The world innovation landscape: Asia rising? Bruegel Policy Contribution 2013/02, February 2013

Highlights • Research and development spending has risen rapidly in Asia, particularly in China, which is now the world’s second R&D spender behind the United States.The increase in Korean and Chinese patent applications has been even more rapid, but Chinese patenting for exploitation on the main markets for innovation(the European Union, Japan and the US) is still marginal. • Asia's increased innovation spending is most prominently related to information and communication technologies. Overall, the Chinese and Korean economies are still not specialised in knowledge-intensive goods and services.Furthermore, China in particular is not (so far) capturing much value from its role as a manufacturer and exporter of high-tech goods; China remains mostly an assembler of goods, the value of which is created elsewhere. • It would be wrong to ignore China's innovation potential on the basis of its current performance. Its clear innovation ambitions are likely to drive its future growth. • Europe is struggling much more than the US to retain its place at the global innovation table. The EU should use Asia’s capacity building in innovation as an opportunity for value capture.

The changing landscape of financial markets in Europe, the United States and Japan. Bruegel Working Paper 2013/02, 18 March 2013

We compare the structure of the financial sectors of the EU27, Japan and the United States, looking at a set of 23 indicators. We find a large variation within the European Union in the structure of the financial sector. Using principal components analysis, we identify robust groups of EU countries. One group consists of the eastern European members that entered the EU more recently.These have substantially smaller financial sectors than the old member states. A second group can be classified as market-based (MBEU) and the third group is more bank-based (BBEU). We compare US, MBEU, BBEU, Eastern EU and Japan with the following main results. First, the groups within Europe are geographically related. Second, in many indicators, MBEU countries are closer to the (market-based) US, while BBEU countries more closely resemble Japan. Paradoxically, however, market-based EU countries also have large banking sectors. Banks in market-based countries have larger cross-border assets and liabilities, and derive a larger fraction of their income from fees, rather than interest income, than banks in bank-based countries. Finally, for most indicators, the ordering of groups of countries is quite stable over time, but while the crisis has had no impact on the relative ordering of the groups, it has slightly widened the gap between the US and all EU regions insome respects. We also find that during the crisis, substitution between market-based and bank-based sources of finance occurred in the US, and to a lesser extent in MBEU and BBEU countries.

On Political Union in Europe: The changing landscape of decisionmaking and political accountability. CEPS Essay No. 4, 21 February 2013

This essay discusses how recent developments have modified the existing allocation of tasks between the EU and national levels and the legitimising mechanisms in decision-making by the EU institutions. It examines in turn the increasing differentiation emerging in member states’ participation in EU policies and institutions, the changing configuration of executive powers and its relationship to the community method, the criteria governing the transfer of economic powers from the member states to the Union and the emerging democratic accountability and legitimising mechanisms before both the European and the national parliaments. Some main implications for the future of European institutions are summarised in the conclusions.

The Malleable Politics of Welfare-to-Work Reform: Germany's "Hartz" activation compared with Dutch, British and Irish cases. ACES Cases No. 2009.1

We compare the Hartz reforms in Germany with three other major labor market activation reforms carried out by center-left governments. Britain and Germany developed radically neoliberal “mandatory” activation policies, whereas in the Netherlands and Ireland radical activation change took a very different “enabling” form. The Irish and German cases were path deviant, the British and Dutch path dependent. We explain why Germany underwent “mandatory” and path deviant activation by focusing on two features of the policy discourse. First, the elite level discourse was “ensilaged” sealing policy formation off from dissenting actors. This is what the British and German cases had in common and the result was reform that identified long term unemployment as social delinquency rather than market failure. Second, although the German policy-making system lacked the “authoritative” features that facilitated reform in the British case, and the Irish policy-making system lacked the “reflexive” mechanisms that facilitated reform in the Dutch case, in both Germany and Ireland the wider legitimating discourses were reshaped by novel institutional vehicles (the Hartz Commission and FÁS) that served to fundamentally alter system-constitutive perceptions about policy. The findings suggest that major reform of welfare-to-work policy may be much more malleable than previously thought.

‘Bibi strikes back’. Israeli elections in a transforming domestic and international landscape. EPC Commentary, 26 March 2015

On 17 March 2015 Israeli citizens massively headed to the polls to renew the composition of the Knesset, the country’s legislative body, thereby also electing a new government after the early termination of the ruling coalition elected in 2013.