The politics of Europe 2002: flexibility and adjustment

The European Union entered a new phase of integration in 2002. The single currency, the European Convention, and enlargement signalled progress. The conflict over the Stability and Growth Pact, the tensions between the member states, and the political turmoil in a number of core countries suggested retreat. This paper examines the resulting pattern of integration. It argues that the European Union is becoming more legalistic than leader‐oriented, and that it rests on common principles rather than accepting the imposition of some grand design. Such a European Union cannot challenge the United States for global leadership. But it is likely to prove stable nonetheless.     

The politics of Europe 2004: solidarity and integration

The process of European integration has reached the limits of European solidarity—both within the member states and between them. Increasingly, Europeans are demonstrating reluctance to accept common rules, to recognise common values, to protect common interests, or to promote common objectives. Instead, Europeans appear to be expressing many different and yet interrelated forms of disaffection. Voter abstention is high, security cooperation is weak, economic confidence is low, and support for either European enlargement or institutional reform is vanishing. To respond to this crisis, European politicians need to manage expectations better, they need to accept responsibility for public policy problems, they need to explain the limits of what Europe can do, and they need to search for new formulas to meet different national challenges with common European institutions.     

The politics of Europe 2003: differences and disagreements

The European Union (EU) was supposed to make a great leap forward in 2003. In many ways, it did. The European Convention presented its draft constitutional treaty. The 10 candidate countries signed and ratified their treaties of accession, and the EU and the North Atlantic Treaty Organisation (NATO) agreed to share institutional resources. However, the year was marked more by division than by achievement. A series of crises over Iraq, the Stability and Growth Pact and the intergovernmental conference together shook confidence in the future of Europe. This essay examines what the implications of these crises are for Europe’s future. It argues that they represent important disagreements––but not lasting differences––between the member states. The politics of Europe remains on track at the intergovernmental level. If there are problems in Europe’s future, they are more likely to arise between elites and voters than between the member states.     

The politics of Europe 1999: spring cleaning

The European Union (EU) finished off the twentieth century with more action than vision. A large number of issues were raised—often with surprising energy and enthusiasm—and yet we are no closer to understanding the nature of Europe’s future at the start of the new millennium than we were at the end of the last. Indeed, the temptation is to write off the year 1999 as a period of great expectations and modest accomplishments. Early rhetoric about the impact of EMU on world financial markets, about Europe’s progress toward resolving the jobs crisis, about efforts to tackle corruption, and about the inevitability of enlargement seem hyperbolic to say the least. The prolonged depreciation of the euro‐dollar exchange rate, the allegations linking François Mitterrand and Helmut Kohl in illegal campaign financing, the smoldering violence in Kosovo, the persistence of European unemployment, and the resounding electoral achievements of the right‐wing Austrian Freedom Party, all conspire to suggest that Europe is defined more by the shadow of the past than by any vision of the future. The argument in this essay is that such an assessment would be in error. Europe may not have come close to achieving any of the grand objectives suggested by the flurry of activity in 1999. However, by placing too much emphasis on the work that remains we risk discounting unnecessarily the achievements that have been made. The politics of 1999 was more a ‘spring cleaning’ than a pivotal moment in European affairs. As with any spring cleaning, what is important is to focus on is what was discarded and what was retained. Such reordering of the past often involves uncomfortable confrontations. It usually also sets the stage for more constructive activity in the future. Thus where 1999 offered more action than vision, perhaps more time can be devoted to vision than action in the years to come. This argument is made in four sections. Three of these provide a functional overview of developments during the course of the year. The first section deals with institutional matters, specifically as these relate to the Commission and the Parliament. The second turns to economic issues, and focuses on economic and monetary union (EMU) and employment. The third examines the area of foreign affairs, and draws attention to the development of a European security identity and the acceleration of enlargement. Building on this overview, the fourth section provides an assessment of what has been achieved and what remains to be accomplished.     

The persistence of social pacts in Europe

This article argues that, despite pessimistic forecasts for their future, social pacts remain a central element of industrial relations across many member states of the European Union. Social pacts provide a mechanism of pragmatic adaptation to the trilemma of reconciling market integration, intergovernmentalism and democratic accountability. In addition, recent developments in the general direction of social dialogue and social pacts, in some of the new member states, indicate a learning process to enable economic catch‐up while engaging in institutional innovation. Finally, the article argues that social pacts remain important in ensuring a voice for labour across Europe.     

The politics and economics of decentralization

This paper analyzes a simple general equilibrium model with local public goods subject to exclusion and crowding. In general, no competitive equilibrium exists for such models. However, in this paper we study a four-person example, satisfying assumptions formulated in a paper by McGuire [Group segregation and optimal jurisdictions, J. Political Econ.82, 112–132 (1974)], in which a competitive equilibrium does exist. This example demonstrates that the model is capable of generating realistic implications regarding stratification of jurisdictions, the decision to subdivide or consolidate jurisdictions, reliance on exclusionary zoning, and the use of revenue sharing.     

The interpenetration of politics and planning

This paper argues that judgement on the wider claims of systems planning should be suspended until a fuller evaluation has been completed. As part of this evaluation, it is argued that the relation between the activities of politics and of planning will remain ambivalent so long as the two concepts retain their elastic definitions. In this context this paper examines the British literature on systems planning and concludes that conflicts generated in the formulation of goals cannot be imploded, from the political arena into planning and resolved there through the application of deductive logic. It is argued that goal formulation needs to be reconceived as an activity where the deductive logic of systems planning and the interactive logic of politics interpenetrate and permeate each other. It is argued that neither is it desirable that deductive logic should dominate political activity, nor is it feasible that the interactive logic of politics should dominate the activity of planning.Interpenetration may be seen in the activity of representation, where although the represented are capable of acting, their representatives act for them (not instead of them) in other arenas. It is argued that ultimately, though politics is a logically prior activity and though planning is instrumental, they need to be conceived as interdependent but semi-autonomous activities, linked by the process of formulating desirable goals which are also feasible.     

The persistence of economic profit

Recently, as practitioners and researchers from developed countries have increasingly probed the activities of emerging economies, what exactly drives the long-term economic profitability of firms in China has become the most salient issue in the above fields. However, a study dedicated to the persistence analysis of profitability differentials among firms in China has not yet been proposed. This study thus employs China’s business database to examine the persistence in the incremental components of the industry and firm effects on economic profitability and tests the hypotheses that conform to the conventional wisdom of relative rates of persistence. A persistence partitioning model is fitted to a new data set, and the results show that the incremental effects of industry on economic profitability persist longer than the incremental effects of the firm. In other words, the long-term competitive advantages of firms in China are more predictable and sustainable based on industry influences compared to firm factors. These findings support the predictions of industrial organization economics, and provide some implications for corporate strategy.     

Science and politics: The 1981 and 1984 LIHEAP distribution formulas

The Low-Income Home Energy Assistance Program (LIHEAP) is a federal block grant program to help low-income households pay their heating and cooling bills. If the regular fiscal year LIHEAP appropriation is less than or equal to $1.975 billion, then a 1981 formula is applied to distribute funding across states, while if appropriations rise above the $1.975 billion threshold, a 1984 formula is applied in conjunction with two hold-harmless provisions. In 18 of the past 20 years, the 1981 formula has served as the default mechanism to distribute LIHEAP funding. The purpose of this paper is to call attention to the inadequacy of the 1981 formula and to explain why the objectives of LIHEAP are not met when this formula is used. We explain why the distribution of LIHEAP funds is not proportionate to the need for assistance and offer some suggestions for improvement. The 1981 formula is shown to be the outcome of a convoluted political process heavily biased in favor of cold-climate states, with cold-climate states receiving on-the-order of at least $150 million a year in allotment dollars beyond their “fair share” of heating requirements. The 1981 and 1984 distribution formulas are derived and a critical examination of each formula is presented. The 1984 formula is shown to be an ideal mechanism to distribute LIHEAP funds, based on a scientific and rational understanding of low-income energy needs, but legislative constraints prevent its application.     

The UK and EMU: Lessons from Europe

Her Majesty's Treasury is due to report in June 2003 on the economic case for the UK adopting the Euro. One criterion concerns the extent of economic convergence between the UK and the European Union countries. Differences in financial, credit and housing institutions between countries present one important subset of constraints to sustained convergence (Maclennan et al, 1998) - largely neglected in the economic literature on common currency areas. These types of differences create tension within the Eurozone. Empirical evidence supporting these concerns has emerged in signs of overheating in the Netherlands, UK and some of the fringe economies, and in the relative stagnation of Germany and Italy. The UK's buoyancy, however, is accompanied by serious economic imbalances, with consequent risks of instability. These would be exacerbated should the UK be prematurely locked into an exchange rate and interest rate regime unresponsive to domestic conditions. There is much to learn from European experience: from Germany and Italy, on the consequences of illiberal economic structures; from The Netherlands, on some of the risks of liberal credit markets; and from Denmark, with a liberal credit market but rational property taxation. In this paper, John Muellbauer argues that convergence does not have to be fully achieved, if there is a counterbalancing policy instrument to mitigate some of the effects of these slow-to-dissipate differences. Specifically in the UK, a reformed system of property taxation would contribute greatly to long-term stability and the preservation of economic balance.     

Innovation and HRM: Absences and politics

This article analyses the role of HRM practices in the implementation of an innovative cross-functional approach to new product development (concurrent engineering, CE) in Eurotech Industries. Contrary to CE methodology stipulations, and despite supportive conditions, HRM received scant attention in the implementation process. Organizational power and politics were clearly involved in this situation, and this article explores how their play created such HRM ‘absences’. The article builds on a four-dimensional view of power in order to provide a deeper understanding of the embedded, interdependent and political nature of HRM practice and innovation.     

The greening of British politics?

The spectacular success of the British Greens in winning 15% of the vote in the 1989 elections for the European parliament contrasts starkly with their previous failures. The turnaround in their fortunes is attributable in part to increasing awareness of environmental issues, both domestic and global, but especially to changes in the state of party competition: the collapse of the Liberal and Social Democratic Alliance, the unpopularity and negative campaign of the Conservative party, and the Labour party's abandonment of unilateral nuclear disarmament, all exacerbated by low turnout in an election for a parliament few Britons knew or cared much about. It is likely, however, that in a general election more usual conditions of political competition will obtain and that, because of the disciplines of the British electroal system, the Greens' success of 1989 will not be repeated in national elections.     

The corrupt politics of chemical weapons

The Organisation for the Prohibition of Chemical Weapons (OPCW) is a significant component of the global governance structure and considered a gold standard international body with 193 member states and scientific divisions expected to adhere rigorously to objectivity and political neutrality. However, OPCW's reputation has recently been tarnished. Dissenting scientists from within the organization have raised serious questions about the integrity of an OPCW fact-finding mission (FFM) investigating the alleged chemical attack in Douma, Syria on April 7, 2018. The OPCW FFMs are tainted in three ways: (1) they rely upon information provided via intermediaries connected to states that are belligerents in the war in Syria; (2) the organizational structure of an FFM excludes scientific and verification divisions of the OPCW; and (3) control of FFMs is held by a bureaucratic office staffed by career diplomats who are from states involved with the Syrian war. Furthermore, officials involved with the Douma FFM investigation report the following anomalies: (a) an original interim report was secretly altered in order to make an unsubstantiated suggestion that an alleged attack had occurred; (b) A U.S. delegation was allowed to brief the FFM, an action prohibited by the Chemical Weapons Convention; and (c) formal attempts by the inspectors to obtain transparency and dialog was rejected by the OPCW. Meanwhile, the United States and its allies have dismissed questions as Russian “disinformation” or as a “conspiracy theory.” Overall, analysis of the alleged Douma attack and the OPCW's FFM supports the thesis that key international organizations have been effectively captured, or at the very least heavily influenced, by particular states that assume their own impartiality. This shortcoming poses a risk to international peace and security.     

The persistence of economic sentiment: a trip down memory lane

Journal of Economic Interaction and Coordination - Although various indicators of economic sentiment are often assessed in macroeconomic studies, the generating process of economic sentiment itself...     

Forecast persistence and clustering: Additional evidence

This study intends to address the persistence of the bias in analysts’ earnings forecasts and clustering effects of time, industry classification, and stock exchange listing. Following Kwag and Shrieves (2006), I use a look-back portfolio formation method that captures salient features of analysts’ past forecasting behavior and form quintile portfolios that describe the range of analysts’ forecasting behavior. Consistent with Kwag and Shrieves, empirical evidence suggests that analyst optimism and pessimism tend to persist. Time, industry classification, and stock exchange listing do not seem to influence such phenomenon. (JEL G14, G19)     

The hot house and the politics of production: Piecework Bargaining in retrospect

Brown's studies of piecework bargaining are reviewed in light of later research and changing conditions. Some extensions are needed, for example, in relation to the definition of custom and practice. And some neglected themes, notably the role of gender in workplace bargaining, need attention. But the analytical framework is essentially robust. Its theoretical pay‐off is elaborated, and arguments that industrial relations lacks an adequate theory of pay are disputed. Its current relevance is illustrated in relation to the explosion of pay at the top of the earnings distribution.     

The future of Europe - and Britain's economic future in Europe: the perspective of a Europe-based multinational

The paper asks why Europe matters, what a company like Unilever wants from Europe, what developments will deliver these conditions and whether it matters if Britain is in or out of Europe. It concludes that the most important benefit from Europe has been the Single Market. Developments which promote it such as EMU should be supported but other economic issues such as competitiveness and unemployment also need to be addressed. The benefits of the Single Market can most easily be secured inside Europe.