Essays on Economic Integration and Labour Demand

This dissertation consists of an introductory section and three essays investigating the effects of economic integration on labour demand by using theoretical models and by empirical analysis. The essays adopt an intra-industry trade approach to specify a theoretical framework of estimation for determining the effects of economic integration on employment. In all the essays the empirical aim is to explore the labour demand consequences of European integration. The first essay analyzes how labour-demand elasticities with own price have changed during the process of economic integration. As a theoretical result, intensified trade competition increases labour-demand elasticity, whereas better advantage of economies of scale decreases labour-demand elasticity by decreasing the elasticity of substitution between differentiated products. Furthermore, if integration gives rise to an increase in input-substitutability and/or outsourcing activities, labour demand will become more elastic. Using data from the manufacturing sector from 1975 to 2002, the empirical results provide support for the hypothesis that European integration has contributed to increased elasticities of total labour demand in Finland. The second essay analyzes how economic integration affects the impact of welfare poli-cies on employment. The essay considers the viability of financing the public sector, i.e. public consumption and social security expenses, by general labour taxation in an economy which has become more integrated into international product markets. The theoretical results of the second essay indicate that, as increased trade competition crowds out better economies of scale, it becomes more costly to maintain welfare systems financed by labour taxation. Using data from European countries for the years 1975 to 2004, the empirical results provide inconsistent evidence for the hypothesis that economic integration has contributed to the distortion effects of welfare policies on employment. The third essay analyzes the impact of profit sharing on employment as a way to introduce wage flexibility into the process of economic integration. The results of the essay suggest that, in theory, the effects of economic integration on the impact of profit sharing on employment clearly depend on a trade-off between intensified competition and better advantage of economies of scale. If product market competition increases, the ability of profit sharing to improve employment through economic integration increases with moderated wages. While, the economic integration associating with market power in turn decrease the possibilities of profit sharing with higher wages to improve employment. Using data from the manufacturing sector for the years 1996 to 2004, the empirical results show that profit-sharing has a positive impact on employment during the process of European integration, but can have ambiguous effects on the stability of employment in Finland.

How Can Sustainable Agricultural Systems Promote Food Security in a Changing Climate?

A theoretical framework of the link between climate change, rural development, sustainable agriculture, poverty, and food security is presented. Some options to respond to climate change are described. Current knowledge and potential effects on agricultural productivity is discussed. Necessary conditions for successful adaptation includes secured property rights to land, institutions that make market access possible and credit possibilities. The options of mitigation and enhanced adaptive capacity and the requirements for their implementation are discussed.

Key Factors Influencing Economic Relationships and Communication in Finnish Food Chains

The aim of this report is to discuss the role of the relationship type and communication in two Finnish food chains, namely the pig meat-to-sausage (pig meat chain) and the cereal-to-rye bread (rye chain) chains. Furthermore, the objective is to examine those factors influencing the choice of a relationship type and the sustainability of a business relationship. Altogether 1808 questionnaires were sent to producers, processors and retailers operating in these two chains of which 224 usable questionnaires were returned (the response rate being 12.4%). The great majority of the respondents (98.7%) were small businesses employing less than 50 people. Almost 70 per cent of the respondents were farmers. In both chains, formal contracts were stated to be the most important relationship type used with business partners. Although for many businesses written contracts are a common business practice, the essential role of the contracts was the security they provide regarding the demand/supply and quality issues. Relative to the choice of the relationship types, the main difference between the two chains emerged especially with the prevalence of spot markets and financial participation arrangements. The usage of spot markets was significantly more common in the rye chain when compared to the pig meat chain, while, on the other hand, financial participation arrangements were much more common among the businesses in the pig meat chain than in the rye chain. Furthermore, the analysis showed that most of the businesses in the pig meat chain claimed not to be free to choose the relationship type they use. Especially membership in a co-operative and practices of a business partner were mentioned as the reasons limiting this freedom of choice. The main business relations in both chains were described as having a long-term orientation and being based on formal written contracts. Typical for the main business relationships was also that they are not based on the existence of the key persons only; the relationship would remain even if the key people left the business. The quality of these relationships was satisfactory in both chains and across all the stakeholder groups, though the downstream processors and the retailers had a slightly more positive view on their main business partners than the farmers and the upstream processors. The businesses operating in the pig meat chain seemed also to be more dependent on their main business relations when compared to the businesses in the rye chain. Although the communication means were rather similar in both chains (the phone being the most important), there was some variation between the chains concerning the communication frequency necessary to maintain the relationship with the main business partner. In short, the businesses in the pig meat chain seemed to appreciate more frequent communication with their main business partners when compared to the businesses in the rye chain. Personal meetings with the main business partners were quite rare in both chains. All the respondent groups were, however, fairly satisfied with the communication frequency and information quality between them and the main business partner. The business cultures could be argued to be rather hegemonic among the businesses both in the pig meat and rye chains. Avoidance of uncertainty, appreciation of long-term orientation and independence were considered important factors in the business cultures. Furthermore, trust, commitment and satisfaction in business partners were thought to be essential elements of business operations in all the respondent groups. In order to investigate which factors have an effect on the choice of a relationship type, several hypotheses were tested by using binary and multinomial logit analyses. According to these analyses it could be argued that avoidance of uncertainty and risk has a certain effect on the relationship type chosen, i.e. the willingness to avoid uncertainty increases the probability to choose stable relationships, like repeated market transactions and formal written contracts, but not necessary those, which require high financial commitment (like financial participation arrangements). The probability of engaging in financial participation arrangements seemed to increase with long-term orientation. The hypotheses concerning the sustainability of the economic relations were tested by using structural equation model (SEM). In the model, five variables were found to have a positive and statistically significant impact on the sustainable economic relationship construct. Ordered relative to their importance, those factors are: (i) communication quality, (ii) personal bonds, (iii) equal power distribution, (iv) local embeddedness and (v) competition.

The Art of Adaptation : A study on the Europeanization of Finland's foreign and security policy

This study examines how Finnish foreign and security policy has been influenced by the European Union and its Common Foreign and Security Policy. It points to a growing interplay and misfit between the external expectations originating from the European level and the domestic expectations and traditional ways-of-doing-things. It is concluded that the deepening European integration in the sphere of foreign, security and defence policy has played a significant role in a number of transformations in the Finnish policies since 1995. New, more European, meanings have been attached to the key concepts of Finnish foreign and security policy. Neutrality and traditional peacekeeping have been replaced by a minimalist reading of military non-alignment and participation in crisis management operations and EU battle groups. Traditional small state identity has been recast more and more as small member stateness . At the same time Finland has entered an era of post-consensus in national foreign and security policy. A key theoretical argument in the background of the study is that collective understandings attached to European policies, when not resonating well with domestic understandings, cause adaptation pressures on domestic-level processes and may lead to changes in the way interests and identities are constructed. This means that Europeanization is principally seen as identity reconstruction. Consequently, the theoretical framework of the study builds on the Europeanization research literature and constructivist IR theory on state identity. Foreign and security policy is defined as the practice in which state identity is reproduced, and the key foreign and security policy concepts are seen as the vehicles of identity production. It is concluded that for Finland, participation in the EU s foreign, security and defence policies represents not only a tool for responding to the changes in the international security environment but also a new means of self-identification. Concerning the Finnish attempts of projecting national interests on the European security policy agenda, it is concluded that they mainly relate to the compatibility of the potential development of EU s defence dimension with the Finnish military non-alignment. Although neutrality was cast aside in the official security policy when Finland joined the EU, the analysis shows that its impact has continued in the domestic political debate and in the mind-set of the decision-makers. The primary research material includes official Finnish foreign and security policy documentation and the related parliamentary debates from 1994 to 2007. This study serves also as a comprehensive empirical overview on Finland s reactions and contributions to the EU Common Foreign and Security Policy.

Impact of agricultural market liberalization on food security in developing countries : a comparative study of Kenya and Zambia

This research investigates the impacts of agricultural market liberalization on food security in developing countries and it evaluates the supply perspective of food security. This research theme is applied on the agricultural sector in Kenya and in Zambia by studying the role policies played in the maize sub-sector. An evaluation of selected policies introduced at the beginning of the 1980s is made, as well as an assessment of whether those policies influenced maize output. A theoretical model of agricultural production is then formulated to reflect cereal production in a developing country setting. This study begins with a review of the general framework and the aims of the structural adjustment programs and proceeds to their application in the maize sector in Kenya and Zambia. A literature review of the supply and demand synthesis of food security is presented with examples from various developing countries. Contrary to previous studies on food security, this study assesses two countries with divergent economic orientations. Agricultural sector response to economic and institutional policies in different settings is also evaluated. Finally, a dynamic time series econometric model is applied to assess the effects of policy on maize output. The empirical findings suggest a weak policy influence on maize output, but the precipitation and acreage variables stand out as core determinants of maize output. The policy dimension of acreage and how markets influence it is not discussed at length in this study. Due to weak land rights and tenure structures in these countries, the direct impact of policy change on land markets cannot be precisely measured. Recurring government intervention during the structural policy implementation period impeded efficient functioning of input and output markets, particularly in Zambia. Input and output prices of maize and fertilizer responded more strongly in Kenya than in Zambia, where the state often ceded to public pressure by revoking pertinent policy measures. These policy interpretations are based on the response of policy variables which are more responsive in Kenya than in Zambia. According the obtained regression results, agricultural markets in general, and the maize sub-sector in particular, responded more positively to implemented policies in Kenya, than in Zambia, which supported a more socialist economic system. It is observed in these results that in order for policies to be effective, sector and regional dimensions need to be considered. The regional and sector dimensions were not taken into account in the formulation and implementation of structural adjustment policies in the 1980s. It can be noted that countries with vibrant economic structures and institutions fared better than those which had a firm, socially founded system.

Paradox between democracy and security- case study on Pakistan

Pro gradu-tutkielma tutkii demokratian ja turvallisuuden paradoksia Pakistanissa esitellen kuusi tekijää, jotka vaikuttavat kyseiseen paradoksiin. Näitä tekijöitä ovat historiallinen kehitys; eliittihallinto; taloudellinen kehitys; Pakistanin poliittisten tekijöiden demokratian eri määritelmät; opetuksen puuttuminen; ja valtataistelu hallituksen, armeijan, tiedustelupalvelun, oikeusjärjestelmän, poliittisten puolueiden sekä eri heimojen, uskonnollisten ja etnisten ryhmien välillä. Tutkimus tarkastelee myös sitä miten nämä tekijät vaikuttavat demokratian kehitykseen Pakistanissa. Keskeinen argumentti on, että länsimainen demokratia ei esiinny eikä toimi Pakistanissa vallitsevissa oloissa, etenkin historiallisen kehityksen ja ulkoisen turvallisuuden takia. Pro gradu-tutkielma käyttää sekundäärisiä lähteitä, kuten kirjoja, artikkeleita, maaraportteja, kommentaareja sekä omiin kokemuksiin perustuvia havaintoja Pakistanin matkalta 2010-2011. Keskeiset teoriat gradussa ovat Guillermo O’ Donnelin delegaattidemokratia sekä Duncan McCargon eliittihallintoteoria, jotka yhdessä selittävät historiallista kehitystä ja eliittihallinnon dynamiikkaa, mitkä johtavat paradoksiin. Kautta historian armeija on hallinnut Pakistania, ja siviilihallinto on ainoastaan neljä kertaa onnistunut olemaan vallassa, mutta silloinkin siviilihallinto päättyi korruptioväitteisiin tai armeijan vallankaappaukseen. Armeijahallinnoille on luonteenomaista hyvät suhteet USA:n, positiivinen taloudellinen kehitys ja vakaus, kun taas siviilihallinnot ovat epävakaita ja korruptoituneita. Tämä kehitys on paradoksin tausta, joka rakentuu turvallisuuspoliittisen tilanteen pohjalle eli hallitusten ja muiden tekijöiden yritykseen löytää vastapaino Intian uhalle. Tämä on ollut keskeinen huoli kelle tahansa poliittiselle päättäjälle itsenäisyydestä lähtien. Loputon valtataistelu eri poliittisten tekijöiden kesken sekä eliittihallinto pitävät yllä paradoksia, koska eliitit ovat kiinnostuneempia oman valtansa säilyttämisestä kuin kansan tahdon huomioonottamisesta. Koska valtaosa ihmisistä ei ole koulutettuja, he ovat paljolti kiinnostuneita omasta selviytymisestään, ja tämän takia sekä kansa että eliitit suosivat armeijahallintoa, koska se tuo vakautta ja taloudellista kehitystä. Sen vuoksi vallitsevissa oloissa demokratian tulevaisuus Pakistanissa näyttää huonolta, koska liberaalidemokratian vaatimukset eivät täyty puoliksi vapaan oikeussysteemin, puoliksi vapaan lehdistön, valtavan korruption ja monien ihmisoikeusloukkauksien takia unohtamatta armeijan ja tiedustelupalvelun sekaantumista siviilihallintoon.

Nuori konservatiivi : Tuure Junnila ja hänen poliittinen toimintansa vuoteen 1956

Tuure Junnila, PhD (1910-1999) was one of Finland's most renowned conservative politicians of the post-war period. Junnila is remembered primarily as a persistent opponent of Urho Kekkonen, a long-term Member of Parliament, a conspicuous opposition member and a prolific political writer. Junnila's ideologies and political views were conservative, and he is one of the most outstanding figures in the history of the National Coalition Party. Junnila also made an extensive career outside of politics, first as an economist and then as an executive of Finland's leading commercial bank Kansallis-Osake-Pankki. The Young Conservative is a partial biography written using traditional historical research methods, which examines Junnila's personal history and his activity in public life up to 1956. The study begins by investigating Junnila's background through his childhood, school years, university studies and early professional career. It also looks at Junnila's work as an economist and practical banker. Particular attention is paid to Junnila's political work, constantly focusing on the following five often overlapping areas: (1) economic policy, (2) domestic policy, (3) foreign and security policy, (4) Junnila and Urho Kekkonen, (5) Junnila, the Coalition Party and Finnish conservatism. In his economic policy, Junnila emphasised the importance of economic stability, opposed socialisation and the growth of public expenditure, defended the free market system and private entrepreneurship, and demanded tax cuts. This policy was very popular within the Coalition Party during the early 1950s, making Junnila the leading conservative economic politician of the time. In terms of domestic policy, Junnila demanded as early as the 1940s that a "third force" should be established in Finland to counterbalance the agrarian and labour parties by uniting conservative and liberal ideologies under the same roof. Foreign and security policy is the area of Junnila's political activity which is most clearly situated after the mid-1950s. However, Junnila's early speeches and writings already show a striving towards the unconditional neutrality modelled by Switzerland and Sweden and a strong emphasis on Finland's right to internal self-determination. Junnila, as did the Coalition Party as a whole, adopted a consistently critical approach towards Urho Kekkonen between 1951 and 1956, but this attitude was not as bluntly negative and all-round antagonistic as many previous studies have implied. Junnila was one of the leading Finnish conservatives of the early 1950s and in all essence his views were analogous to the general alignment of the Coalition Party at the time: conservative in ideology and general policy, and liberal in economic policy.

Aineellista ja aineetonta turvaa : Ruokakunnat, ekologis-taloudelliset resurssit ja kontaktinmuodostus Valkealassa 1630 1750

Material and immaterial security. Households, ecological and economic resources and formation of contacts in Valkeala parish from the 1630s to the 1750s. The geographical area of the thesis, Valkeala parish in the region of Kymenlaakso, is a very interesting area owing to its diversity, both in terms of natural setting and economic and cultural structure. The study begins by outlining the ecological and economic features of Valkeala and by analysing household structures. The main focus of the research lies in the contacts of the households with the outside world. The following types of contacts are chosen as indicators of the interaction: trade and credit relations, guarantees, co-operation, marriages and godparentage. The main theme of the contact analysis is to observe the significance of three factors, namely geographical extent, affluence level and kinship, to the formation of contacts. It is also essential to chart the interdependencies between ecological and economic resources, changes in the structure of households and the formation of contacts during the period studied. The time between the 1630s and the 1750s was characterized by wars, crop losses and population changes, which had an effect on the economic framework and on the structural variation of households and contact fields. In the 17th and 18th centuries Valkeala could be divided, economically, into two sections according to the predominant cultivation technique. The western area formed the field area and the eastern and northern villages the swidden area. Multiple family households were dominant in the latter part of the 17th century, and for most of the study period, the majority of people lived in the more complex households rather than in simple families. Economic resources had only a moderate impact on the structure of contacts. There was a clear connection between bigger household size and the extent and intensity of contacts. The jurisdictional boundary that ran across Valkeala from the northwest to the southeast and divided the parish into two areas influenced the formation of contacts more than the parish boundaries. Support and security were offered largely by the primary contacts with one s immediate family, neighbours and friends. Economic support was channelled from the wealthier to the less well off by credits. Cross-marriages, cross-godparentage and marital networks could be seen as manifestations of an aim towards stability and the joining of resources. It was essential for households both to secure the workforce needed for a minimum level of subsistence and to ensure the continuation of the family line. These goals could best be reached by complex households that could adapt to the prevailing circumstances and also had wider and more multi-layered contacts offering material and immaterial security.

Is prosopis a curse or a blessing? : An ecological economic analysis of an invasive alien tree species in Sudan.

The issue of the usefulness of different prosopis species versus their status as weeds is a matter of hot debate around the world. The tree Prosopis juliflora had until 2000 been proclaimed weedy in its native range in South America and elsewhere in the dry tropics. P. juliflora or mesquite has a 90-year history in Sudan. During the early 1990s a popular opinion in central Sudan and the Sudanese Government had begun to consider prosopis a noxious weed and a problematic tree species due to its aggressive ability to invade farmlands and pastures, especially in and around irrigated agricultural lands. As a consequence prosopis was officially declared an invasive alien species also in Sudan, and in 1995 a presidential decree for its eradication was issued. Using a total economic valuation (TEV) approach, this study analysed the impacts of prosopis on the local livelihoods in two contrasting irrigated agricultural schemes. Primarily a problem-based approach was used in which the derivation of non-market values was captured using ecological economic tools. In the New Halfa Irrigation Scheme in Kassala State, four separate household surveys were conducted due to diversity between the respective population groups. The main aim was here to study the magnitude of environmental economic benefits and costs derived from the invasion of prosopis in a large agricultural irrigation scheme on clay soil. Another study site, the Gandato Irrigation Scheme in River Nile State represented impacts from prosopis that an irrigation scheme was confronted with on sandy soil in the arid and semi-arid ecozones along the main River Nile. The two cases showed distinctly different effects of prosopis but both indicated the benefits to exceed the costs. The valuation on clay soil in New Halfa identified a benefit/cost ratio of 2.1, while this indicator equalled 46 on the sandy soils of Gandato. The valuation results were site-specific and based on local market prices. The most important beneficial impacts of prosopis on local livelihoods were derived from free-grazing forage for livestock, environmental conservation of the native vegetation, wood and non-wood forest products, as well as shelterbelt effects. The main social costs from prosopis were derived from weeding and clearing it from farm lands and from canalsides, from thorn injuries to humans and livestock, as well as from repair expenses vehicle tyre punctures. Of the population groups, the tenants faced most of the detrimental impacts, while the landless population groups (originating from western and eastern Sudan) as well as the nomads were highly dependent on this tree resource. For the Gandato site the monetized benefit-cost ratio of 46 still excluded several additional beneficial impacts of prosopis in the area that were difficult to quantify and monetize credibly. In River Nile State the beneficial impact could thus be seen as completely outweighing the costs of prosopis. The results can contributed to the formulation of national and local forest and agricultural policies related to prosopis in Sudan and also be used in other countries faced with similar impacts caused by this tree.

Halvennettu työ : Pätkätyö ja sukupuoli sopimusyhteiskuntaa edeltävissä työmarkkinakäytännöissä

Unvalued Work. Gender and fragmented labour before national collective bargaining Systematically irregular work creates economic and social insecurity. A novelty? To think that globalisation results in unprecedented labour conditions turns out to be questionable when the idea is put in perspective. In the light of history there is nothing new in the frequency of today s short-term employment, for instance, ranking genders in labour relations in an old custom. Unvalued Work (Halvennettu työ) examines the regulation and management of labour before the time of collective bargaining. In the study present trends engage in a dialogue with empirical findings from the past. Preventing trade unions to take the initiative has been and remains an employer interest. The analysis focuses on female employment in the 1920s and 1930s. The inferences challenge to ask on what conditions the history of Finnish labour relations warrants on the whole speaking of contractual security, stable earnings and regular waged work that provides livelihood. Success in selling one s labour is not synonymous with good employment that yields decent income. Juxtaposing labour relations between the world wars and the 21st century helps us to understand the currently transforming labour market. Present policies are informed by past choices and patterns of thought. Unvalued Work (Halvennettu työ) offers instruments for making sense of today s labour relations.