Factor Markets in General Computable Equilibrium Models. Factor Markets Working Document No. 47, May 2013

One objective of Computable general equilibrium (CGE) models is the analysis of economy-wide effects of policy measures. The focus of the Factor Markets project is to analyse the functioning of factor markets for agriculture in the EU-27, including the Candidate Countries. While agricultural and food markets are fully integrated in a European single market, subject to an EU-wide common policy, the Common Agricultural Policy (CAP), this is not the case for the agricultural factor markets capital, labour and land. There are partly serious differences with regard to member state regulations and institutions affecting land, labour and capital markets. The presentation of this heterogeneity of factor markets amongst EU Member States have been implemented in the CGE models to improve model-based analyses of the CAP and other policy measures affecting agricultural production. This final report comprises the outcome of a systematic extension and improvement of the Modular Applied GeNeral Equilibrium Tool (MAGNET) model starting from an overview of the current state of the art to represent factor markets in CGE models to a description of work on labour, land and capital in MAGNET.

The Theory of Interhybridity: Socio-political Dimensions and Migration Experiences of Post-communist Western Balkan States

The Western Balkans integration within the EU has started a legal process which is the rejection of former communist legal/political approaches and the transformation of former communist institutions. Indeed, the EU agenda has brought vertical/horizontal integration and Europeanization of national institutions (i.e. shifting power to the EU institutions and international authorities). At this point, it is very crucial to emphasize the fact that the Western Balkans as a whole region has currently an image that includes characteristics of both the Soviet socialism and the European democracy. The EU foreign policies and enlargement strategy for Western Balkans have significant effects on four core factors (i.e. Schengen visa regulations, remittances, asylum and migration as an aggregate process). The convergence/divergence of EU member states’ priorities for migration policies regulate and even shape directly the migration dynamics in migrant sender countries. From this standpoint, the research explores how main migration factors are influenced by political and judicial factors such as; rule of law and democracy score, the economic liberation score, political and human rights, civil society score and citizenship rights in Western Balkan countries. The proposal of interhybridity explores how the hybridization of state and non-state actors within home and host countries can solve labor migration-related problems. The economical and sociopolitical labor-migration model of Basu (2009) is overlapping with the multidimensional empirical framework of interhybridity. Indisputably, hybrid model (i.e. collaboration state and non-state actors) has a catalyst role in terms of balancing social problems and civil society needs. Paradigmatically, it is better to perceive the hybrid model as a combination of communicative and strategic action that means the reciprocal recognition within the model is precondition for significant functionality. This will shape social and industrial relations with moral meanings of communication.

Mixed Public-Private Enterprises in Europe: Economic Theory and an Empirical Analysis of Italian Water Utilities. Bruges European Economic Research (BEER) Papers 4/July 2006

Mixed enterprises, which are entities jointly owned by the public and private sector, are spreading all over Europe in local utilities. Well aware that in the vast majority of cases the preference of local authorities towards such governance structure is determined by practical reasons rather than by the ambition to implement new regulatory designs (an alternative to the typical “external” regulation), our purpose is to confer some scientific value to this phenomenon which has not been sufficiently investigated in the economic literature. This paper aims at proposing an economic analysis of mixed enterprises, especially of the specific configuration in which the public partner acts as controller and the private one (or “industrial” partner) as service provider. We suggest that the public service concession to mixed enterprises could embody, under certain conditions, a noteworthy substitute to the traditional public provision and the concession to totally private enterprises, as it can push regulated operators to outperform and limit the risk of private opportunism. The starting point of the entire analysis is that ownership allows the (public) owner to gather more information about the actual management of the firm, according to property rights theory. Following this stream of research, we conclude that under certain conditions mixed enterprises could significantly reduce asymmetric information between regulators and regulated firms by implementing a sort of “internal” regulation. With more information, in effect, the public authority (as owner/controller of the regulated firm, but also as member of the regulatory agency) can stimulate the private operator to be more efficient and can monitor it more effectively with respect to the fulfilment of contractual obligations (i.e., public service obligations, quality standards, etc.). Moreover, concerning the latter function, the board of directors of the mixed enterprise can be the suitable place where public and private representatives (respectively, welfare and profit maximisers) can meet to solve all disputes arising from incomplete contracts, without recourse to third parties. Finally, taking into account that a disproportionate public intervention in the “private” administration (or an ineffective protection of the general interest) would imply too many drawbacks, we draw some policy implications that make an equitable debate on the board of the firm feasible. Some empirical evidence is taken from the Italian water sector.

What drives the European Parliament? The Case of the General Data Protection Regulation. Bruges Political Research Papers 47/2015.

This paper evaluates which factors influence the European Parliament’s decision-making, based on a case study: the 2012 proposal for a General Data Protection Regulation. Following a ‘competitive testing’ approach, six different hypotheses are successively challenged in order to explain why the EP adopted a fundamental rights- oriented position. The first three factors relate to the internal organization of the EP’s work, i.e. the role played by the lead committee, by the rapporteur and by secretariat officials. The last three factors are external-related, i.e. lobbying activities, outside events and institutional considerations. Based on the empirical findings, it is argued that even though the EP’s position is due to a range of various factors, some of them prove to be more relevant than others, in particular the rapporteur and lead committee’s roles. New institutionalism theories also provide a comprehensive explanation for the EP’s willingness to achieve a fundamental rights oriented outcome.

Institutions and Growth in Europe. CEPS Working Document No. 421, April 2016

This paper provides empirical evidence in support of the view that the quality of institutions is an important determinant of long-term growth of European countries. When also taking into account the initial level of GDP per capita and government debt, cross-country institutional differences can explain to a great extent the relative long-term GDP performance of European countries. It also shows that an initial government debt level above a threshold (e.g. 60-70%) coupled with institutional quality below the EU average tends to be associated with particularly poor long-term real growth performance. Interestingly, the detrimental effect of high debt levels on long-term growth seems cushioned by the presence of very sound institutions. This might be because good institutions help to alleviate the debt problem in various ways, e.g. by ensuring sufficient fiscal consolidation in the longer-run, allowing for better use of government expenditures and promoting sustainable growth, social fairness and more efficient tax administration. The quality of national institutions seems to enhance the long-term GDP performance across a large sample of countries, also including OECD countries outside Europe. The paper offers some evidence that, in the presence of good institutions, conditions for catching-up seem generally good also for euro-area and fixed exchange rate countries. Looking at sub-groupings, it seems that sound institutions may be particularly important for long-term growth in the countries where the exchange rate tool is no longer available (and where also sovereign debt is high), and less so in the countries with flexible exchange rate regimes. However, this result is preliminary and requires further research. The empirical findings on the importance of institutions are robust to various measures of output growth, different measures of institutional indicators, different sample sizes, different country groupings and to the inclusion of additional control variables. Overall, the results tend to support the call for structural reforms in general and reforms enhancing the efficiency of public administration and regulation, the rule of law and the fight against rent-seeking and corruption in particular.