The Digital Market for Local Services: A one-night stand for workers? An example from the on-demand economy. CEPS Special Report, No. 133/April 2016

This case study provides a snapshot of the dynamics in the digital market for locally provided personal services. Based on a case study for a Belgium platform with 14,113 identified workers and 9,459 posted tasks, the findings suggest that the current intermediation is inefficient. Only a limited share of the tasks posted on the platform are being completed, whereas the characteristics of the not-completed tasks are fairly limited. Moreover, just a small share of the workers participating in the platform is actually performing the completed tasks. Their average earnings per hour are in most cases above the minimum wage and even above the median wage in the offline market. At the present time, however, the limited earnings for individual workers prevent this mode of working from becoming an alternative to a conventional job. In addition to the standard determinants of workers’ earnings (e.g. gender, age, occupation, etc.), the characteristics and evaluation mechanism of the platform have a large influence on the distribution of tasks and earnings.

Electricity without borders: a plan to make the internal market work. Bruegel Blueprint Series 20, 5 September 2013

The most straightforward European single energy market design would entail a European system operator regulated by a single European regulator. This would ensure the predictable development of rules for the entire EU, significantly reducing regulatory uncertainty for electricity sector investments. But such a first-best market design is unlikely to be politically realistic in the European context for three reasons. First, the necessary changes compared to the current situation are substantial and would produce significant redistributive effects. Second, a European solution would deprive member states of the ability to manage their energy systems nationally. And third, a single European solution might fall short of being well-tailored to consumers’ preferences, which differ substantially across the EU. To nevertheless reap significant benefits from an integrated European electricity market, we propose the following blueprint: First, we suggest adding a European system-management layer to complement national operation centres and help them to better exchange information about the status of the system, expected changes and planned modifications. The ultimate aim should be to transfer the day-to-day responsibility for the safe and economic operation of the system to the European control centre. To further increase efficiency, electricity prices should be allowed to differ between all network points between and within countries. This would enable throughput of electricity through national and international lines to be safely increased without any major investments in infrastructure. Second, to ensure the consistency of national network plans and to ensure that they contribute to providing the infrastructure for a functioning single market, the role of the European ten year network development plan (TYNDP) needs to be upgraded by obliging national regulators to only approve projects planned at European level unless they can prove that deviations are beneficial. This boosted role of the TYNDP would need to be underpinned by resolving the issues of conflicting interests and information asymmetry. Therefore, the network planning process should be opened to all affected stakeholders (generators, network owners and operators, consumers, residents and others) and enable the European Agency for the Cooperation of Energy Regulators (ACER) to act as a welfare-maximising referee. An ultimate political decision by the European Parliament on the entire plan will open a negotiation process around selecting alternatives and agreeing compensation. This ensures that all stakeholders have an interest in guaranteeing a certain degree of balance of interest in the earlier stages. In fact, transparent planning, early stakeholder involvement and democratic legitimisation are well suited for minimising as much as possible local opposition to new lines. Third, sharing the cost of network investments in Europe is a critical issue. One reason is that so far even the most sophisticated models have been unable to identify the individual long-term net benefit in an uncertain environment. A workable compromise to finance new network investments would consist of three components: (i) all easily attributable cost should be levied on the responsible party; (ii) all network users that sit at nodes that are expected to receive more imports through a line extension should be obliged to pay a share of the line extension cost through their network charges; (iii) the rest of the cost is socialised to all consumers. Such a cost-distribution scheme will involve some intra-European redistribution from the well-developed countries (infrastructure-wise) to those that are catching up. However, such a scheme would perform this redistribution in a much more efficient way than the Connecting Europe Facility’s ad-hoc disbursements to politically chosen projects, because it would provide the infrastructure that is really needed.

A Global Analysis of of Imperfect Competition in the Banking Systems and the Latest Israeli Regulation Dealing with Market Failures. ACES Working Paper No. 3, 2007

The high concentration of the banking sector is a cross-border phenomenon that has high impact on local and global economies. This paper's main goal is to analyze the factors that impact concentration in the banking systems around the globe. The innovation of this paper is that we combined economic, "economic environment", and culture variables as explanatory variables for this analysis. We found among other things that regulation in the banking system is helpful in order to keep it competitive. We also found that when the society has more individual values rather than collective ones, its banking sector is less concentrated. In the second part of the paper we focused on the Israeli case, showing that although recent indicators of the Israeli banking system indicate a higher level of concentration and lower level of competition, it seems that the recent trend is moving toward less concentration and higher competition.

The debt, the stock market and the state-owned enterprises. The sources of chaos on the Chinese financial markets. OSW Commentary NUMBER 201/16.03.2016

The government’s extensive programme for stimulating the economy has enabled China to maintain high economic growth after the global financial crisis in 2008. However, this success has come at the price of a number of negative economic phenomena and the consequences they have had are the major challenge for the government today. The vast programme of investments in infrastructure, construction and fixed assets, which has been the main source of economic growth over the past few years, has caused a rapid increase in China’s debt from 158% of GDP in 2007 to 282% in 2014. Along with the local governments in charge of implementing the programme, the Chinese sector of state-owned enterprises (SOEs) has been heavily burdened by the stimulation policy. The sector’s profitability has fallen, its indebtedness has increased and management problems have been revealed.

The Impact of the Collaborative Economy on the Labour Market. CEPS Special Report No. 138, June 2016

The digitalisation of work is creating new ways of intermediating work, with for example platforms intermediating work between individuals online. These so-called online collaborative platforms have the potential to fundamentally change the labour market, but for the moment, with an estimated 100,000 active workers or 0.05% of total employees in the EU, they do not seem to have a large impact on the offline/traditional labour market or the create/destroy impetus. This paper analyses the direct and indirect impact of the collaborative economy on the labour market. The findings, based on a collection of empirical studies, suggest that most workers do not earn their main income through online platforms and they obtain earnings from different types of platforms. Earnings from physical/local services are, in general, substantially higher than virtual services that can potentially be delivered globally. The paper also assesses the conditions, number of hours worked and employment status, compared to the offline labour market, and finds shows large differences across types of workers, platforms, and countries. The emergence of online collaborative platforms poses some challenges and opportunities for policy-makers. On the one hand, they may be challenged to ensure minimum remuneration, fair evaluation, tax declaration and social protection, and reduction of the administrative burden. On the other hand, the new technologies may provide opportunities to (partially) liberate some professional services and activate specific groups at a distance away from the labour market. This paper was commissioned by the European Commission as input into its European Agenda for the Collaborative Economy. This Ag