Life Is Getting Worse in ESS Data: Is This Due to Micro or Macro Factors? Bruges European Economic Research (BEER) Papers 28/November 2013

In order to evaluate the success of a society, measuring well-being might be a fruitful avenue. For a long time, governments have trusted economic measures, Gross Domestic Product (GDP) in particular, to assess their success. However GDP is only a limited measure of economic success, which is not enough to show whether policies implemented by governments have a positive perceived impact on the people they represent. This paper belongs to the studies of the relationship between measures of well-being and economic factors. More precisely, it tries to evaluate the decrease in happiness and life satisfaction that can be observed in European countries in the 2000-2010 decade. It asks whether this deterioration is mainly due to microeconomic factors, such as income and individual characteristics, or rather to environmental (macroeconomics) factors such as unemployment, inflation or income inequality. Such aggregate factors could impact individual happiness per se because they are related to the perception of an aggregate risk of unemployment or income fall. In order to strengthen this interpretation, this paper checks whether the type of social protection regime existing in different countries mediates the impact of macroeconomic volatility on individual well-being. To go further, adopting the classification of welfare regimes proposed by Esping-Andersen (1990), it verifies whether the decreasing pattern of subjective well-being varies across these regimes. This is partly due to the aggregate social protection expenditure. Hence, this paper brings some additional evidence to the idea that macroeconomic uncertainty has a cost in terms of well-being. More protective social regimes are able to reduce this cost. It also proposes an evaluation of the welfare cost of unemployment and inflation (in terms of happiness and life satisfaction), in each of the different social protection regimes. Finally different measures of well-being, i.e. cognitive, hedonic and eudaimonic, are used to confirm the above mentioned result.

THE KYOTO PROTOCOL AND THE WTO: INSTITUTIONAL EVOLUTION AND ADAPTATION. CEPS Policy Brief No. 28/December

Overview. Questions about the interface between the multilateral climate regime embodied in the Kyoto Protocol and the multilateral trade regime embodied in the World Trade Organisation (WTO) have become especially timely since the fall of 2001. At that time, ministerial-level meetings in Marrakech and Doha agreed to advance the agendas, respectively, for the implementation of the Kyoto Protocol and for negotiations on further agreements at the WTO. There have been concerns that each of these multilateral arrangements could constrain the effectiveness of the other, and these concerns will become more salient with the entry into force of the Kyoto Protocol. There are questions about whether and how the rights and obligations of the members of the WTO and the parties to the Protocol may conflict. Of particular concern is whether provisions in the Protocol, as well as government policies and business activities undertaken in keeping with those provisions, may conflict with the WTO non-discrimination principles of national treatment and most-favoured nation treatment. The WTO agreements that are potentially relevant to climate change issues include many of the individual Uruguay Round agreements and subsequent agreements as well. The principal elements of the Kyoto Protocol that are particularly relevant are its provisions concerning emissions trading, the Clean Development Mechanism, Joint Implementation, enforcement, and parties’ policies and measures. In combination, therefore, there are numerous potential points of intersection between the elements of the Kyoto Protocol and the WTO agreements. Previous studies have clarified many issues, as they have focused on particular aspects of the regimes’ relationships. Yet, some analyses suggest that the two regimes are largely compatible and even mutually reinforcing, while others suggest that there are significant conflicts between them. Those and other studies are referenced in the ‘suggestions for further reading’ section at the end of the paper.1 The present paper seeks to expand on those studies by providing additional breadth and depth to understanding of the issues. The analysis gives special attention to key issues on the agenda – i.e. issues that are particularly problematic because of the likelihood of occurrence of specific conflicts and the significance of their economic and/or political consequences. The paper adopts a modified ‘triage’ approach, which classifies points of intersection as (a) highly problematic and clearly in need of further attention, (b) perhaps problematic but less urgent, and (c) apparently not problematic, at least at this point in time. The principal conclusions are that: · The missions and objectives of the two regimes are largely compatible, and their operations are potentially mutually reinforcing in several respects. · Some provisions of the multilateral agreements that may superficially seem at odds are not likely to become particularly problematic in practice. · ‘Domestic policies and measures’ that governments may undertake in the context of the Protocol could pose difficult issues in the context of WTO dispute cases. · Recent WTO agreements and dispute cases acknowledge the legitimacy of the ‘precautionary principle’ and are thus consistent with the environmental protection objectives of the Protocol. · The relative newness of the climate regime creates opportunities for institutional adaptation, as compared with the constraints of tradition in the trade-investment regime. · The prospect of largely independent evolutionary paths for the two regimes poses a series of issues about future international regime design and management, which may require new institutional arrangements. In sum, the present paper thus finds that although there are some areas of interaction that are problematic, the two regimes may nevertheless co-exist in relative harmony in other respects –more like ‘neighbours’ than either ‘friends’ or ‘foes’, as Krist (2001) has suggested.