Cross‐border regionalisation in the ‘New Europe’ ‐ theoretical reflection with two illustrative examples

Regionalisation has recently become a catchword both in political practice and academic discourse. Even if the idea of the ‘Europe of the Regions’ is no longer uncritically accepted, regional imagination still frequently informs the analysis of the European political order. This article seeks to chart alternative ways of understanding political change in Europe. It first outlines the current understanding of the role of regions in Europe, and seeks to put contemporary ideas into historical perspective. The article then examines the standard way of analysing regionalism, the ‘top‐down, bottom‐up’ metaphor. By looking at the scales of politics from a social constructionist perspective the article shows that this widely‐used metaphor does not adequately capture much of the political history of region building, nor is it able to identify the relations of power involved in regionalisation in the era of expanding trans‐boundary linkages and networks across state borders. By illustrating cross‐border regionalisation with examples from Karelia and Catalonia, the article seeks to assess some of the tensions that arise between the new deterritorialised forms of trans‐regional governance and the traditional democratic practice, which is still tightly connected to areal political spaces both institutionally and in terms of the inhabitants’ collective identity. The article argues for a heightened awareness of the relational social power characteristic of network governance and potential leaks in the ‘territorial containers’ of democracy.     

Navigating the spaces of Kantian reason: Notes on cosmopolitical governance within the cross‐border Euregios of the European Union

Drawing on a burgeoning academic literature devoted to issues of institutionalised cross‐border regionalism within the European Union, the author attempts theoretically to contextualise observed cross‐border dynamics as a problematic of ‘cosmopolitical governance’, defined by an ongoing deficit of socio‐political rights and duties constitutive of forms of citizenship applicable to the uniquely transnational environments of cross‐border milieux. By exploring Kantian categories of aesthetic judgement and the forms of political community implicit in their manifestation of reason, the author posits a conceptual model of cosmopolitical right which adheres neither to the morally charged rationalities sustaining the liberal, modernist nation state nor the Hobbesian rationalities characterising interstate relations, but is critically informed by the ethical demands required in achieving agreement around claims rooted in affect and the passions. As elaborated in a case study of tranfrontier labourers within the transborder (and tri‐lingual) Euregion Maas‐Rhein, this Kantian sensus communis is meant to lead to the acknowledgement of a spatial and cultural politics capable of empowering cross‐border regional actors in negotiating a measure of agency vis‐a‐vis nation state communitarian logics.     

Estimation of the Natural Unemployment Rate in the Russian Federation, 1994–2004

To specify the problem of unemployment in Russia, we estimate the natural rate of unemployment by consecutively estimating the optimal size of the labour force and the optimal employment. For estimation of the optimal values we used a modified Hodrick–Prescott filter technique. The results show that the natural rate of unemployment in Russia during 1994–97 was stable around 13–13.5% and decreased to 7.1% by mid-2004. Moreover, before 1998 the actual unemployment was significantly lower than the natural rate and today practically equals it.     

Does the market care about investor protection practices in China?

This study develops a scorecard with which to measure the investor protection practices of major listed firms in China during 2007–2010. We use time-series data to examine the relationship between the change in firm investor protection practices and market performance. Our results show that firms exhibiting improvements in investor protection practices manifest a subsequent increase in buy-and-hold abnormal returns. The results further indicate that the changes in the sub-index have different effects on a firm’s future performance. Shareholder rights to be rewarded seem to have the most significant and positive effect on a firm’s future performance for both local and international investors. Moreover, international investors pay attention to their rights to information. Our results provide evidence in support of the notion that the market does care about firm’s investor protection practices. The findings are robust to other measures of firm performance.     

Ownership and enterprise performance in the Russian oil industry, 1992–2012

This article examines enterprise performance in Russian oil companies between 1992 and 2012. The analysis is based upon longitudinal trend output data, and distinguishes between four different types of owners – outsider private, insider private, federal state and regional state. In comparison with previous studies which considered just 1999–2004, and identified outsider private companies as the best performers, this article finds that over the longer period 1992–2012 federal state and insider private-owned companies actually performed best. The explanation for this relates to institutions and the business environment.     

Modifying Taylor reaction functions in the presence of the zero‐lower‐bound — Evidence for the ECB and the Fed

We propose an alternative way of estimating Taylor reaction functions if the zero‐lower bound on nominal interest rates is binding. This approach relies on tackling the real rather than the nominal interest rate. So if the nominal rate is (close to) zero central banks can influence the inflation expectations via quantitative easing. The unobservable inflation expectations are estimated with a state‐space model that additionally generates a time varying series for the equilibrium real interest rate and the potential output — both needed for estimations of Taylor reaction functions. We test our approach for the ECB and the Fed within the recent crisis. We add other explanatory variables to this modified Taylor reaction function and show that there are substantial differences between the estimated reaction coefficients in the pre‐ and crisis era for both central banks. While the central banks on both sides of the Atlantic act less inertially, put a smaller weight on the inflation gap, money growth and the risk spread, the response to asset price inflation becomes more pronounced during the crisis. However, the central banks diverge in their response to the output gap and credit growth.     

European integration and the legacy of the post‐world war II German expulsions in East‐Central Europe

Efforts towards the formal integration of Poland and the Czech Republic into the European Union have opened the Pandora's box of issues concerning the expulsion of Germans and the confiscation of their property after the Second World War. This paper explains why Sudeten German expellees have been at the forefront of the drive for compensation and property restitution and why Czech‐German relations have been significantly more strained after 1989. As Poland and the Czech Republic prepare to join the EU, the potential for controversy over the involvement of European‐wide institutions in lingering disputes concerning the expulsions as well as over Germans acquiring property in areas formerly part of Germany is also a focus of concern.     

Freight transportation costs and the thickening of the US–Mexico border

Border regulatory requirements and administrative practices changed subsequent to the September 11, 2001 (9/11), terrorist attacks in the United States. Research in this study examines the manners in which transportation cost data for merchandise imports from Mexico behaved before and after 2001. Evidence is obtained that confirms results earlier tabulated for imports from Canada. Empirical results further indicate that, beyond freight cost changes, growth in the value of imports from Mexico was disrupted by events associated with the aftermath of 9/11.     

Water wars? Inequalities in the Tigris‐Euphrates river basin

The water resources of the Tigris‐Euphrates basin are contested by its three primary riparians ‐ Turkey, Syria and Iraq. Rapid population growth, inefficient methods of water harvesting and massive water development plans are placing considerable strain on the existing water supply of the basin, and in order to avoid conflict, an effective water‐sharing measure is an immediate necessity. However, owing to a number of geopolitical inequalities among the riparians, Turkey has little need to cooperate, and Iraq and Syria can do little to stop this. Without Turkish cooperation, any water‐sharing arrangement in the region is doomed to fail. Therefore finding incentive for Turkey to participate in negotiations is an exceedingly difficult task, but one that must be considered if a water agreement in the Tigris‐Euphrates Basin is to become a reality.     

Trans‐state entities: Postmodern cracks in the great Westphalian dam

With the seemingly sudden end of the Cold War and the succeeding disintegration of the Soviet Union, the 1990s opened as a decade promising structural change in a geopolitical system premised on the overall stability of superpower rivalry. Yet as the decade comes to a close, challenges to the structure of global politics have grown deeper and more pervasive than could have been conceived only ten years before. Postmodernist deconstructions of the meaning and viability of states have emerged throughout the course of the decade to challenge the very viability of the Westphalian state system upon which the fundamental principles of global politics have been based. Concurrent with these philosophical developments has been the institutional emergence of quasi‐political entities, herein referred to as ‘trans‐state entities’ (TSEs), comprised of the constituent parts of neighbouring states. It is argued that TSEs manifest themselves as the result of a convergence of the increased permeability of boundaries between states and the postmodern deconstruction of states themselves as their sub‐state political units seek closer co‐operation, even policy co‐ordination, to improve their collective economic, environmental, or other situation. Three TSEs, diverse in both geographical location and in institutional manifestation yet concurrently quite similar in their means, purposes and goals, will be examined.     

Formation of the non‐state sector and privatisation in Kazakhstan and Uzbekistan

In this paper, we take a detailed look at one Polish bank's experiences with financial sector reforms focusing on a bank-led enterprise-restructuring plan that linked directly bank privatization and recapitalization to bad-debt workouts. Based on personal interviews and original statistical data, we evaluate the performance of Bank Depozytowo-Kredytowy (BDK) in promoting financial and operational restructuring of its clients. We found that BDK continued to provide soft lending to keep four old military‐industrial companies afloat and actually increased its exposure to these companies during the program. The five success stories among BDK's clients were companies that had external agents other than the bank promoting and monitoring their operational restructuring. From our case study of BDK, we conclude that, while banks may play a role in financial restructuring of their clients, their ability to affect operational restructuring is quite limited. Moreover, stateowned banks are particularly vulnerable to incentive problems when dealing with large state-owned enterprises that may be too big or too political to fail.     

Africa’s industrialization and China’s OFDI in the manufacturing sector: rationales and practices

The article examines the rationales and practices for three types of manufacturing outward foreign direct investment (OFDI) into Africa in the context of the cooperation between Africa’s industrialization and China’s OFDI on manufacturing. African economies have achieved impressive growth in the new century, but sustainable economic growth in this vast continent is still constrained by lagging industrialization and weak manufacturing sector. While China’s economy has made great achievements in Gross Domestic Product growth and poverty reduction, it witnessed hikes of factor price such as wage, land and exchange rate at varying degrees in the recent decade, imposing pressure on economic restructuring. Against the background, the new trend of Chinese manufacturing OFDI provides new opportunities for Africa to solve structural problems of weak manufacturing. Policy implications of this study on China–Africa industrial capacity cooperation are briefly discussed.     

What's in a grade? Grading policies and practices in principles of economics

This study created an experimental design with which students can empirically assess their risk behavior with respect to exam grades within an expected utility framework. Specifically, the authors analyzed students’ risk preferences associated with taking exams and earning a “risky” unknown grade versus not taking exams and instead obtaining a “sure” grade. Students have grade-choice decisions in nonhypothetical situations that impact their actual exam grades. Estimates indicate that the more risk-averse a student is, the more willing he or she is to accept a lower certain grade and not take an exam than to run the risk of actually taking it. We believe that this experimental setup and its binding results make it an easy but effective way of teaching the obtuse concept of risk aversion.     

1917–2017: The Geopolitical Legacy of the Russian Revolution

The essays collected in this forum discuss the geopolitical legacy of the Russian Revolution of 1917, one of the most momentous political events of the twentieth century. From a range of different academic disciplines and perspectives, the authors consider how the profound transformations in society and politics were refracted through space and geography, and how enduring these refractions proved to be. The authors focus on three themes that have been dominant in Russian affairs over the past century: 1)the problem of center-periphery relations, 2)the civilizational dynamics of Russia’s self-identification in relation to Europe and to Asia, and 3)the geopolitics of national identity.     

Geopolitical fantasies,national strategies and ordinary Russians in the post‐communist Era

New geopolitical writings that have developed in the post‐Soviet period are predicated on different ideological and historical perspectives and against the formal statements of Russia's place in the world from President Vladimir Putin and enshrined in the document ‘Concept of the Foreign Policy of the Russian Federation’. Four geopolitical schools can be identified, ranging from the fantastic notions of extreme Eurasianism to the reformers’ goal of tying Russia firmly to the West. Formal statements concentrate on Russia's regional prominence in Eurasia and on close integration into the world economic and political systems. However, ordinary Russians display little interest in these geopolitical writings or in the foreign policy actions of the Russian state, except in special cases where the Russian military are actively involved on Russian territory or the ‘near abroad’. In this regard, Russian public opinion has increasingly become like that of the Western democracies, generally disinterested in foreign policy and focused on their personal day‐to‐day lives.     

State limits in the early twenty‐first century: Observations on form and function

It is dangerous to draw too many conclusions about the form and function of state borders in the early twenty‐first century. Marked regional differences are developing and, with a few exceptions such as Europe, there is scarcity of empirical evidence about the changes taking place. Some trends, however, seem clear. There are likely to be more states and more land and maritime boundaries in future, and states will continue to regard the establishment and protection of their territorial limits as a priority. As the power and influence of states seem to diminish in response to globalisation, the reassertion of territoriality by governments is both legitimate and is often popular with the people. While many boundaries will become more permeable, some will remain as significant barriers to people and goods, although not to ideas and information on the Internet. Attention is drawn to the emerging political and economic blocs that may create striking regional contrasts in boundary form and function by mid‐century.