine three research questions: whether markets' reactions to terrorism have... more

An expanding body of literature has investigated the economic impact of terrorist attacks. A part of this literature has focused on financial markets. We examine three research questions: whether markets' reactions to terrorism have changed through time; whether market size and maturity determine reactions, and whether reactions depends upon either the type of targets or the perpetrators of the attack. To this effect, a large – the London stock exchange – and a small – the Athens stock exchange – capitalization markets are used as the vehicles for the empirical investigation. Results from an event study methodology as well as from conditional volatility models suggest that size and maturity as well as specific attributes of terrorist incidents are possible determinants of markets' reactions.► Markets react to exogenous shocks such as terrorist attacks. ► Thirty-six terrorist events examined for a large and a small capitalization market. ► Event study analysis and conditional volatility models used. ► Markets react to attacks depending on the attributes of the incident. ► Differences between large and small capitalization market.

In many countries laws are not enforced against visibly present illegal immigrants. The visibly present illegal immigrants also tend to be concentrated in particular sectors. We explain such permissible illegal immigration in an... more

In many countries laws are not enforced against visibly present illegal immigrants. The visibly present illegal immigrants also tend to be concentrated in particular sectors. We explain such permissible illegal immigration in an endogenous-policy model where selective sector-specific illegality transforms illegal immigrants from non-sectorally specialized to sector-specific factors of production. Under initial conditions where no immigrants are present, the median voter opposes immigration. When, however, a population of illegal immigrants has accumulated, ongoing illegal immigration becomes an endogenous equilibrium policy, at the same time that a majority of voters opposes legal immigration and opposes amnesty that would legalize the immigrants' presence. We also establish a basis for domestic voters preferring that illegal immigrants be employed in service rather than traded-goods sectors.

"The severe crisis affecting the European Monetary Union has emphasised the prevailing interests of national governments and the lack of political leadership of European institutions, not to mention the failure of eurozone governance in... more

"The severe crisis affecting the European Monetary Union has
emphasised the prevailing interests of national governments and the lack of political leadership of European institutions, not to mention the failure of eurozone governance in terms of effective crisis management.
The present work argues that the decisions taken in March 2011 by the European Council, namely the ‘Pact for the Euro’, to design the new governance of the European Monetary Union (EMU), can be considered a necessary though insufficient step for European institutions in terms of credibility and legitimacy. By assessing the economic policy framework set up by the Pact for the Euro, this contribution underlines the need for appropriate institutions, and a stronger attitude of co-operation among Member States. It also stresses the need for transparency and a non ambiguous solution to the debt crisis. The major message of this work is that the Economic and Monetary Union must equip itself with the appropriate policy tools to manage and resolve the crisis, creating the conditions to improve the competitiveness of the peripheral countries of the eurozone and fostering growth. At the same time, however, eurozone member states and European institutions must demonstrate Greater accountability and political coherence."

We study how corruption affects economic activities of households in rural Liberia. A proxy of corruption of community leaders is obtained by directly monitoring the diversion of inputs associated with a development project. We measure... more

We study how corruption affects economic activities of households in rural Liberia. A proxy of corruption of community leaders is obtained by directly monitoring the diversion of inputs associated with a development project. We measure quantities of these inputs twice; before and after the chief stored them, and interpret any 'gaps' between these measurements as indicative of diversion by the chief (or corruption). We use this 'gap'proxy to explain variation in economic behaviour across respondents, and find that corrupt ...

By the end of 2009, a huge sovereign debt crisis hit EU’s member states. In particular, Southern European Countries’ bore the heaviest burden. Indeed, the Union’s response to the Crisis relied on the assumption that the aforementioned... more

By the end of 2009, a huge sovereign debt crisis hit EU’s member states. In particular, Southern European Countries’ bore the heaviest burden. Indeed, the Union’s response to the Crisis relied on the assumption that the aforementioned states could return to economic growth through precise measures of fiscal consolidation, known as austerity mechanisms, aimed at reducing government debt accumulation. This paper wants to assess the effect of these policies on the income distribution of two countries, namely Greece and Italy. Did Austerity packages affect negatively income inequality in these states? If so, what social and economic groups suffered the most? To give a coherent answer to these questions is the main objective of this study.
In order to strengthen our theoretical statements, we make use of empirical data taken from the Luxembourg Income Study, which refer to three distinct years: 2010, 2013, 2014.

This paper argues that explaining the development of EU social policy requires an understanding of the role of European business. It asserts that EU social policy remains dependent on the willingness of economic actors, centred on the... more

This paper argues that explaining the development of EU social policy requires an understanding of the role of European business. It asserts that EU social policy remains dependent on the willingness of economic actors, centred on the European Roundtable of Industrialists and UNICE, to facilitate steps towards a more cohesive social policy framework. The paper shows the path dependent nature of the EU integration process and the limited ability of European trade unions to reach far-reaching agreements with ...

When referring to macroeconomic governance of the EU, we mean the supply side of the economics: all policies that deal with change in inflation, price levels, rate of growth, national income, gross domestic product and unemployment.... more

When referring to macroeconomic governance of the EU, we mean the supply side of the economics: all policies that deal with change in inflation, price levels, rate of growth, national income, gross domestic product and unemployment. Therefore, in this paper, we focus on monetary and fiscal policy, as well as on banking supervision. With “asymmetric” structure, we intend to indicate the lack of equality or equivalence in the governance of the different Member States, as well as the heterogeneity of the governance, which does not prevent economic asymmetric shocks in the Union.