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451. Take the State Back Out? Comparing French Responses to Globalization in Agriculture and Shipping

Author:
Mark Aspinwall and Imtiaz Hussain
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
How autonomous is a state in today's highly interdependent international economy to pursue policies that diverge widely from the international norm? Does the degree of autonomy vary for different domestic sectors? We adapt and apply Benjamin Cohen's unholy trinity model (1993), to a comparative assessment of how France responded to globalization over agriculture and shipping, focusing on three dimensions—investment, transaction costs, and government policy responses. Although France is reputed to possess a strong state machinery (Katzenstein, 1987; Wilson, 1987; Skocpol, 1985), our analysis raises qualifications. On the one hand, regardless of government policy intentions, we find irreversible forms of disinvestment in both sectors, though different in nature—geographic for shipping, and functional for agriculture; on the other, we also find continued dependence upon the state—for aid in shipping and resisting free trade in agriculture. We further find that, although internal and endogenous, as well as external and exogenous, factors influence policy-making, the nature of these factors are different for the two sectors. We conclude by drawing implications of our findings for state-society relations and European integration.
Topic:
Agriculture, Economics, and International Trade and Finance
Political Geography:
Africa, Europe, and France

452. Sustainable Regional Development through Institutionalised Trans-frontier Cooperation in the Sofia-Skopje-Nis Triangle--Towards the Establishment of a Euroregion

Author:
Stoyan Totev and Maria Boyadjieva
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
The transition process in Central and Eastern Europe was associated with increasing intra-regional disparities. It appears also that the regional inequalities in South east Europe are relatively high creating in the same time significantly higher economic and social problems. That refers to Bulgaria, Macedonia and FR Yugoslavia whereas every reform face serious difficulties due to the lower readiness for accession to the EU structures as well as for their backwardness in the economic development. In countries like Czech Republic, Hungary and Slovenia there exist enough resources for facing the negative effects from one or another reform as well as the necessary readiness of the population the reform s to be carried out.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe, Eastern Europe, Yugoslavia, Bulgaria, and Macedonia

453. Cross border trafficking in South Eastern Europe

Author:
Janka Veselinovica
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
Borders communities are more than just entry and exit points to a country. In the world of porous borders and transborder crime, these communities take on various aspects of the activities pursued in their environs. Some of these activities are clearly evident, such as the increase in youth appearing to be drug users. Other signs are more difficult to pinpoint, as one person's businessman becomes another's smuggler. These characteristics are exacerbated by the context of a post-conflict situation where tensions and isolation cause greater conspiracy theories rather than greater cooperation and coordination.
Topic:
Arms Control and Proliferation and International Trade and Finance
Political Geography:
Europe and Maryland

454. The Federal Budget and the Regions

Author:
A.M. Lavrov
Publication Date:
01-2003
Content Type:
Working Paper
Institution:
EastWest Institute
Abstract:
Improvement of the financial relations between the Federation and the regions still remains quite an urgent problem. The Concept of Reforming Inter budgetary Relations in the Russian Federation in 1999 — 2000 is being implemented; Russia's Finance Ministry has developed the Concept of Reforming Budget Federalism in the Russian Federation to 2005, which will soon be approved by the Government; a special section on interbudgetary relations has been included in the Main Long- Term Trends of Socio-Economic Policy of the Russian Federation Government program, drafted by the Strategic Research Center.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Russia, Europe, and Bosnia

455. A Global Race for Free Trade Agreements

Author:
Arne Melchior
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The article examines the currently expanding worldwide network of bilateral free trade agreements. Following regional integration in Europe and later the Americas, the process if East Asia has accelerated from 2002. A Distinctive feature of the current stage in the expansion of FTAs beyond geographical regions and into global space, hence challenging WTOs supremacy on inter-continental trade rules. Setbacks in the WTO Doha Round may stimulate a further move towards «global bilateralism». The more such agreements in place, the greater is the incentive for new ones. Even if political obstacles hinder some agreements, the process is currently accelerating. While it is rational for countries to pursue such agreements, they should in parallel work for multilateral trade liberalisation in order to reduce the discriminatory impact of FTAs. This is needed if we are to avoid that «Most Favoured Nation» treatment under the WTO actually becomes «Least Favoured Nation» treatment: Rules that only apply to countries that are left outside the «free trade race».
Topic:
Economics, Globalization, International Trade and Finance, and Politics
Political Geography:
America, Europe, and East Asia

456. Study of selected Fredskorpset exchange projects

Author:
Axel Borchgrevink
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
The present study examines nine Fredskorpset exchange projects, in order to assess the degree to which the goals specified have been reached. The basis for the exchanges is the partnerships established between institutions in Norway and counterpart entities in the South. The projects studied encompass a wide variety of such partnerships, illustrating the flexible and innovative attitude that Fredskorpset has shown during its first two years of operation. By basing its work on such partnerships, Fredskorpset has avoided some of the weaknesses of traditional volunteer programs. In terms of achievements, there are variations among the projects. While individual learning of participants was strong in all cases, the degree to which institutional benefits were achieved varied. Well-matched partners with sufficiently strong institutional structures; thorough planning of exchanges; and participants selected in accordance with well-defined needs for professional skills were seen to be important factors for successful projects.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
Europe and Norway

457. Economic Survey of euro area, 2003

Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Entering its fifth year of existence, the European Economic and Monetary Union (EMU) has met major headwinds. At the advent of the single currency the euro area experienced solid economic growth, with unemployment falling and public finances rapidly improving. However, a number of structural problems were exposed with the cyclical downturn since 2001, from which the area is recovering only hesitantly. The challenges facing policy makers at present are both of a short-run and medium-run nature. Policy makers are currently grappling with sluggish demand. Responding to this challenge, monetary policy has been eased and fiscal policy reacted through the automatic stabilisers. However, the room for manoeuvre was reduced by lingering inflationary pressures and earlier insufficient fiscal adjustment in several member states. Meanwhile the euro exchange rate has appreciated significantly. Over the medium term, the Community has set ambitious targets and a vast programme for enhancing the performance of labour, product and financial markets. This programme needs to be pursued with vigour, thereby raising the odds of large gains in trend growth and jobs while making it easier to achieve sound fiscal positions.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Europe

458. Economic Survey of France, 2003

Publication Date:
07-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
After several years of rapid expansion, the French economy has entered into a period of below potential growth, with a negative output gap opening up. Monetary conditions have been relaxed, while fiscal policy has eased excessively, provoking the European Commission to initiate an excessive deficit procedure. As uncertainty dissipates towards the middle of this year, the economy should pick up speed, reaching a growth rhythm of around 2 per cent in 2004. Nevertheless, over the medium term, in the absence of substantial reforms the ageing of the population risks threatening economic and fiscal equilibrium. Current pension and healthcare reform initiatives and plans to redress spending over the medium term go in the right direction. However, in order to ensure medium and long-term fiscal sustainability, additional policies to slow the expansion of health and pension spending are required, while efforts to raise employment rates and potential output are needed to improve the economy's ability to finance future ageing-related expenditure. Here, programmes that offer the possibility of on-the-job training should be expanded so as to reactivate young and lowskilled workers, while reforms to early-retirement schemes and the pension system need to be continued so as to restore work incentives for older workers. Ongoing tax and labour market reforms and policies to facilitate the development of high-tech and fast growing enterprises, which should help promote investment and higher productivity growth, also need to be pursued. The opening of the capital of stateowned enterprises and their eventual privatisation, and planned improvements to governance structures should help promote growth, but revenues from sell-offs ought to be used to reduce debt. Finally, in order to better manage the totality of public expenditures, the authorities need to implement reforms that can be used to ensure that all spending organisms contribute to controlling spending. Here, it will be necessary to implement mechanisms that would improve the effectiveness of measures to control healthcare spending. Moreover, decision-makers need to be more directly confronted with the long-term consequences of their actions. Initiatives such as decentralisation and the new budget framework law should help in this regard. Pursuit of reforms along all of these lines should permit society to meet the fiscal challenge posed by population ageing, while retaining high levels of service.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Europe and France

459. Feasible Financing Strategies for Environmentally Related Infrastructure

Publication Date:
05-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
An important obstacle to achieving environmental goals in many countries has been the failure to adequately address the associated financial issues: the costs of achieving goals; how those costs could be minimised; and the challenge of matching costs with available resources. The need for a fresh approach has become evident as central European countries come to terms with mobilising substantial financial resources to comply with challenging EU environmental requirements, and as the countries of Eastern Europe, Caucasus and Central Asia (EECCA) struggle to maintain even the low levels of services currently delivered by environmentally-related infrastructure.
Topic:
Economics, Environment, and International Trade and Finance
Political Geography:
Europe, Central Asia, and Eastern Europe

460. Financial Conglomerates: The Future of Finance?

Author:
Robert Litan and Richard Herring
Publication Date:
04-2003
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
In 1999, after nearly twenty years of debate, the U.S. Congress finally passed legislation permitting bank affiliations with all sorts of other financial enterprises, and vice versa. In this step, the United States joined many other countries — especially in Europe and, more recently, Japan — in allowing the operation of financial conglomerates. But are financial conglomerates the wave of the future in finance? And if so, how are they to be regulated? These were the two central questions addressed in the fifth annual conference of the Brookings-Wharton Papers on Financial Services, an annual volume published by the Brookings Institution Press. The conference, held in October 2002 in Washington, D.C., convened financial services experts from around the world. The papers presented at the conference suggest, generally, that while the future may see more financial conglomerate activity than it has in the past, there still will be a role for specialist, or "monoline" financial companies. As for regulation, there is no settled model: some nations will pursue consolidated supervision, with authority over entire conglomerates vested in a single authority (often the central bank), while others will still regulate the pieces of diversified financial enterprises along structural lines.
Topic:
Economics, Government, Industrial Policy, and International Trade and Finance
Political Geography:
United States, Europe, and Washington

461. Liberalizing Agricultural Trade and Developing Countries

Author:
David Orden, Rashid S. Kaukab, and Eugenio Diaz-Bonilla
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
A diverse group of development and trade liberalization advocates agree that reduction of agricultural protection and subsidization in the world's wealthy countries is necessary to strengthen both international growth opportunities and the global trade regime. According to the consensus reached among participants attending a conference cosponsored by the Carnegie Endowment for International Peace and the Cordell Hull Institute, WTO Doha Round negotiations on agriculture should compel policy changes in industrialized countries to limit trade-distorting domestic subsidies for agricultural products, lower tariffs, increase market access, and eliminate export subsidies. In response to temporary hardships caused by an overall reduction in agriculture support, governments should have the flexibility to adopt temporary or limited domestic, and perhaps international, compensatory policies. Significant differences in perspective and policy prescriptions were expressed by conference participants about the appropriate speed and scope of agricultural liberalization in developing countries, especially if progress is not made toward reduced support for agriculture in developed countries.
Topic:
Development, International Organization, International Trade and Finance, and Science and Technology
Political Geography:
United States and Europe

462. The Accession Economies' Rocky Road to the Euro

Author:
Barry Eichengreen, George C. Pardee, and Helen N. Pardee
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Now that the decision has been taken to admit to the European Union eight of what were once called the transition economies, attention has naturally turned to whether these countries should also join Europe's monetary union. But where is a consensus that joining the EU, while posing certain difficulties, will be a source of net benefits, there is no such consensus about the adoption of the euro. In part this uncertainty reflects the unusual difficulty that monetary economists have in translating theory into policy. We specialists, in other words, cannot even agree amongst ourselves.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Europe

463. The Dog that Would Never Bite? The Past and Future of the Stability and Growth Pact

Author:
Martin Heipertz and Amy Verdun
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper analyses the underlying reasons for the creation of the Stability and Growth Pact (SGP) and its subsequent development in recent years. The paper examines the economic and political factors behind it, including the role of economic ideas, experts, politicians, institutional arrangements in the Maastricht Treaty, domestic politics, and the exceptional position of Germany in the realm of monetary integration in the EU. It concludes that a set of commonly held beliefs together with a corresponding power-political constellation explain the creation of the SGP.
Topic:
International Political Economy, International Trade and Finance, and Treaties and Agreements
Political Geography:
Europe and Germany

464. Stabilizing Postwar Europe: Aligning Domestic and International Goals

Author:
Armin Schäfer
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This paper looks at the historical developments that led to the Schuman Plan in 1950, which today is seen as a starting signal for the European integration process. It argues that this announcement by the French foreign minister constituted a genuine change of strategy that can only be understood in the light of the preceding historical chain of events. The first steps of European integration were part of a search for suitable institutions capable of dealing with Europe's economic and political problems, which also involved the Bretton Woods institutions, Marshall Aid and the OEEC, and, finally, the ECSC. These organizations' respective fate depended on the strategies of key states, which in turn were driven by domestic concerns. Aligning their interests took several steps and was only completed when all three organizations existed in parallel. Throughout this process, all states had to abandon their preferred course of action and learn to settle for second best.
Topic:
Civil Society, Economics, Government, and International Trade and Finance
Political Geography:
Europe

465. A Comparative Study of Business Lobbying in the European Parliament, the European Commission and the Council of Ministers

Author:
Pieter Bouwen
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The aim of this paper is to empirically test a theory of access that investigates the logic behind the apparent ad hoc lobbying behavior of business interests in the EU multi-level system. First, I propose the theoretical framework that attempts to explain the access of different organizational forms of business interest representation (companies, associations and consultants) to the European Commission, the European Parliament and the Council of Ministers. The degree of access to these institutions is explained in terms of a theory of supply and demand of access goods. Access goods concern information that is crucial in the EU policy-making process. In return for access to an EU institution, business interests have to provide the access good(s) demanded by that institution. I then derive a number of specific hypotheses about the access of the aforementioned organizational forms. These hypotheses are analyzed in an extensive empirical study of the EU financial services sector. On the basis of 126 exploratory and semi-structured interviews the hypotheses are checked across the three EU institutions.
Topic:
Economics, Human Welfare, and International Trade and Finance
Political Geography:
Europe

466. The International Finance Facility: The UK HM Treasury-DFID Proposal to Increase External Finance to Developing Countries

Author:
George Mavrotas
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper discusses the International Finance Facility (IFF), a joint HM Treasury-DFID proposal to increase development aid substantially for the Millennium Development Goals to be achieved by 2015. The main conclusion of the paper is that the proposed IFF is a promising, forward-looking and creative proposal for it implies a substantial increase in fresh, predictable and stable aid as well as a robust financial structure. However, there are a number of concerns about potential shortcomings of the proposal, namely its underlying assumptions about continuous commitment on behalf of the donor community towards the implementation of the IFF during the life of the Facility and most importantly its heavy reliance on political coordination among donor countries participating in the proposed scheme. Potential absorptive capacity constraints in IFF aid-recipient countries may be also relevant. Achieving its huge political task as well as alleviating the crucial constraints regarding its successful implementation seem to be the main challenges this innovative proposal needs to deal with in the near future.
Topic:
Development, International Cooperation, and International Trade and Finance
Political Geography:
United Kingdom and Europe

467. Regional Output Differences in International Perspective

Author:
Alan Heston and Bettina Aten
Publication Date:
08-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Accurate regional estimates of output are desired as an indicator of level of development and as a variable used to explain internal migration, demand patterns, fertility and other aspects of behaviour. This chapter explores one often neglected aspect of regional income differences, namely that due to price differences or regional purchasing power parities. When nominal regional income measures are adjusted for these price level differences they are termed real regional incomes. The preferred method of estimating regional purchasing power parities by detailed price comparisons is discussed for Brazil, the United States and the European Union. The empirical thrust of the chapter is an investigation of different methods for estimating regional real incomes based on PPP data for 167 countries and nominal regional incomes and other data for about 870 administrative areas at the subnational level. Even in their present form we believe the real income estimates provided for the geographical units present opportunities for understanding the world economic structure.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
United States, Europe, and Brazil

468. The EU's Everything But Arms Initiative and the Least-developed Countries

Author:
Lucian Cernat, Sam Laird, Luca Monge-Roffarello, and Alessandro Turrini
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Using a computable general equilibrium simulation model and partial equilibrium simulations, based on the SMART model, the paper attempts to assess the aggregate worldwide distribution of gains and losses of the EU's Everything But Arms (EBA) initiative for both LDCs and third developing countries under different scenarios.
Topic:
Development and International Trade and Finance
Political Geography:
Europe

469. Integrating European Business

Publication Date:
03-2003
Content Type:
Working Paper
Institution:
Chatham House
Abstract:
The first speaker considered the questions, 'What was expected from the internal market/ “1992” Programme?' and 'What is the single market?' The single market is the cornerstone of the EU, enshrined in Article 3 of the Treaty on European Union. It had not yet been completed but the Commission had argued, nevertheless, that EU GDP is 1.8% higher than it would have been without the single European market (SEM).
Topic:
International Trade and Finance and Political Economy
Political Geography:
Europe

470. Fundusz Mikro An Experiment In Partnership–Based Microfinance 1998 – 2002.

Author:
Witold Szwajkowski
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
Aspen Institute
Abstract:
Fundusz Mikro's evolution has to be understood in the context of Poland's emergence from communism during the 1990s. For businesses, the challenge of that time was not merely to learn new skills, but to unlearn old habits and attitudes while at the same time taking on new ones appropriate to a market economy. Because of this shift, Fundusz Mikro (FM) found that it had to do more than lend money; it had to learn to play a more pro-active role in changing the culture in which business took place. The financial crisis of1998 and the harder economic times since then were an added incentive for FM to adapt its approach, products, and finally its mission.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Europe and Poland

471. Does venture capital investment spur employment growth?

Author:
Ansgar Belke, Rainer Fehn, and Neil Foster
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Anglo-Saxon countries have been successful in the 1990s concerning labour market performance compared to the former role models of Germany and Japan. This reversal in relative economic performance might be related to idiosyncracies in financial markets, with bank-based financial markets as in Germany and Japan being possibly inferior to stock-market based financial markets in turbulent times and when approaching the economic frontier. A cleavage is related to venture capital markets which are flourishing in Anglo-Saxon but not in German-type financial markets. Venture capital is crucial for financing structural change, new firms and innovations and therefore possibly also nowadays for employment growth.
Topic:
Economics and International Trade and Finance
Political Geography:
Japan, Europe, and Germany

472. Trade Policy Issues for the Euro-Med Partnership

Author:
Paul Brenton and Miriam Manchin
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The economic prospects of the Mediterranean countries are currently constrained by the lack of ambition in their relationships with each other and with their major export market, the EU. These economic relationships are limited by a lack of coverage (agriculture and services are effectively excluded), by a lack of depth (substantial technical barriers to trade remain due to differences in regulatory requirements and the need to duplicate testing and conformity assessment when selling in overseas markets), and they are limited by rules (restrictive rules of origin and lack of cumulation limit effective market access). In addition, the rest of Europe, including Turkey, is integrating at a faster pace to create a Wider European Economic Space. If nothing is done to invigorate the integration process in the Mediterranean, then the region will fall (further) behind relative to other regions on the periphery of the EU, such as the Balkans and Russia and the Ukraine.
Topic:
International Trade and Finance and Regional Cooperation
Political Geography:
Russia, Europe, Turkey, Ukraine, Middle East, and Balkans

473. The Euro-Mediterranean Partnership: Unique Features, First Results and Future Challenges

Author:
Eric Philippart
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Many things have changed since the launch of the Euro-Mediterranean Partnership (EMP). Despite the virtual collapse of the Middle East Peace Process (MEPP), the Partnership has survived, has slowly moved forward on many fronts and seems to be gathering pace on the economic side. This working paper aims at presenting the new contours of the Partnership, as well as evaluating its scope of action, logic of intervention, organisational setting and policy output from 1995-2003. A brief mid-term outlook is offered by way of conclusion.
Topic:
International Trade and Finance and Regional Cooperation
Political Geography:
Europe and Middle East

474. Mapping Israel's Policy Options regarding its Future Institutionalised Relations with the European Union

Author:
Alfred Tovias
Publication Date:
01-2003
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The nature of the Euro-Mediterranean Partnership will change with the Enlargement of the EU to include 13 additional members since all Mediterranean non-Arab countries will be in the EU but Israel. Israel will be obliged to revise its relations with the EU. The paper explores some possible policy options open to Israel. After discarding a continuation of Israel's present status in the Euro-Mediterranean Partnership, a second policy option gauges advantages and disadvantages for Israel of obtaining membership in the European Economic Area, i.e. full economic integration without political integration in the EU. Taking into consideration quantum political changes which have taken place in and around the EU, as well as in the Middle East, a third Israeli policy option postulates EU membership, so as not to be left behind and which would bring a "new vision" for Israel, once peace with its neighbours is in the offing, allowing for a complete change of the present terms of reference.
Topic:
International Trade and Finance and Regional Cooperation
Political Geography:
Europe, Middle East, and Israel

475. The Civil False Claims Act: Using Lincoln's Law to Protect the European Community Budget

Author:
Alan Riley
Publication Date:
11-2003
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper argues that the US Civil False Claims Act of 1986 (hereafter CFCA) could provide the European Community with a means to effectively protect the largely decentralised revenue collection and expenditure of the Community bud get. It also offers a solution to the difficulty of creating an effective means of investigation and penalisation of cross-border fraud without having to create a Community criminal law or a European Public Prosecutor.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

476. EU Accession and the Euro: Close Together or Far Apart?

Author:
Peter B. Kenen and Ellen E. Meade
Publication Date:
10-2003
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In May 2004, ten countries are due to join the European Union. They are therefore obliged to join the European Monetary Union (EMU) and adopt the euro as their national currency. Most of them, moreover, have been eager to do that. None of them sought an opt-out of the sort that Britain and Denmark obtained in 1991, when the Maastricht Treaty was drafted. Membership in EMU is not automatic, however, because the accession countries must first satisfy the preconditions contained in the Maastricht Treaty. Although those preconditions are rigorous, and some of the accession countries are still far from meeting them, most of those countries have indicated that they want to enter EMU at the earliest possible date.
Topic:
Economics and International Trade and Finance
Political Geography:
Britain, Europe, and Denmark

477. Free Movement of People, Goods, Services and Capital in View of the Context of Stability Pact

Author:
Mladen Stanicic
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
Austrian National Defence Academy
Abstract:
The Stability Pact is a strategic concept whose aim is to warrant long- term peace and stability in South-Eastern Europe. It is becoming an indispensable element of the global security structure which is currently being constructed in relations between the big powers, the USA, Russia and China, with the active participation of the United Nations, the European Union, international financial institutions and individual countries. As one of the sponsors of the pact, the European Union is keenly interested in stability and peace among its next-door neighbours, some of whom are covered by the pending eastern enlargement. This enlargement is intended to transcend centuries of civilisational and religious divisions in Europe, the causes of many political and armed conflicts in the past. The vision of Europe in the 21st century, reaching all the way to the borders of the former Soviet Union, is that of a multicultural community encompassing states with diverse civilisational, religious, ethnic and cultural characteristics.
Topic:
Security, Globalization, International Cooperation, and International Trade and Finance
Political Geography:
Russia, United States, China, Europe, and Eastern Europe

478. Innovation and Social Capital in Silicon Valley

Author:
Martin Kenney and Donald Patton
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
The high cost regions of Europe, North America, and Japan recognize that the key to their economic vitality is innovation. Increasingly, many also accept that the primary units of competition based on high quality, innovative products are not nations, but firms within regions, some of which occasionally bridge national boundaries. This has resulted in a significant increase in interest in the nature and functioning of such regional economies, variously known as clusters or industrial districts.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Europe, Israel, East Asia, and North America

479. Why Delegate the Allocation of Foreign Aid to Multilateral Organizations? Principal-Agent Problems and Multilateralism

Author:
Helen Milner
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Center for International Studies, University of Southern California
Abstract:
Why do countries delegate the distribution of foreign aid to international institutions? Specifically, why have the advanced industrial countries chosen to distribute part of their foreign aid through multilateral organizations, such as the European Union (EU), World Bank, IMF, UN, and regional development banks (RDBs)? The delegation of aid provision to an international institution is puzzling. Why would governments relinquish control over their aid if they are a useful instrument of statecraft? Governments delegate aid delivery to international institutions when their publics lack information about the consequences of aid and fear that their governments will deviate from their wishes concerning its use. By using the international organization to send aid, the government issues a credible signal to voters about the use of foreign aid. This signal leaves all actors better off by helping to solve a principal-agent problem in domestic politics. When publics are skeptical about the benefits of aid, governments are more likely to turn aid over to multilateral organizations in order to reassure taxpayers that their money is being well spent. Using data on about 20 donor countries of the OECD from 1960-2000, I investigate the sources of multilateral giving, showing that public opinion has the expected negative relationship to multilateral aid-giving.
Topic:
International Relations, Foreign Policy, Economics, and International Trade and Finance
Political Geography:
Europe and United Nations

480. North American Economic Integration Policy Options

Author:
Earl H. Fry
Publication Date:
07-2003
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
At the end of 2003, the North American Free Trade Agreement (NAFTA) will have been in effect for a decade, and although the accord will not be fully implemented for another five years, almost all of its important provisions are already in place. The model for NAFTA was the Canada-U.S. Free Trade Agreement (CUSFTA), which was put in motion in 1989 and was to be fully implemented within 10 years but was superseded by NAFTA after only five years in operation. NAFTA itself has created the world's largest free-trade area, encompassing the United States, Mexico, and Canada; 21.3 million square miles of territory; 422 million people; almost $12 trillion in yearly production; and $615 billion in annual three-way merchandise trade. North American trade, investment, government-to-government, and people-to-people exchanges have increased dramatically over the past decade and decisionmakers in Washington, D.C., Mexico City, and Ottawa will soon have to consider whether continental economic integration should move to the next level in the form of a customs and monetary union or even a common market possessing many of the attributes of the European Union (EU).
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Europe, Canada, Latin America, Central America, North America, Mexico, and Ottawa

481. Ten Points on the Euro-Mediterranean Partnership

Author:
Álvaro de Vasconcelos
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The Barcelona Process is by far the most relevant of the various existing Euro-Mediterranean initiatives, not only because it has a multilateral character but also because it is intended to be a multilayered process, comprising political and security as well as economic and social or human dimensions.
Topic:
Security, Human Rights, and International Trade and Finance
Political Geography:
Europe, Middle East, and Barcelona

482. Inflation Persistence and Optimal Monetary Policy in the Euro Area

Author:
Pierpaolo Benigno and J. David Lopez-Salido
Publication Date:
12-2002
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In this paper we first present supporting evidence of the existence of heterogeneity in inflation dynamics across euro area countries. Based on the estimation of New Phillips Curves for five major countries of the euro area, we find that there is significant inertial (backward looking) behavior in inflation in four of them, while inflation in Germany has a dominant forward looking component. In the second part of the paper we present an optimizing agent model for the euro area emphasizing the heterogeneity in inflation persistence across regions. Allowing for such a backward looking component will affect the evaluation of the degree of nominal rigidities relevant for the monetary policy design. We explore the welfare implications of this circumstance by comparing the adjustment of the economies and the area as a whole in response to terms-of-trade shocks under four monetary policy rules: fully optimal, optimal inflation targeting, HICP targeting and output gap stabilization.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe

483. The Road to Adopting the Euro: Monetary Policy and Exchange Rate Regimes in EU Candidate Countries

Author:
Fabio M. Natalucci and Federico Ravenna
Publication Date:
12-2002
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper examines the choice of exchange rate regime in EU candidate countries during the process of accession to the European Monetary Union (EMU). In the presence of real exchange rate appreciation due to the Balassa-Samuelson effect, candidate countries face a trade-off between trend appreciation of the nominal exchange rate and high inflation rates. In a general equilibrium model of an emerging market economy, we show that under a fixed or heavily managed exchange rate the Balassa-Samuelson effect might prevent compliance with the Maastricht inflation criterion, unless a contractionary policy is adopted. We then discuss how the real exchange rate appreciation shifts the output gap/inflation variance trade-off, increasing the cost of managing or fixing the exchange rate. As a consequence, the requirement of membership in the Exchange Rate Mechanism (ERM-II) and the Maastricht inflation criterion constrain the policy choice while providing no additional benefit to countries credibly committed to joining the Euro. Finally, we show that relaxing either the exchange rate requirement or the inflation criterion has sharply different business cycle implications for the accession countries.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Europe

484. Monetary Union, Price Level Convergence, and Inflation: How Close is Europe to the United States?

Author:
John H. Rogers
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In light of 50 years of economic policies designed to integrate Europe -- culminating in the elimination of euro zone national currencies in early 2002 -- and a vast academic literature on international economic integration, it is of interest to assess how far European integration has come in practice. Using a unique data set, I document the pattern of price dispersion across European and U.S. cities from 1990 to 2001. I find a striking decline in dispersion for traded goods prices in Europe, most of which took place between 1991 and 1994. The level of traded goods price dispersion in the euro area is now quite close to that of the United States. A decline in dispersion of non-tradeables prices in Europe has also taken place, but to a smaller extent. For U.S. cities, there is no evidence of a decline in price dispersion, even for tradeables. I examine several possible explanations for the decline in European price dispersion, including harmonization of tax rates, convergence of incomes and labor costs, liberalization of trade and factor markets, and increased coherence of monetary policy. I also investigate how much of the variation in national inflation rates in Europe can be explained by price level convergence. Finally, after showing that prices in likely next-round entrants into the euro zone are well below prices in Western Europe, I discuss the potential inflationary consequences of accession into monetary union for Eastern Europe.
Topic:
Economics and International Trade and Finance
Political Geography:
United States and Europe

485. Equity Prices, Household Wealth, and Consumption Growth in Foreign Industrial Countries: Wealth Effects in the 1990s

Author:
Carol C. Bertaut
Publication Date:
04-2002
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Although most recent empirical research regarding the size and significance of the impact of changes in wealth on consumption has looked for such effects in the United States, equity prices in the 1990s rose considerably in most other industrial countries as well. This paper investigates the strength of the wealth effect across countries. Using a variety of methods, I find evidence of significant wealth effects in the United Kingdom and Canada of a size comparable to that in the United States, reflecting the importance of equities in aggregate household wealth in these countries. A significant wealth effect is also evident in Japan, but because household wealth has changed little on balance in Japan in recent years, this channel has been less important in explaining Japanese consumption growth in the second half of the 1990s. Despite a rapid appreciation in equity prices and an increase in equity ownership in the major continental European countries since 1995, equities remain a less important form of household wealth in most of these countries, and the consumption response to changes in wealth remains limited. However, in some smaller European countries where equity issuance is more common, the emerging evidence suggests that wealth effects may be more important.
Topic:
International Relations, Economics, Globalization, and International Trade and Finance
Political Geography:
United States, United Kingdom, Europe, and Canada

486. International Coordination of Macroeconomic Policies: Still Alive in the New Millennium?

Author:
Joseph E. Gagnon, Dale W. Henderson, Brian M. Doyle, and Laurence H. Meyer
Publication Date:
04-2002
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In this paper we provide two building blocks for an analysis of international policy coordination: (1) a survey of models of policy coordination, and (2) an account of experience with policy coordination among the G-7 countries and within Europe since the breakdown of the Bretton Woods System. Using these building blocks, we investigate the correspondence between the models and experience and attempt to draw lessons for both the modelers and the practitioners. We find that the correspondence is close enough that the models help in analyzing several instances of actual policy coordination, but that the correspondence could be even closer. As for lessons for modelers, we suggest that they devote more attention to the analysis of information exchange, a key feature of practical policy coordination; to the coordination of different types of policies; to the ramifications of political divisions within countries; and to the implications of market irrationality and speculative bubbles. As for lessons for policy makers, we suggest that they give more consideration to the choice of their ultimate objectives, in particular to whether the current account should always be close to balance; to achieving better internal policies; and to the greater use of fiscal policy as a stabilization tool.
Topic:
International Relations, Economics, Globalization, and International Trade and Finance
Political Geography:
Europe

487. Regional Influences on U.S. Monetary Policy: Some Implications for Europe

Author:
Ellen E. Meade and D. Nathan Sheets
Publication Date:
02-2002
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper looks at the monetary policy decisions of the U.S. Federal Reserve and asks whether those decisions have been influenced solely by national concerns, or whether regional factors have played a role. All of the Federal Reserve's policymakers have some regional identity, i.e., either their positions explicitly carry some regional affiliation or their region of origin is a factor that must be considered in the selection process. This research is relevant for the Fed, and it may also be relevant for Europe's fledgling central bank in Frankfurt. Critics have asserted that ECB policymakers have an incentive to base policy on national developments and respond to national political pressures. We find that Fed policymakers do take into account developments in regional unemployment when deciding monetary policy, and that these regional developments are more important for central bankers at the hub than in the spokes. These findings are robust to a variety of different specifications of the voting equation.
Topic:
Economics and International Trade and Finance
Political Geography:
United States and Europe

488. International — Auto Consolidation

Publication Date:
06-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
Fiat announced a sharp fall in May car sales in Italy on June 5 and its debt is under review for a possible ratings downgrade. The world's sixth-largest car maker is one of many manufacturers facing difficult profitability conditions. Global sales volumes in the industry have remained high, but profits have not followed suit. Mergers, the most rational panacea, are confounded by bitter experience.
Topic:
Economics, Industrial Policy, and International Trade and Finance
Political Geography:
United States and Europe

489. International — Weak Dollar

Publication Date:
05-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
This week's piece is on the international implications of a weaker US dollar. Seventeen weeks of dollar weakness raise the questions of whether the dollar is on a sustained path of decline, and what the implications are internationally. The 6% nominal effective decline in the dollar since January 31 might be sustained due to US financial and macroeconomic factors. Overall, the effect would be positive for Europe and the United States, and might encourage domestic demand growth in export-oriented Asian economies.
Topic:
Economics and International Trade and Finance
Political Geography:
United States and Europe

490. European Union — FSAP Progress

Publication Date:
04-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
This week's piece is on the progress towards completing the Financial Services Action Plan (FSAP). Amid continuing difficulties in key areas, pressure is growing for further advances in completing the single market for capital and financial services.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe

491. International — Global Economy

Publication Date:
04-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
A textbook approach to economic growth suggests the world is in for a difficult period. However, there are reasons to believe that the global economy will defy convention. The global economy will continue to support US external imbalances for the medium term, barring marked deterioration in certain areas of US weakness. However, European integration and Asian development could provide alternative sources of global demand, relieving the current imbalance of global dependence on the US economy.
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
United States and Europe

492. Eastern Europe — Monetary Integration

Publication Date:
03-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
This week's piece focuses on the role of ERM II in the East European accession candidate countries. The EU's Exchange Rate Mechanism has emerged as the primary vehicle for the integration of the CEEC-10 accession countries into the European Monetary Union.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe

493. European Union — Insecure Recovery

Publication Date:
03-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
This week's piece examines the outlook for euro-area economic performance. Despite some indications of improvements in the global and euro-area economies, it is too early to assume that these signify a lasting recovery.
Topic:
Economics, International Political Economy, and International Trade and Finance
Political Geography:
Europe

494. United States/European Union — WTO Sanctions

Publication Date:
02-2002
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
US trade officials said last week that EU estimates of damages arising from US export subsidies were exaggerated. EU trade officials have asked the WTO to approve 4 billion dollars worth of trade sanctions against the United States, after the latter lost an appeal before the WTO on the tax treatment of foreign-source income — judged to be illegal export subsidies. Washington must amend its tax laws or face the prospect of retaliatory trade restrictions.
Topic:
Economics and International Trade and Finance
Political Geography:
United States, Europe, and Washington

495. Back to the Nest? Europe's Relations with the African, Caribbean and Pacific Group of Countries

Author:
John Ravenhill
Publication Date:
12-2002
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Europe's association with African, Caribbean and Pacific (ACP) countries was the first of its interregional relationships. In the nearly half century since the signature of the Treaty of Rome, it developed into Europe's most institutionalized and multidimensional interregional relationship. It embraces not only trade and investment issues but also a development "partnership" that includes what has traditionally been the EU's largest single aid program, a joint parliamentary assembly, meetings of organizations representing civil society, and a dialogue on human rights. This chapter examines the factors that have shaped this relationship over the last four decades. The principal focus is on the trade regime, not just for consistency with the other contributions to this volume but also because it is in its trade dimension that the relationship has changed most dramatically over time.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Africa, Europe, Caribbean, and Rome

496. Lessons of the Euro for the Rest of the World

Author:
Barry Eichengreen
Publication Date:
12-2002
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Europe's single currency is widely invoked as a potential solution to the monetary and exchange rate problems of other regions, including Asia, Latin America, North America and even Africa. This lecture asks whether the Europe's experience in creating the euro is exportable. It argues that the single currency is the result of a larger integrationist project that has political as well as economic dimensions. The appetite for political integration being less in other parts of the world, the euro will not be easily emulated. Other regions will have to find different means of addressing the tension between domestic monetary autonomy and regional integration. Harmonized inflation targeting may be the best available solution.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Africa, Europe, Asia, and Latin America

497. The Development of Europe's Linkages with East Asia: Hybrid Trans-Regionalism?

Author:
Julie Gilson
Publication Date:
12-2002
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
This chapter argues that the EU-Asia trans-regional relationship is still very hard to measure but that there is developing both a notion of economic Asia, a desire to collectivise responses in the face of differentiated resource allocation and a growing dominance of the form of regionalism demonstrated by the EU.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe and Asia

498. The European Union and North America

Author:
Edward A. Fogarty
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
This paper assesses the past, present, and future of transatlantic commercial relations in terms of EU trade strategies. After surveying the medium-term trajectories of the relationships with the United States, Mexico, and Canada-both separately and as a group-it will consider several possible sources of European Union trade preferences vis-à-vis NAFTA, including interest groups' incentives to seek to capture national and European governing institutions, the balance between the European Commission and the Council of Ministers, European leaders' desire to balance against overweening American power, and possible attempts to construct either a common Western identity or, alternatively, a European identity in contradistinction what the United States seems to represent. The hope is that these different approaches provide a contrasting set of interpretations whose comparison side-by-side allows new insights into the dynamics governing EU-North American trade relations.
Topic:
International Trade and Finance
Political Geography:
United States, Europe, Canada, North America, and Mexico

499. Mortgage Default Insurance in the U.S.: Implications for Russia

Author:
Raymond Struyk and Douglas E. Whiteley
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Urban Institute
Abstract:
The objective of this paper is to introduce the concept of mortgage default insurance as developed in the United States into the context of Russian mortgage lending. The first part of the paper discusses the broad principles and operations of mortgage default insurance offered by private companies as it works in the United States. The pricing of this product and the preconditions for offering such insurance are highlighted. The second section outlines the operation of the U.S. government-supported default insurance offered by the Federal Housing Administration (FHA). The final part applies the foregoing information to the situation in Russia today and concludes that the conditions necessary for launching mortgage default insurance do not currently exist in the country. Nevertheless, there are a number of essential actions that can and should be taken over the next several months to put Russia on the road to establishing such insurance in a few years. The paper finishes with a possible action plan for the next two years.
Topic:
Development, Government, and International Trade and Finance
Political Geography:
Russia, United States, Europe, and Asia

500. Regulatory Europeanization, National Autonomy and Regulatory Effectiveness: Marketing Authorization for Pharmaceuticals

Author:
Jürgen Feick
Publication Date:
11-2002
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The EC harmonized market entry regulation for pharmaceuticals from the early sixties on, but it achieved neither its goal of uniform national regulatory decisions nor that of automatic mutual recognition. Subsequent attempts to Europeanize the procedures themselves resulted in two alternatives in 1995: a Centralized Procedure for innovative pharmaceutical products implemented at the EU level, and a Decentralized Procedure which tries to assure mutual recognition. First, the paper analyzes the distinctive modes of Europeanization employed in these regulatory alternatives, examining both their impact on the effectiveness of European governing and the balance they strike between European interventionism, national participation and national autonomy. Second, it tries to assess whether Europeanization furthers the goals of pharmaceutical market entry policy as defined in European regulations – public health protection, creation of a single market and the reduction of regulatory costs to industry. There is little evidence that the public's health is less well protected when regulation is Europeanized. Only the Centralized Procedure contributes significantly to the goal of establishing a single market. Regulatory costs in terms of approval time did go down especially for pharmaceutical firms using the Centralized Procedure, mainly because of efficiency-enhancing legal provisions and institutionally induced regulatory competition between national authorities.
Topic:
Economics, International Trade and Finance, and Science and Technology
Political Geography:
Europe