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.

Energy Signaling in the Regulation of Gene Expression during Stress

Maintenance of homeostasis is pivotal to all forms of life. In the case of plants, homeostasis is constantly threatened by the inability to escape environmental fluctuations, and therefore sensitive mechanisms must have evolved to allow rapid perception of environmental cues and concomitant modification of growth and developmental patterns for adaptation and survival. Re-establishment of homeostasis in response to environmental perturbations requires reprogramming of metabolism and gene expression to shunt energy sources from growth-related biosynthetic processes to defense, acclimation, and, ultimately, adaptation. Failure to mount an initial 'emergency' response may result in nutrient deprivation and irreversible senescence and cell death. Early signaling events largely determine the capacity of plants to orchestrate a successful adaptive response. Early events, on the other hand, are likely to be shared by different conditions through the generation of similar signals and before more specific responses are elaborated. Recent studies lend credence to this hypothesis, underpinning the importance of a shared energy signal in the transcriptional response to various types of stress. Energy deficiency is associated with most environmental perturbations due to their direct or indirect deleterious impact on photosynthesis and/or respiration. Several systems are known to have evolved for monitoring the available resources and triggering metabolic, growth, and developmental decisions accordingly. In doing so, energy-sensing systems regulate gene expression at multiple levels to allow flexibility in the diversity and the kinetics of the stress response.

Concerted involvement of Cdx/Hox genes and Wnt signaling in morphogenesis of the caudal neural tube and cloacal derivatives from the posterior growth zone

Decrease in Cdx dosage in an allelic series of mouse Cdx mutants leads to progressively more severe posterior vertebral defects. These defects are corrected by posterior gain of function of the Wnt effector Lef1. Precocious expression of Hox paralogous 13 genes also induces vertebral axis truncation by antagonizing Cdx function. We report here that the phenotypic similarity also applies to patterning of the caudal neural tube and uro-rectal tracts in Cdx and Wnt3a mutants, and in embryos precociously expressing Hox13 genes. Cdx2 inactivation after placentation leads to posterior defects, including incomplete uro-rectal septation. Compound mutants carrying one active Cdx2 allele in the Cdx4-null background (Cdx2/4), transgenic embryos precociously expressing Hox13 genes and a novel Wnt3a hypomorph mutant all manifest a comparable phenotype with similar uro-rectal defects. Phenotype and transcriptome analysis in early Cdx mutants, genetic rescue experiments and gene expression studies lead us to propose that Cdx transcription factors act via Wnt signaling during the laying down of uro-rectal mesoderm, and that they are operative in an early phase of these events, at the site of tissue progenitors in the posterior growth zone of the embryo. Cdx and Wnt mutations and premature Hox13 expression also cause similar neural dysmorphology, including ectopic neural structures that sometimes lead to neural tube splitting at caudal axial levels. These findings involve the Cdx genes, canonical Wnt signaling and the temporal control of posterior Hox gene expression in posterior morphogenesis in the different embryonic germ layers. They shed a new light on the etiology of the caudal dysplasia or caudal regression range of human congenital defects.

Opposing RA and FGF signals control proximodistal vertebrate limb development through regulation of Meis genes.

Vertebrate limbs develop in a temporal proximodistal sequence, with proximal regions specified and generated earlier than distal ones. Whereas considerable information is available on the mechanisms promoting limb growth, those involved in determining the proximodistal identity of limb parts remain largely unknown. We show here that retinoic acid (RA) is an upstream activator of the proximal determinant genes Meis1 and Meis2. RA promotes proximalization of limb cells and endogenous RA signaling is required to maintain the proximal Meis domain in the limb. RA synthesis and signaling range, which initially span the entire lateral plate mesoderm, become restricted to proximal limb domains by the apical ectodermal ridge (AER) activity following limb initiation. We identify fibroblast growth factor (FGF) as the main molecule responsible for this AER activity and propose a model integrating the role of FGF in limb cell proliferation, with a specific function in promoting distalization through inhibition of RA production and signaling.

Growth, convergence and trade: The services sector in India’s states

India’s success story in services is well documented at the national level, but similar literature does not exist for India’s states. In this paper, we bridge this gap in research by looking at India’s services growth at the sub-national level and in doing so, also challenge existing literature by arguing that this growth has positive implications for income distribution. We find that even as per capita income is not converging across India’s states, per capita services are; evidence is provided both in terms of traditional measures of sigma- and beta-convergence and more recent panel unit root tests. A more disaggregated analysis of services sectors reveals convergence in railways, public administration and financial services. Finally, a Jensen & Kletzer (2005) approach to determining tradability provides evidence of most services being “traded” across India’s states, suggesting the role of such trade in the services growth and convergence story.

Should energy efficiency be traded off for other product attributes? : an analysis of air-conditioner regulation in Japan

This paper examines the functioning of energy efficiency standards and labeling policies for air conditioners in Japan. The results of our empirical analysis suggest that consumers respond more to label information, which benchmarks the energy efficiency performance of each product to a pre-specified target, than to direct performance measures. This finding provides justification for the setting, and regular updating, of target standards as well as their use in calculating relative performance measures. We also find, through graphical analysis, that air conditioner manufacturers face a tradeoff between energy efficiency and product compactness when they develop their products. This tradeoff, combined with the semi-regular upward revision of minimum energy efficiency standards, has led to the growth in indoor unit size of air conditioners in recent years. In the face of this phenomenon, regulatory rules were revised so that manufacturers could adhere to less stringent standards if the indoor unit size of their product remains below a certain size. Our demand estimates provide no evidence that larger indoor unit size causes disutility to consumers. It is therefore possible that the regulatory change was not warranted from a consumer welfare point of view.

Growth, survival, gene expression, microbiota and tryptic activity during feeding of Scophthalmus maximus first feeding larvae with beta-glucan (MacroGard)

Reflecting the natural biology of mass spawning fish aquaculture production of fish larvae is often hampered by high and unpredictable mortality rates. The present study aimed to enhance larval performance and immunity via the oral administration of an immunomodulator, beta-glucan (MacroGard®) in turbot (Scophthalmus maximus). Rotifers (Brachionus plicatilis) were incubated with or without yeast beta-1,3/1,6-glucan in form of MacroGard® at a concentration of 0.5 g/L. Rotifers were fed to first feeding turbot larvae once a day. From day 13 dph onwards all tanks were additionally fed untreated Artemia sp. nauplii (1 nauplius ml/L). Daily mortality was monitored and larvae were sampled at 11 and 24 dph for expression of 30 genes, trypsin activity and size measurements. Along with the feeding of beta-glucan daily mortality was significantly reduced by ca. 15% and an alteration of the larval microbiota was observed. At 11 dph gene expression of trypsin and chymotrypsin was elevated in the MacroGard® fed fish, which resulted in heightened tryptic enzyme activity. No effect on genes encoding antioxidative proteins was observed, whilst the immune response was clearly modulated by beta-glucan. At 11 dph complement component c3 was elevated whilst cytokines, antimicrobial peptides, toll like receptor 3 and heat shock protein 70 were not affected. At the later time point (24 dph) an anti-inflammatory effect in form of a down-regulation of hsp 70, tnf-alpha and il-1beta was observed. We conclude that the administration of beta-glucan induced an immunomodulatory response and could be used as an effective measure to increase survival in rearing of turbot.

(Table 2) Rate of reduction in cell size (apical length) and growth rate for seven Fragilariopsis kerguelensis strains sampled during POLARSTERN cruise ANT-XXI/3

The planktonic diatom Fragilariopsis kerguelensis plays an important role in the biogeochemical cycles of the Southern Ocean, where remains of its frustules form the largest deposit of biogenic silica anywhere in the world. We assessed the genetic identity of 26 strains, from cells collected at various sites in the Southern Ocean, using three molecular markers, LSU and ITS rDNA and rbcL. The LSU sequences were identical among the tested strains, ITS sequences were highly similar, and only one base pair difference was detected among the rbcL sequences. These results, together with a large number of successful mating experiments demonstrated that the strains belong to a single biological species. We investigated the mating system and life cycle traits of F. kerguelensis. Cell size diminished gradually in clonal strains. Gamete formation only occurred when strains of opposite mating type - within a cell size range of 7-36 µm - were mixed together. Two binucleate gametes were formed in each gametangium and gamete conjugation produced a zygote that had four nuclei and was surrounded by thin siliceous scales. Two out of the four nuclei subsequently degenerated and the zygote expanded to form an auxospore surrounded by a transverse and a longitudinal perizonium. Staining with the fluorochrome PDMPO provided for the first time a clear demonstration that the longitudinal perizonium is formed after auxospore expansion is complete. Initial cells produced within the mature auxospores were 78-101 µm in length. Various authors have shown that the average valve size of F. kerguelensis varies in sediment samples collected in regions and seasons with different primary production regimes and this parameter has thus been proposed as a biological proxy for palaeo-productivity. A better understanding of the life cycle of F. kerguelensis should help the design of future investigations aimed at testing the link between cell size distribution in the natural environment and the role that environmental factors might have in the regulation of population cell size.

The regulation of size as illustrated in unicellular organisms,

Bibliography: p. 209-230.

Growth hormone, insulin-like growth factor I and cell proliferation in the mouse blastocyst

The role of growth hormone (GH) in embryonic growth is controversial, yet preimplantation embryos express GH, insulin-like growth factor I (IGF-I) and their receptors. In this study, addition of bovine GH doubled the proportion of two-cell embryos forming blastocysts and increased by about 25% the number of cells in those blastocysts with a concentration-response curve showing maximal activity at 1 pg bovine GH ml(-1), with decreasing activity at higher and lower concentrations. GH increased the number of cells in the trophectoderm by 25%, but did not affect the inner cell mass of blastocysts. Inhibition of cell proliferation by anti-GH antiserum indicated that GH is a potent autocrine or paracrine regulator of the number of trophectoderm cells in vivo. Type 1 IGF receptors (IGF1R) were localized to cytoplasmic vesicles and plasma membrane in the apical domains of uncompacted and compacted eight-cell embryos, but were predominantly apparent in cytoplasmic vesicles of the trophectoderm cells of the blastocyst, similar to GH receptors. Studies using alphaIR3 antiserum which blocks ligand activation of IGF1R, showed that IGF1R participate in the autocrine or paracrine regulation of the number of cells in the inner cell mass by an endogenous IGF-I-IGF1R pathway. However, alphaIR3 did not affect GH stimulation of the number of trophectoderm cells. Therefore, CH does not use secondary actions via embryonic IGF-I to modify the number of blastocyst cells. This result indicates that GH and IGF-I act independently. GH may selectively regulate the number of trophectoderm cells and thus implantation and placental growth. Embryonic GH may act in concert with IGF-I, which stimulates proliferation in the inner cell mass, to optimize blastocyst development.

Storage protein mobilization and thiol protease up-regulation by solid matrix priming in loblolly pine (Pinus taeda) seed embryos

Experiments were conducted to investigate physiological mechanisms of solid matrix priming (SMP) on germination enhancement of loblolly pine (Pinus taeda) seeds. During SMP, osmotic potential in the embryo decreased by 0.65 MPa, concentration of crystalloid proteins decreased to 62% and concentrations of buffer soluble proteins and free amino acids increased by 22% and by 166%, respectively. Observations under an electron microscope demonstrated protein bodies in the embryo were mobilized. Inhibitor analysis indicated thiol protease was the dominant enzyme among endopiptidases to degrade the reserved proteins. A fragment of thiol protease was cloned from the primed seed embryos and it has high identities to those thiol proteases responsive to water stress. RNA get blot analysis showed a 1.5 kb thiol protease gene was up-regulated by SMP. Treatment with E64, a thiol protease inhibitor, negated SMP effects on germination performance, water potentials and protein profiles. Based on the experimental results, reserve protein mobilization induced by SMP in the embryo before radicle emergence might be one of the mechanisms to enhance germination in loblolly pine seeds.

Hyposulfatemia, growth retardation, reduced fertility, and seizures in mice lacking a functional NaSi-1 gene

inorganic sulfate is required for numerous functions in mammalian physiology, and its circulating levels are proposed to be maintained by the Na+-SO42- cotransporter, (NaSi-1). To determine the role of NaSi-1 in sulfate homeostasis and the physiological consequences in its absence, we have generated a mouse lacking a functional NaSi-1 gene, Nas1. Serum sulfate concentration was reduced by >75% in Nas1(-/-) mice when compared with Nas1(+/+) mice. Nas1(-/-) mice exhibit increased urinary sulfate excretion, reduced renal and intestinal Na+-SO42- cotransport, and a general growth retardation. Nas1(-/-) mouse body weight was reduced by >20% when compared with Nas1(+/+) and Nas1(+/-) littermates at 2 weeks of age and remained so throughout adulthood. Nas1(-/-) females had a lowered fertility, with a 60% reduction in litter size. Spontaneous clonic seizures were observed in Nas1(-/-) mice from 8 months of age. These data demonstrate NaSi-1 is essential for maintaining sulfate homeostasis, and its expression is necessary for a wide range of physiological functions.

Fibroblast growth factor 1: A key regulator of human adipogenesis

Obesity, with its related problems, is recognized as the fastest growing disease epidemic facing the world, yet we still have limited insight into the regulation of adipose tissue mass in humans. We have previously shown that adipose-derived microvascular endothelial cells (MVECs) secrete a factor(s) that increases proliferation of human preadipocytes. We now demonstrate that coculture of human preadipocytes with MVECs significantly increases preadipocyte differentiation, evidenced by dramatically increased triacylglycerol accumulation and glycerol-3-phosphate dehydrogenase activity compared with controls. Subsequent analysis identified fibroblast growth factor (FGF)-1 as an adipogenic factor produced by MVECs. Expression of FGF-1 was demonstrated in MVECs but not in preadipocytes, while preadipocytes were shown to express FGF receptors 1-4. The proliferative effect of MVECs on human preadipocytes was blocked using a neutralizing antibody specific for FGF-1. Pharmacological inhibition of FGF-1 signaling at multiple steps inhibits preadipocyte replication and differentiation, supporting the key adipogenic role of FGF-1. We also show that 3T3-L1 cells, a highly efficient murine model of adipogenesis, express FGF-1 and, unlike human preadipocytes, display no increased differentiation potential in response to exogenous FGF-1. Conversely, FGF-1-treated human preadipocytes proliferate rapidly and differentiate with high efficiency in a manner characteristic of 3T3-L1 cells. We therefore suggest that FGF-1 is a key human adipogenic factor, and these data expand our understanding of human fat tissue growth and have significant potential for development of novel therapeutic strategies in the prevention and management of human obesity.

Regulation of MAPK activation, AP-1 transcription factor expression and keratinocyte differentiation in wounded fetal skin

Fetal epithelium retains the ability to re-epithelialize a wound in organotypic culture in a manner not dependent on the presence of underlying dermal substrata. This capacity is lost late in the third trimester of gestation or after embryonic day 17 (E-17) in the rat such that embryonic day 19 (E-19) wounds do not re-epithelialize. Moreover, wounds created in E-17 fetuses in utero heal in a regenerative, scar-free fashion. To investigate the molecular events regulating re-epithelialization in fetal skin, the wound-induced expression profile and tissue localization of activator protein 1 (AP-1) transcription factors c-Fos and c-Jun was characterised in E-17 and E-19 skin using organotypic fetal cultures. The involvement of mitogen-activated protein kinase (MAPK) signaling in mediating wound-induced transcription factor expression and wound re-epithelialization was assessed, with the effect of wounding on the expression of keratinocyte differentiation markers determined. Our results show that expression of AP-1 transcription factors was induced immediately by wounding and localized predominantly to the epidermis in E-17 and E-19 skin. c-fos and c-jun induction was transient in E-17 skin with MAPK-dependent c-fos expression necessary for the re-epithelialization of an excisional wound in organotypic culture. In E-19 skin, AP-11 expression persisted beyond 12 h post-wounding, and marked upregulation of the keratinocyte differentiation markers keratin 10 and loricrin was observed. No such changes in the expression of keratin 10 or loricrin occurred in E-17 skin. These findings indicate that re-epithelialization in fetal skin is regulated by wound-induced AP-1 transcription factor expression via MAPK and the differentiation status of keratinocytes.