EMPLOYMENT PROTECTION LEGISLATION AND THE GROWTH OF THE SERVICE SECTOR IN THE EUROPEAN UNION

In modern developed economies it is the service sector that generates jobs. In Anglo-Saxon economies, where employment protection legislation is low and unions comparatively weak, services account for three-quarters of income and four-fifths of jobs. Yet in France, Germany and Italy, where the reverse is true, the service sector accounts for much less of the economy in terms of income and jobs. This article shows that employment protection legislation – defended by trade unions still dominating manufacturing in continental Europe – results in higher unemployment rates and also negatively affects the growth of services.     

THE EUROPEAN UNION AND ECONOMIC DECLINE: WHY WE NEED ANOTHER LUDWIG ERHARD

In the context of the election of a woman Chancellor of Germany, it is often suggested that Angela Merkel could prove to be 'Germany's Thatcher'. But the example of the sort of leadership that is required in Germany comes not from the UK but from Germany itself. Germany needs another Ludwig Erhard. His message that free and open markets allow outsiders to come into the market economy and prosper, and his claim that markets did not need to be made 'social' because they are inherently 'social', should be understood and applied by politicians throughout the EU – including in the UK.     

FEDERATION WITH MAJORITY DECISIONS: ECONOMIC LESSONS FROM THE HISTORY OF THE UNITE D STATES, GERMANY AND THE EUROPEAN UNION

This article examines the potential impact of qualified majority voting on decision-making within the EU. It draws on the experience of US federalism, Germany under Bismarck and the UK in the European Union. In each case, it is shown that geographical majorities (nations, states or regions) have used majority decision-making as a means of increasing their rivals' costs. It is argued that to prevent such behaviour in the future in the EU, the proposed Constitutional Treaty should raise, not lower, the decision-making quorum.     

DEVELOPING A CONSTITUTION FOR A LIBERAL EUROPEAN UNION

In many ways the EU Reform Treaty represents an advance over the status quo: it streamlines decision-making and makes institutions more accountable. However, the Treaty ignores opportunities for important institutional reforms and is unlikely to provide strong constraints on institutional power or halt centralisation.     

AN ECONOMICALLY LIBERAL EUROPEAN UNION WILL NOT BE DELIVERED BY THE EU REFORM TREATY

There is little doubt that the EU's Reform Treaty is a very substantial document with significant implications for business and the economy. Unfortunately, there is little in the Treaty that would appear to promote liberal economic policies. On the contrary, there are at least two developments that should cause concern. The first is the Charter of Fundamental Rights which will probably have significant, anti-liberal, implications for Britain's labour market laws. And the second is the removal of 'free and undistorted competition' from the list of the EU's objectives in the main body of the Treaty.     

THE EUROPEAN COURT: THE FORGOTTEN POWERHOUSE BUILDING THE EUROPEAN SUPERSTATE

Less attention is paid to the European Court of Justice than to other European Union institutions when discussing the centralising tendencies of the Union. However, the court has given an important impetus to the process of centralisation through its individual decisions and also through its tendency to give effect in its decisions to what it believes to be the'purpose'of EU treaties rather than to the text of the treaties. The proposed EU constitution will significantly widen the power of the European Court since it includes articles which are wide open to a number of different interpretations, and it will be for the court to decide how they should be interpreted.     

PHILANTHROPY AND ENTERPRISE IN THE BRITISH CREDIT UNION MOVEMENT

Through the 1990s hundreds of credit unions were established to serve indebted communities throughout Britain. These volunteer-run financial co-operatives did not meet growth expectations because of restrictive legislation, inadequate development models and well-intentioned but unproductive state intervention. British credit unions are more successful when they develop as market-oriented social enterprises able to build effective partnerships with banks, government and the private sector to serve low-income communities.     

THE CONSTITUTIONAL PROPOSAL OF THE EUROPEAN CONVENTION: AN APPRAISAL AND EXPLANATION

The recent European Convention was constructed so that the median voter on the convention had a bias in favour of centralisation. The conclusions of the Convention were therefore not surprising. The European Constitutional Group has made a number of suggestions for change to the Convention that could reverse its centralising approach.     

LIFE-CYCLE ANALYSIS AND POLICY OPTIONS: THE CASE OF THE EUROPEAN PULP AND PAPER INDUSTRY

As part of the shift in emphasis in environmental policy from clean-up to avoidance, environmental policy instruments that specify preferred technological directions for an industry are increasingly being used. Take-back requirements and mandatory recycling are cases in point. These directly affect the mix of materials and the technologies used by an industry. These effects reverberate throughout the industry and influence market conditions for everyone both up- and downstream in the supplier/client chains. As these chains frequently cross international frontiers, environmental policy-making is becoming increasingly significant in influencing competitive structures and international trade patterns. Concerns are that policy-making may lock in inappropriate technologies and that the policy process may be manipulated for industrial or trading advantage. Using fibre recycling in the European pulp and paper sector as a case study, it is shown how these concerns are manifest and also that materials accounting and operational research techniques exist to mitigate them. It is concluded that there is a need to establish agreed environmental impact evaluation methodologies to provide guidance on the robustness of policy-making and a basis for consistent, predictable and defensible policy-making.     

THE POLITICS AND COMPLEXITY OF TRADE UNION RESPONSES TO NEW MANAGEMENT PRACTICES

Miguel Martinez Lucio and Syd Weston, who are Lecturers in Human Resource Management at the Cardiff Business School, emphasise that, in seeking to understand trade union responses to HRM and new management practices, it is important to take into account their traditions and internal decision-making processes as well as external influences. They suggest, in particular, that it is possible to identify three main ‘clusters’ of opinion which have emerged in recent years and which go to make up the complex position of the TUC. They go on to argue that, as unions learn more about HRM and new management practices, they will tend to exert a more significant influence on the form and implementation of such initiatives.     

INSIDERS AND OUTSIDERS IN UNION MODELS

Abstract. This paper examines the importance of distinguishing between 'insiders'and 'outsiders'in models of union-firm bargaining. In general, insiders are those workers already established in the firm, while outsiders are either unemployed or working in temporary, low-security jobs. Modifying traditional union models to take account of this distinction is straightforward in one-period models, where the union is assumed to be indifferent to the welfare of outsiders, but is much more complicated in dynamic models. Some of the predictions of insider-outsider models concerning wage rigidity and unemployment are not robust. However, the prediction that wages will depend on both insider and outsider forces is robust and appears to be supported by the empirical evidence. Furthermore, evidence from the U.S. suggests that insider power should not be viewed as a purely union phenomenon.     

UNIVERSITY RESEARCH, INTELLECTUAL PROPERTY RIGHTS AND EUROPEAN INNOVATION SYSTEMS

Abstract This paper surveys the literature on university patenting. From the point of view of the economic theory of patents, it is argued that patenting knowledge developed by university researchers is paradoxical: patents are normally intended to stimulate knowledge development by providing property rights, but universities operate also under a different incentive scheme, i.e. they receive public funds to perform socially useful knowledge. In the debate surrounding the so‐called Bayh‐Dole Act in the USA, it has, however, been argued that patents on university inventions may be necessary to stimulate technology transfer from universities to private firms. The first part of the paper addresses two major questions. First, what is the economic logic of Bayh‐Dole, and, second, what were the effects on universities and the knowledge they develop? In the second part, the paper addresses the issue of whether ‘Bayh‐Dole‐like’ legislation would be beneficial for European countries. In a number of European countries, a suggestion has been made that this could enhance knowledge transfer from the public to the private sector. Using a new database resulting from a survey among patent inventors in six European countries, an assessment is given of the degree of university patenting in Europe. Because university researchers are often involved in patented inventions without the university being listed as a patent applicant, statistics based on the patent office databases alone often underestimate university patenting in Europe. The paper ends with a discussion of how this ‘European practice’ of university patenting affects public–private knowledge transfer in Europe, and how this compares to the effects of the Bayh‐Dole Act in the USA.     

THE BENEFITS AND COSTS OF MONETARY UNION IN SOUTHERN AFRICA: A CRITICAL SURVEY OF THE LITERATURE

Abstract.  With the 14 members of the Southern African Development Community (SADC) having set the objective of adopting a common currency for the year 2018, an expanding empirical literature has emerged evaluating the benefits and costs of a common-currency area in Southern Africa. This paper reviews that literature, focusing on two categories of studies: (1) those that assume that a country's characteristics are invariant to the adoption of a common currency and (2) those that assume that a monetary union alters an economy's structure, resulting in trade creation and credibility gains. The literature reviewed suggests that a relatively small group of countries, typically including South Africa, satisfies the criteria necessary for monetary unification. The literature also suggests that, in a monetary union comprising all SADC countries and a regional central bank that sets monetary policy to reflect the average economic conditions (e.g. fiscal balances) in the region, the potential losses (i.e. higher inflation) from giving up an existing credible national central bank, a relevant consideration for South Africa, could outweigh any potential benefits of trade creation resulting from a common currency.