The Law of the WTO and the Communications Law of the EC : On a Path of Harmony or Discord?

This paper presents an overview of the law of the World Trade Organization (WTO) relevant to telecommunications services and correlates this body of law with the current regulatory framework for electronic communications networks and services in the European Community. The latter has been adapted to meet the challenges of technological and market developments in communications, epitomized by the processes of digitization, enhanced transport networks and convergence. The novel solutions embodied in the EC electronic communications regime, notably, a new design of the Significant Market Power mechanism, a projected withdrawal of sector specific regulation and an affirmation of the principle of technological neutrality, pose interesting questions as to the conformity of this reformed EC communications law with the WTO rules on telecommunications services and the obligations of the European Communities and their Member States. Looking beyond the WTO legal compatibility test, essential questions regarding the need for evolution of the WTO telecommunications rules are raised. The present paper contributes to the ongoing debate in that context in light of the EC experience.

A Transatlantic Trade and Investment Partnership Agreement: Implications for Swiss Agriculture

To say that regionalism is gaining momentum has become an understatement. To mourn the lack of progress in multilateral trade rule-making is a commonplace in the discourse of politicians regretting the WTO negotiation standstill, and of “know-what-to-do” academics. The real problem is the uneven level-playing field resulting from increasing differences of rules and obligations. The Transatlantic Trade and Investment Partnership Agreement (TTIP) is a very ambitious project. WTI studies in 2014 have shown that the implications for Switzerland could be enormous. But even the combined market power of the two TTIP participants – the EU and the USA – will not level the playing field impairing the regulatory framework, and the market access barriers for trade in agriculture. Such differences will remain in three areas which, incidentally, are also vital for a global response to the food security challenge to feed 9 billion people before the year 2050: market access, non-tariff barriers, and trade-distorting domestic support programmes. This means that without multilateral progress the TTIP and other so-called mega-regionals, if successfully concluded, will exacerbate rather than lessen trade distortions. While this makes farmers in rich countries safer from competition, competitive production in all countries will be hampered. Consequently, and notwithstanding the many affirmations to the contrary, farm policies worldwide will continue to only address farmer security without increasing global food security. What are the implications of the TTIP for Swiss agriculture? This article, commissioned by Waseda University in Tokyo, finds that the failure to achieve further reforms – including a number of areas where earlier reforms have been reversed – is presenting Switzerland and Swiss agriculture with a terrible dilemma in the eventuality of a successful conclusion of the TTIP. If Swiss farm production is to survive for more than another generation, continuous reform efforts are required, and over-reliance on the traditional instruments of border protection and product support is to be avoided. Without a substantial TTIP obliging Switzerland to follow suit, autonomous reforms will remain extremely fragile.

Monopsony Power, Pay Structure and Training

Although interest in monopsonistic influences on labor market outcomes has revived in recent years, only a few empirical studies provide direct evidence on this topic. In this article, the authors analyze the effect of monopsony power on pay structure, using a direct measure of labor market thinness. The authors find evidence of monopsony power, as firms facing fewer local competitors offer lower wages to skilled labor and trainees, but not to unskilled labor. The findings have important implications for the economic theory of training, as most recent models assume monopsonistic pay-setting for skilled labor, but not for trainees.

The EU’s Choice of Regulatory Venues for Trade Negotiations: A Tale of Agency Power?

This article focuses on the EU’s strategy for choosing regulatory venues to negotiate trade agreements. It analyses the existence of a clear venue hierarchy since the late 1990s and the recent change leading to a blurring of any clear preference for using bilateral, inter-regional or multilateral settings. The article challenges domestic explanations of the EU’s choice of venue, stressing the autonomy of the Commission as a major factor. Using a principal-agent framework, it shows that the Commission’s agenda-setting powers, the existence of interest divergence among principals (e.g. Member States, business groups) and the multi-level system facilitate agency.

The Integration of Electricity from Renewable Energy Sources in the European Union Electricity Market – The case for “Smart Grids”

The power sector is to play a central role in a low carbon economy. In all the decarbonisation scenarios of the European Union renewable energy sources (RES) will be a crucial part of the solution. Current grids constitute however major bottlenecks for the future expansion of RES. Recognising the need for a modernisation of its grids, the European Union has called for the creation of a "smart supergrid" interconnecting European grids at the continental level and making them "intelligent" through the addition of information and communication technology (ICT). To implement its agenda the EU has taken a leading role in coordinating research efforts and creating a common legislative framework for the necessary modernisation of Europe’s grids. This paper intends to give both an overview and a critical appraisal of the measures taken so far by the European Union to "transform" the grids into the backbone of a decarbonised electricity system. It suggests that if competition is to play a significant role in the deployment of smart grids, the current regulatory paradigm will have to be fundamentally reassessed

Three Shades of Embeddedness, State Capitalism as the Informal Economy, Emic Notions of the Anti-Market, and Counterfeit Garments in the Mauritian Export Processing Zone

Purpose This paper furthers the analysis of patterns regulating capitalist accumulation based on a historical anthropology of economic activities revolving around and within the Mauritian Export Processing Zone (EPZ). Design/methodology/approach This paper uses fieldwork in Mauritius to interrogate and critique two important concepts in contemporary social theory – “embeddedness” and “the informal economy.” These are viewed in the wider frame of social anthropology’s engagement with (neoliberal) capitalism. Findings A process-oriented revision of Polanyi’s work on embeddedness and the “double movement” is proposed to help us situate EPZs within ongoing power struggles found throughout the history of capitalism. This helps us to challenge the notion of economic informality as supplied by Hart and others. Social implications Scholars and policymakers have tended to see economic informality as a force from below, able to disrupt the legal-rational nature of capitalism as practiced from on high. Similarly, there is a view that a precapitalist embeddedness, a “human economy,” has many good things to offer. However, this paper shows that the practices of the state and multinational capitalism, in EPZs and elsewhere, exactly match the practices that are envisioned as the cure to the pitfalls of capitalism. Value of the paper Setting aside the formal-informal distinction in favor of a process-oriented analysis of embeddedness allows us better to understand the shifting struggles among the state, capital, and labor.

Bargaining for power and information : an experimental and theoretical analysis of the interaction between institutions, externalities and adverse selection

Bargaining is the building block of many economic interactions, ranging from bilateral to multilateral encounters and from situations in which the actors are individuals to negotiations between firms or countries. In all these settings, economists have been intrigued for a long time by the fact that some projects, trades or agreements are not realized even though they are mutually beneficial. On the one hand, this has been explained by incomplete information. A firm may not be willing to offer a wage that is acceptable to a qualified worker, because it knows that there are also unqualified workers and cannot distinguish between the two types. This phenomenon is known as adverse selection. On the other hand, it has been argued that even with complete information, the presence of externalities may impede efficient outcomes. To see this, consider the example of climate change. If a subset of countries agrees to curb emissions, non-participant regions benefit from the signatories’ efforts without incurring costs. These free riding opportunities give rise to incentives to strategically improve ones bargaining power that work against the formation of a global agreement. This thesis is concerned with extending our understanding of both factors, adverse selection and externalities. The findings are based on empirical evidence from original laboratory experiments as well as game theoretic modeling. On a very general note, it is demonstrated that the institutions through which agents interact matter to a large extent. Insights are provided about which institutions we should expect to perform better than others, at least in terms of aggregate welfare. Chapters 1 and 2 focus on the problem of adverse selection. Effective operation of markets and other institutions often depends on good information transmission properties. In terms of the example introduced above, a firm is only willing to offer high wages if it receives enough positive signals about the worker’s quality during the application and wage bargaining process. In Chapter 1, it will be shown that repeated interaction coupled with time costs facilitates information transmission. By making the wage bargaining process costly for the worker, the firm is able to obtain more accurate information about the worker’s type. The cost could be pure time cost from delaying agreement or cost of effort arising from a multi-step interviewing process. In Chapter 2, I abstract from time cost and show that communication can play a similar role. The simple fact that a worker states to be of high quality may be informative. In Chapter 3, the focus is on a different source of inefficiency. Agents strive for bargaining power and thus may be motivated by incentives that are at odds with the socially efficient outcome. I have already mentioned the example of climate change. Other examples are coalitions within committees that are formed to secure voting power to block outcomes or groups that commit to different technological standards although a single standard would be optimal (e.g. the format war between HD and BlueRay). It will be shown that such inefficiencies are directly linked to the presence of externalities and a certain degree of irreversibility in actions. I now discuss the three articles in more detail. In Chapter 1, Olivier Bochet and I study a simple bilateral bargaining institution that eliminates trade failures arising from incomplete information. In this setting, a buyer makes offers to a seller in order to acquire a good. Whenever an offer is rejected by the seller, the buyer may submit a further offer. Bargaining is costly, because both parties suffer a (small) time cost after any rejection. The difficulties arise, because the good can be of low or high quality and the quality of the good is only known to the seller. Indeed, without the possibility to make repeated offers, it is too risky for the buyer to offer prices that allow for trade of high quality goods. When allowing for repeated offers, however, at equilibrium both types of goods trade with probability one. We provide an experimental test of these predictions. Buyers gather information about sellers using specific price offers and rates of trade are high, much as the model’s qualitative predictions. We also observe a persistent over-delay before trade occurs, and this mitigates efficiency substantially. Possible channels for over-delay are identified in the form of two behavioral assumptions missing from the standard model, loss aversion (buyers) and haggling (sellers), which reconcile the data with the theoretical predictions. Chapter 2 also studies adverse selection, but interaction between buyers and sellers now takes place within a market rather than isolated pairs. Remarkably, in a market it suffices to let agents communicate in a very simple manner to mitigate trade failures. The key insight is that better informed agents (sellers) are willing to truthfully reveal their private information, because by doing so they are able to reduce search frictions and attract more buyers. Behavior observed in the experimental sessions closely follows the theoretical predictions. As a consequence, costless and non-binding communication (cheap talk) significantly raises rates of trade and welfare. Previous experiments have documented that cheap talk alleviates inefficiencies due to asymmetric information. These findings are explained by pro-social preferences and lie aversion. I use appropriate control treatments to show that such consideration play only a minor role in our market. Instead, the experiment highlights the ability to organize markets as a new channel through which communication can facilitate trade in the presence of private information. In Chapter 3, I theoretically explore coalition formation via multilateral bargaining under complete information. The environment studied is extremely rich in the sense that the model allows for all kinds of externalities. This is achieved by using so-called partition functions, which pin down a coalitional worth for each possible coalition in each possible coalition structure. It is found that although binding agreements can be written, efficiency is not guaranteed, because the negotiation process is inherently non-cooperative. The prospects of cooperation are shown to crucially depend on i) the degree to which players can renegotiate and gradually build up agreements and ii) the absence of a certain type of externalities that can loosely be described as incentives to free ride. Moreover, the willingness to concede bargaining power is identified as a novel reason for gradualism. Another key contribution of the study is that it identifies a strong connection between the Core, one of the most important concepts in cooperative game theory, and the set of environments for which efficiency is attained even without renegotiation.

The Bulgarian educational system and gender segregation in the labour market

School-to-work transitions are embedded in the institutional structures of educational systems. In particular, vocational education has been linked to greater horizontal gender segregation in employment. Similarly, research on higher education has uncovered how stratification at the tertiary level can promote gender segregation in the labour market. This paper investigates how gender typical employment is conditioned by the institutional features of the educational system in Bulgaria. Despite the post-socialist transformations of Bulgaria's educational system and its labour market, horizontal gender segregation has remained rather moderate from an international perspective. We use data from a 2012 nationally representative survey. We find that the educational system shapes the gendered occupational trajectories for men but it does not hold the same explanatory power for women. Neither vocational nor higher education has a significant effect for women. In contrast, men with vocational education are more likely to work in male-typed occupations and, in line with the literature, higher education steers men toward gender mixed and a-typical occupations. Our study points to the importance of educational institutional factors in shaping gender (a)-typical career paths. The Bulgarian case, in particular, offers insights into the mechanisms that can potentially decrease horizontal gender segregation in the labour market.