Migration and Integration. Common Challenges and Responses from Europe and Asia

With the signing of the ASEAN Framework Agreement for the Integration of Priority Sectors (FA) in 2004, migration and integration issues gained significance on the agenda. Primarily concerned with increasing economic growth, this framework excludes the integration of low and unskilled migrant workers; instead, ASEAN efforts to address migration and integration issues have been limited to Mutual Recognition Agreements for skilled labour and professionals. After an analysis of migration policy in the region, we highlight specific barriers to the integration of labour migrants in two priority sectors – nursing, which is highly regulated by the state, and Information, Communications and Technology (ICT), which is typically selfregulated and privately run. Despite a MRA for nursing allowing registered nurses to practice in another ASEAN country under supervision of local nurses without registering with the host country’s nursing regulatory authority, in practice, there are major barriers to the free movement of nurses within ASEAN in terms of skills recognition, licensure requirements and other protectionist measures. Although regulations governing the inflow of ICT professionals are not as stringent as those for healthcare professionals, private costs associated with job search and gaining foreign employment are higher in the ICT sector, largely due to limited information on international mobility within the industry. Three sets of barriers to greater integration are discussed. First, the economic and political diversity within ASEAN makes integration more problematic than in the European Union. Second, the primary concern with value-adding economic growth means that regional agreements are focused on skilled and professional labour migration only. Third, the “ASEAN way” of doing things – via a strong emphasis on consensus and non-interference with domestic policies – often means that the FA provision for the free movement of labour is usually trumped by domestic policies that do not reflect the same desire for labour integration.

The Economics of Subsidies for R&D: The Intrinsic Difficulty of Determining Optimum Subsidies and Implications for Reform of EU State Aid Rules on R&D. Bruges European Economic Research (BEER) Papers 26/February 2013

The European Commission is reforming state aid rules. An important element of the reform is to prevent the granting of excessive subsidies. This paper shows that the determination of the optimum subsidy for research is difficult. What appears to be the socially optimum level of research effort depends on the benchmark of comparison and whether this benchmark is the situation before subsidies or the situation after subsidies. In the presence of asymmetric information, policy makers should induce firms to reveal their true costs and should grant subsidies to the relatively more efficient firms by allocating subsidies not on a first-come-first- serve basis but through a competitive process. However, competitive selection of subsidy recipients is not a panacea as it may not be possible to be effectively used in all cases and for all research programmes. This is because in principle public subsidies should support those programmes with the largest value for society, rather than with the lowest costs. Although this paper focuses on R&D, its findings are relevant to any subsidy whose aim is to remedy market failure caused by positive externalities.