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Business and Economics
Debts, crises and competitiveness
Interview with Ángel Gurría, Secretary-General of the OECD
In this interview, Ángel Gurría looks back at a decade of financial and economic crisis and draws conclusions for macroeconomic policy. What concerns the European Economic and Monetary Union, he stresses the need to further improve the shock absorption capacity of the single currency. He insists that the OECD remains committed to going beyond GDP, and this is particularly relevant at a time when a new Jobs Strategy is being developed. He also highlights some key chapters in the 22 year long cooperation between the OECD and Hungary.
This article attempts to estimate the total factor productivity (TFP) for 35 NUTS-2 regions of the Visegrad Group countries and to identify its determinants. The TFP values are estimated on the basis of the Cobb-Douglas production function, with the assumption of regional differences in productivity. The parameters of the productivity function were analysed with panel data, using a fixed effects model.
There are many economic variables that influence the TFP level. Some of them are highly correlated, and therefore the factor analysis was applied to extract the common factors – the latent variables that capture the common variance among those observed variables that have similar patterns of responses. This statistical procedure uses an orthogonal transformation to convert a set of observations of possibly correlated variables into a set of values of linearly uncorrelated variables called principal components. Each component is interpreted using the contributions of variables to the respective component.
I estimated a dynamic panel data model describing TFP formation by regions. An attempt was made to incorporate the common factors among the model’s explanatory variables. One of them, representing the effects of research activity, proved to be significant.
The aim of the paper is to analyze economic convergence of the Western Balkan countries towards the European Union member states with two types of measurement methodology, sigma and beta convergence. Sigma convergence measures the dispersion of real per capita GDP among the countries and beta convergence is based on the neoclassical growth theory. The main hypothesis of the paper is that the recent financial crisis has negatively affected the convergence process of the Western Balkan countries towards the twenty-eight member states of the European Union (EU-28). The relationship between selected macroeconomic variables and the rate of per capita GDP growth are econometrically tested. Sigma and beta convergence are estimated for the period 2004-2013 and two sub-periods: 2004-2008 and 2009-2013. The empirical findings support the hypothesis of economic convergence. The negative effects of the crisis on per capita GDP growth are confirmed, resulting in a slower convergence process. Dissimilarities between the growth patterns of the analyzed groups show the considerable heterogeneity of growth, i.e. the convergence clubs.
The article contributes to the debate on how land prices are affected by production values, by farming subsidies and by environmental amenities. The authors carried out a comprehensive review of the literature on the actual determinants of land value and made an attempt to classify different approaches to this matter. Then they performed an empirical case study of the drivers of agricultural land values in a leading agricultural region of Poland. The aim of the study is to establish how the use values of land, amenities and policy payments contribute to land values in the Single Area Payment Scheme (SAPS), which operates in Poland. The study is based on a sample of 653 transactions during the years 2010–2013. A hierarchical regression (ML-IGLS method) was used, where the unobserved heterogeneity is attributed to the location-specific factors at different levels of analysis. Results indicate that the policy payments for public goods decapitalise the value of land, whereas the environmental amenities have a relatively strong influence on farmland prices.
For over half a decade, Syria, one of the key states in the Middle Eastern region has been experiencing turmoil. Many consider ethnic and religious differences as the main source of the confl ict. While this starting point is correct, analysts have failed to emphasize the energy confl icts in the background of the international and regional frontlines. The paper aims to investigate the energy related motivations of the most important regional and global actors amidst the confl ict in Syria.
This paper highlights the need to limit resource use, especially energy resource use in the global economy. First, the scientific literature on capping resource use in light of three primary issues (sustainable scale, fair distribution, efficient allocation) is reviewed, as ecological economics suggests that these concerns must be addressed to move towards sustainability. Second, the paper examines how several tools proposed for capping energy use can or cannot deliver effective responses to the three primary concerns in ecological economics. Finally, recommendations are provided for future research on understanding and analysing energy capping tools to effectively achieve both environmental and social goals.
The aspiration of this research paper is to investigate the impact of international gold prices on the equity returns of Karachi Stock Index (KSE100 index) of Pakistan Stock Exchange. The daily observations from January 1, 2000 – June 30, 2016 have been divided into three sub-periods along with the full sample period on the basis of structural breaks. Descriptive analysis used to calculate the average returns, which showed significant returns of KSE100 for the full sample, the first and the third sample periods as compared to gold returns. Standard deviation depicted the higher volatility in all the sample periods. Correlation analysis has shown an inverse relationship amid equity returns and gold returns, whereas, Philips-Perron and Augmented Dickey-Fuller tests have been employed, and time series data became stationary after taking the first difference. Johansen cointegration results have shown that the series are cointegrated in the full-sample and the first sample periods. Thus, this has demonstrated the long run association amid equity returns and gold returns in the first sub-sample and the full-sample periods. However, the second and the third sub-sample periods do not exhibit long-term association amid equity returns of KSE100 and gold returns. The outcomes of Granger causality approach identified bidirectional causation amid equity returns and gold returns in the full sample period in lag 2, and unidirectional causality has been observed from gold prices to stock prices in the full sample and the first sub-sample periods in lag 1 and lag 2 respectively.
This study examines the relationship between ethical culture and work motivation, whereby specific dimensions of ethical culture are measured by employing the Corporate Ethical Virtues Model (CEV) developed by Muel Kaptein and his associates. The analysis is based on data collected by means of an online survey conducted in Croatia on a sample of 400 employees of private and public sector organizations. The results presented in the paper show that clarity is rated the highest, while supportability is the lowest-rated ethical virtue in the aforementioned organizations. Ethical culture as a whole is a good predictor of work motivation, with congruence of the management being the most important predictor. An interesting fi nding of this study is also a negative association between sanctionability and work motivation when all other predictors are being held constant. It is thus concluded that the CEV model represents a good measurement tool with a proven construct validity outside its original social and cultural context. The paper closes with suggestions for future research, especially for a possible broadening of the application of the CEV model.
Perception of tax evasion by individual citizens is of considerable interest to politicians, since people’s perceived attitudes affect the approach to tax compliance throughout the society. It is thus worth identifying personal characteristics that are related to a higher degree of tolerance and justification for tax evasion. Based on the 2008 European Values Survey data and using descriptive statistics, the paper discusses the relationship between the respondents’ characteristics and their tendency to justify tax evasion. The study finds a strong relationship between this tendency and age, educational attainment and economic activity, the two other variables (parenthood and income) indicating only a weak relationship. Moreover, the current issue allows us to convincingly argue against the regression analysis stereotypes which often yield biased and confl icting results. The paper confirms our constructive criticism, thus opening up space for an extended discussion of a more balanced use of both descriptive statistics and regression models.
This article aims to explore the relationship of the shadow economy with the institutional environment and develop practical recommendations for government policies around the world, and particularly in Russia. The urgency of the issue under research is caused by the existing need to study the shadow economy in order to find ways to reduce its scale and level out its negative externalities. Despite the fact that most of the papers focus on tax burden as a fundamental determinant of the shadow economy, the authors of this article believe that institutional tools can expand the boundaries of research on the content of the shadow economy as an economic category. Statistical analysis of 105 countries with different development levels revealed a stronger correlation between the quality of institutions and the size of the shadow economy than the one between total tax burden and the size of the shadow economy. The findings of this article can be useful in developing state strategies for combating the shadow economy and carrying out economic policies of the state as a whole.
Oil-abundant countries, Iran, Iraq and the Gulf Cooperation Council (GCC) countries try to improve democratic institutions and to manage their chronically big governments, while experiencing decreased world oil prices. These countries pursue open door policies. Most of the foreign revenues of the region stem from oil and gas exports. Thus, how to manage the production and exports of fossil resources is of great importance. This study aims to analyse the effects of quality of democracy, government size, and the degree of openness in explaining depletion of reserves between 1985 and 2015. After testing for panel unit root and co-integration, a panel data model was estimated considering random effects. The results indicate that democratisation and political stability causes higher depletion of oil. In addition, government size affects depletion in a non-linear form, so that oil production is maximised, when government expenditure accounts for nearly 14% of GDP, on average. Furthermore, trade openness positively impacts on the oil depletion. In this case study, higher oil depletion follows strengthening democratic foundations, resizing the public sector, expanding politico-economic ties with trade partners, and applying the modern technology in the upstream oil industries.
A stronger Central Europe means a stronger EU and transatlantic community: Croatia’s contribution to our cohesion and resilience
President of the Republic of Croatia: Kolinda Grabar-Kitarović
This article examines volatility spillover among Western Balkan’s stock markets and selected developed markets. If there is an evidence of weak linkage between various markets, then there are potential benefits that could arise from international diversification. However, if we analyse the relationship between two markets that are different in terms of their economic development, and if there is a strong connection between them, market shocks from the developed markets can have an impact on the frontier/emerging markets. Market integration can be indicated with returns linkage and transmission of shocks and volatility between markets. Hence, this can have implications for investment strategies. It is found that there is statistically significant regional spillover between countries of the Western Balkan region. Also, there is global spillover between developed markets and this region as well. Furthermore, there is evidence that Western Balkan’s markets are late in response to important market events, and that can be used when formulating investment strategy.
In our paper we focus on situations when central banks have to conduct monetary policy in a world in which they cannot rely fully on what is regarded the best practice and they have to cope with financial system inherent tendency to be unstable. Both phenomena are rooted in János Kornai’s intellectual heritage highlighting that economy tends to divert from equilibrium and that soft budget constraint erodes economic actors’ behavior.
It is argued that increased freedom to run economic activities combined with the growing impotence of national governments (i.e., globalization) have contributed to the secular growth slowdown at the global level. Fast globalisation-driven growth of international trade has unleashed the global race for economic surpluses. The process involves the suppression of wages and widening income inequalities – restricting aggregate demand globally. A “beggar-thy-neighbor” tactics of keeping large trade surpluses by countries successfully suppressing wages and domestic demand is likely to be unproductive. Overcoming the secular stagnation may not be possible without safeguarding equilibrium (or balance) in international transactions between major industrial countries – even if this may necessitate that in most (or all) of them the public sectors run large fiscal deficits permanently.
In 2002, János Kornai and the author organized a project that sought to confront distrust, corruption, and dishonesty in the transition economies of Eastern Europe. In reflecting on that project, this essay highlights present-day weaknesses in the region’s transition and stresses equally troubling developments in the United States that could make government less open to input from civil society groups and low-income individuals. Building a trustworthy state and creating social trust remain challenges for committed democrats in both developed and developing societies.
The economic challenges countries face when adopting personalized medicine technologies provide an important illustration of many of the concepts articulated by János Kornai in his pioneering research on innovation in market-driven, capitalist surplus economies. In Chinese philosophy, Yin and Yang often represent contradictory yet inseparable opposites – two forces that not merely coexist, but are synergistic and mutually dependent. This concept is an apt analogy for the relationship between innovation and shortage in the health sector. Dangers arise from over-emphasizing the Yin of innovation over the Yang of access, and vice versa. If we over-constrain innovation, we die needlessly early and forfeit quality of life that innovations might have enabled. If we do not distribute access to innovations equitably, we diminish our humanity, suffer backlashes from populism and distrust of science and expertise, and risk social instability, even violent conflict.
This paper explores the evolution of Kornai’s thought on general equilibrium theory (GET) and his position on mainstream economics. Three moments in this evolution will be highlighted, starting by his rejection of GET and advocating disequilibrium in Anti-Equilibrium (1971). While Kornai does not treat the “equilibrium paradigm” as irrelevant, he suggests an alternative paradigm, namely economic systems theory that he further develops in the 1980s as “system paradigm”. Economics of Shortage (1980) marks a second phase in which Kornai distinguishes Walrasian equilibrium from normal state or Marshallian equilibrium. In this phase, he supports Marshallian equilibrium rather than disequilibrium. Finally, By Force of Thought (2006) is a critical self-appraisal in which Kornai considers Anti-Equilibrium as a “failure” and acknowledges GET as a benchmark of an ideal competitive market. He now advocates a Walrasian equilibrium as an abstract reference model, but refuses to consider this model as a description of reality. In this sense, he rejects the New Classical economics. Paradoxically, however, his original heterodox concept of “soft budget constraint”, irreconcilable with standard microeconomics, has been integrated into new microeconomics as an optimal intertemporal strategy of a maximizing agent in the absence of credible commitments. It will be argued that Kornai’s so-called failure is rather related to his half-in, half-out mainstream position, while his institutionalist system paradigm is still a heterodox research project of the future.
János Kornai rejected the relevance of Walrasian equilibrium and considered only disequilibrium states to be compatible with reality in his Anti-Equilibrium. His research was guided by the belief that reality and theory should form an integral unit. Neoclassical economists did not accept his anti-equilibrium theory, which motivated Kornai to relentlessly provide additional evidences. The article follows this exciting and noble struggle from a new perspective in the context of scientific theory.
Although writing as an economist, János Kornai addressed fundamental questions of political economy throughout his career. These considerations began with his model of state socialist economies, but were explicit in his work on transitions and the political economy of reform as well. This paper provides an overview of those contributions, with a particular attention to the relationship between regime type – democracy and authoritarian rule – and economic structures, processes, and outcomes.
János Kornai’s Anti-Equilibrium was ahead of its time when it was written, and even today, when system dynamics software is extensively used in engineering and other disciplines, it remains ahead of its time in economics, which is still hampered by the dominant equilibrium-dominated modeling approach and the subjective beliefs that the truly sterile state of equilibrium is preferable to the real dynamic instability of actual capitalism. I show that the dead-end in which economic theory finds itself today is easily escaped if we adopt the system dynamics approach Kornai recommended in 1971, and derive macroeconomics directly from the structure of the macroeconomy.
The economics of institutions and comparative systems owes an enormous debt to János Kornai. This was well exemplified by Kornai (2014a), offering a synthetic characterization of socialism and capitalism, respectively, as shortage and surplus economies. I was very fortunate, over the last fifty years, to have had many opportunities to meet him and to talk to him, and to discuss these issues directly with him. János can be very persuasive, and over the years I have somewhat converged towards his views, but in this essay, I am going to rehearse one residual major disagreement on the shortage economy, and three reservations on capitalism as the surplus economy which, after discovering from talking to him that he was in basic sympathy with them, I have downgraded to qualifications.
I consider the application of János Kornai’s soft budget constraint (SBC) concept to the state capitalist economy. I argue that interaction of SBC with agency problems within the government bureaucracy helps explaining a major feature of state capitalism – failure to privatize underperforming state-owned enterprises (SOEs). Bureaucrats supervising the failing SOEs prefer to keep them afloat and gamble for resurrection; in contrast, privatization would involve recognizing the loss, which would result in acknowledging the bureaucrat’s failure that is disincentivized by the state. This endogenously emerging preferential treatment of state-owned firms creates a competitive advantage against private firms; this explains why in state capitalism privatization may result in lower rather than higher productivity and therefore remain unpopular.
Using a case study, this paper examines how EU standards of geographical indications (GIs) can integrate into Hungarian socio-embodied patterns. It uses apricots from the underdeveloped Gönc region of Hungary as an example, defined in the EU GI context as a local resource of cultural identity. The collective memory as a cultural heritage of the Gönc region is examined in relation to products and services that have existed for generations. The aim of this paper is to provide evidence that without geographical circulation, exchange, and appropriation of products, the associated knowledge of innovation strategies, innovation capabilities, and the market outcomes of firms in the food industry does not provide absorptive capacity. It suggests that innovative responses to existing isolated economic services could provide coherence among the three pillars of sustainability, given policy and institutional innovations designed to foster innovation and expand markets.
This paper strives to investigate the level of business cycles synchronisation between 8 Central and Eastern European Countries (CEEC) and the EU-15. We use wavelet coherence and phase difference methodology as a very suitable tool that observes simultaneously the strength of business cycles’ co-movement in the aspect of time as well as in the aspect of frequency. The results indicate that the business cycles of CEECs are generally synchronised with the EU-15 business cycles, whereas distinct differences existed before, during, and after the financial crisis (2008–2009) and during the European sovereign debt crisis (2010–2011). In other words, we demonstrate that very strong business cycles synchronisation occurred in almost all CEECs during crisis periods and at higher wavelet scales, while only moderate synchronisation is recorded in relatively tranquil periods at higher frequencies. The results suggest that smaller CEECs, but also larger countries such as the Czech Republic, Hungary, and to some extent Slovakia as well have a higher level of business cycles synchronisation with the EU-15, particularly in the crisis period at short-run as well as at long-run fluctuations. However, we do not find strong business cycles co-movement in cases of Poland and Latvia via HP and BP filters at higher frequencies during the crisis, which might indicate a higher resistance of these countries to external systemic shocks.
The article examines how the roles of state institutions and state owned enterprises have been changed in Ireland since its independence, with special regard to the role of state ownership and crisis management. The history of planning and social partnership, the courses of nationalisation and privatisation and the problem of damaging the state are discussed as well. The author concludes that the crisis has not resulted in the strengthening of the developmental or welfare role of the state, the evolution of a “developmental welfare state” has become less likely in Ireland in the course of crisis management. Another lesson is that the state can manage certain bad assets of the private sector in a way that yields a profit to the public. There are other costs of the crisis management, however, which are to be paid by the people and result in a decrease of state ownership and a shrinking of the welfare systems.
This paper presents the initial results of a significant research conducted under the IOC PhD Student Research Grant Programme with the support of the Hungarian Olympic Committee. A macroand meso-level analysis were conducted within the framework of this research; this paper presents the macro model, with the aim of capturing important features of the economic, political and institutional environments which affect the productivity of a nation’s sport performance and growth; with this the paper contributes to an understanding of the key elements of high-performance sport development. The macro model divides sport into two groups – individual and team sports – in order to determine if there are any differences at the macro level. The influence of the economic factors which were included in the models shows a decreasing effect on the market share of nations, which means that other factors must also play a significant role in a nation’s international sporting success. The responsibility of national sport governance will become even more important in elite sport success in the future, which shows that the efficient utilisation of recourses will also become a key factor, along with an appropriate structure, organisation and integrated coordination.
Land tenure security and land transfer markets are once again a topmost priority in the policy development agenda because of their expected outcomes in terms of equity and efficiency in the rural sector of China. The policy of rural land rights confirmation has been implemented since 2010 to enhance land tenure security and the transferability of farmland. However, only a few studies have been conducted on the effect of rural land rights confirmation on farmland transfer. Therefore, we use household-level survey data from 48 villages across Tianjin City and Shandong Province to explore whether rural land rights confirmation promotes the transfer of farmlands. Our empirical results show that rural land rights confirmation has significant and positive effects on the likelihood and amount of transfer-out land at the 5% significance level, but the effect on transfer-in farmland is insignificant. The results of the study have several policy implications. For instance, the agricultural comparative advantage should be improved through various agricultural subsidy policies. Moreover, the intermediary service network for farmland transfer should be established, and strengthening the non-farm employment skills and improving the non-agricultural employment market are necessary for the rural labour force.
This paper presents a case-study to demonstrate the calculation methods of growth contributions using structural decompositions of input-output tables and their Hungarian applications. Although the required data are available with a considerable time-lag, results show that taking backward linkages through demand for inputs and value chain multipliers into account can significantly alter the picture on the growth effects of industries and final demand categories by the conventional approach based on quarterly GDP calculations. This can be instructive for analysts and policy- and decision-makers not only in Hungary, but also in other countries. The study was performed by using public macroeconomic and sectoral data obtained from the Hungarian Central Statistical Office.
Europe and its southern neighbors
Interdependence, security and economic development in contemporary EU-MENA relations
The paper analyzes European Union – Middle East and North Africa (EU-MENA) relations from the perspective of complex interdependencies. As a theoretical framework, it outlines the application of Barry Buzan’s Security Complex Theory on the Euro-Mediterranean (or EU-MENA) region-pair. This involves the provision of a general overview on the several sectors of interdependence between the two regions, namely the military, political, economic, societal and environmental sectors. The paper then turns towards the deeper elaboration of the economic sector and identifies it as the most potent sector for European activism, where the Union could work most effectively on building a long-term solution for the stabilization of the MENA. As conclusions, the paper argues for a deeper economic integration between the two regions, which would provide opportunities for the MENA’s population to be economically successful “at home”, therefore reducing not only the highly visible migration pressure on the EU, but also other security threats such as civil wars, organized crime and weapon proliferation.
The sovereign debt crisis of 2010 in the euro area significantly decelerated the monetary integration of the EU. The main purpose of this paper is to explore whether five post-communist member states of the EU are mature enough to adopt the euro. We used nominal exchange rates in the error correction model with asymmetric power ARCH (ECM-APARCH). Our results highlight that EU membership positively increased the impact of the euro on the currency of each of these countries in the short-run. In contrast, the long-term effect of the euro on each currency is negative for the Czech Republic, Hungary, and Croatia. Wholly different results were obtained for Poland and Romania. The APARCH model showed that the negative responses of the euro had a greater or neutral effect on the conditional variance of each currency instead of the positive responses. The debt crisis of the euro area had no impact on the dynamic linkages between the currencies. Our research concludes that Croatia, the Czech Republic, and Hungary are not ready to join the euro area in the near future. On the other hand, the currencies of Poland and Romania are already aligned with the fluctuations of the euro.
This paper outlines major theoretical and methodological problems in Quality of Work Life (QWL) research within organisational studies and discusses possible solutions, based on extensive literature analysis. An electronic search in the Scopus database found 1,244 publications utilising the QWL concept. From this sample we selected 387 papers dealing directly with QWL and compiled a final set of publications for detailed review. The literature analysis revealed the absence of a clear and concrete understanding of QWL, various (and often incomplete) approaches to QWL content and indicators and interference between QWL and other concepts such as ‘job satisfaction’, which all resulted in a general confusion about the notion in academic discussions. As a possible solution, we suggested distinguishing clearly and including the following in the single integrative research instrument: 1) an aggregate subjective QWL measurement tool and 2) an aggregate objective QWL measurement tool. Finally, we present arguments for a new understanding of QWL, combining subjective and objective measures in the context of a general integration between ‘working conditions’ and ‘needs satisfaction’ approaches.
In order to define and implement the most effective measures to overcome the difficulties of the post-crisis period, the policy-makers of ECB must identify not just main weaknesses of each banking system, but their strong points also. This requires the application of multi-criteria analysis, considering that policy-makers need to take into account a number of different aspects that, on the whole, indicate the quality of the banking system. Our aim is a comparative analysis of European banking systems right after the Brexit moment and within the framework of the tight new Basel III regulations. In this paper, we have ranked the banking systems of the 28 EU member states using multi-criteria analysis, specifically the PROMETHEE II method. The use of the PROMETHEE II method in combination with the entropy method offers a comprehensive insight into the banking system of each member state, given that the observed countries are ranked according to 9 conflicting criteria that are mostly used in banking system analysis. Our analysis shows that the banking systems in Central and Eastern Europe are the best performers, while the EMU’s developed banking systems such as the German, Italian, British, and French one are positioned among the last ranked. The Portuguese and Greek banking systems are, as expected, ranked in the last positions in our list. The obtained results also pointed out that the ECB should change its approach to the management and further development of a European Banking Union.
While technological innovation is a core element of efforts to increase public welfare, innovators are rarely trained to take the societal dimensions of innovation into account in a systematic manner. Responsible innovation has emerged within policy discourses worldwide to address this challenge. Implementing responsible innovation in daily practices, however, requires addressing both the multidisciplinary and the culturally situated nature of innovation processes. Effectiveness of Socio-Technical Integration Research (STIR) has been tested, but primarily only in developed countries, raising questions about how well it works in innovation and cultural settings differing from Western cultures. Therefore, this study analyzes the possibities of institutionalizing responsible innovation in an Eastern European country, namely in Hungary. For this investigation, we conducted STIR-pilots in two Hungarian natural science research groups. The findings show that though the original STIR method can be adapted to support responsible innovation practices in Hungary, the differences in the innovation environment and culture (such as grant-driven innovation; lack of trust; less knowledge on responsible innovation; lack of law on the societical impacts of research and innovaton) require methodological modifications in order to improve STIR’s effectiveness.
Equivalence scales are commonly employed in income analysis to compare the wealth of households of various compositions (e.g., 0-child, 1-child). The choice of weights for this type of analysis is not self-evident. In this paper, subjective equivalence scales for households in Poland, the Czech Republic, and Hungary are estimated. We use longitudinal EU-SILC data for 2005–2012 following the approach of Goedhart et al. (1977) as employed by Bishop et al. (2014). The use of longitudinal data shows that previous results on the subjective minimum income that were based on the OLS estimates for cross-section data overestimated the impact from current income and underestimated the role of economies of scale. Subjective equivalence scales imply a decreasing marginal cost of children in the three countries, which makes them distinct from the OECD scale. The marginal cost of a first child is similar to the values assumed in the OECD scale, but the cost of a second child is much lower.
The Czech Republic benefits from its geographical location, relatively cheap and educated labour force, industrial tradition, high economic growth, and political stability. During the last two decades, Czech-Chinese relations have intensified mainly in terms of trade but also in investment and, in more recent years, also at the political level. In this paper, we assess existing trade and investment relations between the two countries, the Czech Republic’s potential for Chinese trade and investment presence in the EU in comparison to other V4 countries, and also explore the future opportunities and threats for more intensified relations. The trade analysis reveals that the fragmentation of world production has enabled more Chinese value added exports to reach the EU western markets through processing in the Czech Republic. Mutual cooperation can be beneficial for both sides as long as both countries avoid corruption, bridge cultural differences, deal with profit repatriation and prevent misconduct in property rights.
This paper aims to provide an overview of the key themes in the development of carbon accounting and auditing over the past twenty years. The evolution of the field since the Kyoto Agreement of 1997 has been divided into four stages. The need to account for and disclosure of greenhouse gas-related emissions of industrial organizations has emerged parallel to growing concerns about climate change, and international and national policy developments in the field have followed. Carbon accounting is an emerging field of business economics and covers a wide range of activities, including the measurement, calculation, monitoring, reporting and auditing of greenhouse gas emissions at organizational, process, product or supply chain levels. Various initiatives (such as the Greenhouse Gas Protocol or the Carbon Disclosure Project) motivate and assist industrial organizations in accounting for and reporting their achievements in the field. Different methodologies of carbon accounting (bottom-up, top-down and hybrid) enable industrial organizations to quantify their emissions; however, some trade-offs emerge when choosing among these approaches. Carbon accounting should not be an isolated task for businesses. On the contrary, there is a strong need to integrate carbon accounting issues into different functional fields in order to achieve both corporate and climate policy goals.
In this paper, the prospects of the political party Alternative for Germany (AfD) are examined on the basis of demand and supply factors which favor a party’s electoral breakthrough and longtime persistence. It will be argued that although the party is currently profiting mainly from growing disillusion with Chancellor Angela Merkel’s open-door refugee policy, it should not be treated as a single-issue (anti-immigrant) phenomenon. Building on a comparison with its unsuccessful predecessor, The Republicans, we argue that the party is better equipped to deal with factors usually obstructing the success of populist right parties in Germany.
The collapse of one-party dictatorship and centrally planned economy based on state ownership opened up the pathways for the formation of different postsocialist systems. Among other variants in a certain number of postsocialist states, democratic capitalism could emerge. Recently the system of postsocialist capitalism has been going through the process of regression leading to a distorted and defective democracy and capitalism in some postsocialist countries. This essay reviews the literature on the relationship of democracy and capitalism in order to contribute to the creation of a theoretical framework for the analysis of the regression of postsocialist democratic capitalism. In the paper the argument is made that for the explanation of the regression of democratic capitalism, the structural analysis of postsocialist democratization and marketization should be supplemented with a theory that reflects on the role of political actors, the role of political parties, party competition in this process.
Comparative economics and European integration
Convergence and divergence in the European Union and the effects of anti-crisis policies
Transformation processes in Central and Eastern Europe and deep economic reforms in China and other emerging countries did not end the variety of economic systems. Various brands of comparative economics have shown this variety in both theory and different countries. An increasingly important form of this variety concerns the process of European integration. Systemic differences within the European Union are the source of difficulties and tensions, of a European conundrum that appears in different forms and ways and that make the sustainability and progress of integration difficult. This article looks at the logic of and proposals by the “New Comparative Economics” and the “Variety of Capitalisms” literature to find an explanation to the problems and difficulties that the European integration is meeting, going beyond the standard technical explanations based on European convergence criteria. It finds that both theories, although important and useful for contributing to solving the European conundrum, do not account sufficiently for the novelty and the complexity of European integration.
This paper deals with the Altab Ali Park and its significance in regards to the Muslim community in the London borough of Tower Hamlets. Using Pierre Nora’s concept of lieux de mémoire, I would like to demonstrate how the Bangladeshi Muslim minority and the rest of the community of Tower Hamlets construct their collective memory through the transformation of the park. The article argues that the Altab Ali Park is in Pierre Nora’s term a lieu de mémoire with multiple layers, which has been developed to enhance community cohesion in the Borough. The park itself contains further lieux de mémoire with clear messages against extremist secular and religious ideologies. This makes the park a symbol of multicultural coexistence in the district, which could help increase community cohesion through shaping the identity of the inhabitants of Tower Hamlets.
This paper evaluates the efficiency of Active Labour Market Policies (ALMPs) in the European Union (EU). The paper first reviews the main trends governing the evolution of the European Social Fund (ESF) since its creation. The ESF promotes public expenditure in ALMPs in order to foster social cohesion across the EU. In order to test to what extent this strategy can be backed up by facts, we estimate the impact of public expenditure on ALMPs on the employment rate using panel data from 28 European countries (1985–2011), taking into account the endogeneity of the explanatory variables and the dynamic behaviour of their relationship. Results support the hypothesis that expenditure in ALMPs is more beneficial for employment than aggregate public expenditure. In addition, we show that periphery countries observe a larger efficiency of their ALMPs. These results support the recent policy strategy undertaken by the European Commission to raise the budget devoted to ESF in Member States experiencing higher unemployment rates.
Although the macroprudential regulation only became a central topic of bank regulation after 2008, recognising and analysing risk, what now we call macroprudential, has formed part of the thinking about banking risk for a long time. A real turn of events was caused by the Global Financial Crisis. Since then, as a consequence of the huge taxpayers’ burden and the mutual reinforcing effect of sovereign and banking crises, the main course of bank regulation has become the elaboration and implementation of regulation with a macroprudential perspective. This article reviews the history of the international evolution of macroprudential regulation from the perspective of both the regulation’s motivations and its conceptual and practical developments. Its main focus is the development of the ideas of a macroprudential perspective on prudential policy and the way these ideas eventually led to concrete experiences with macroprudential regulatory tools. As a conclusion, the author raises the question of whether the financial system has become more stable by implementing the current form of macroprudential regulation.
This article seeks to assess how the absorption of European the Union funds by the Polish voivodeships reflects two basic types of strategy in their allocation, i.e. the polarising and the equalising model. The analysis embraced 16 regional operational programmes (ROPs) between 2007–2013. The frame of reference adopted in the research was the centre-periphery model. Classes of peripherality were distinguished for each voivodeship, and absorption profiles of EU funds were determined for areas differing in their levels of peripherality. The goal of the article was achieved in a multi-stage research procedure ending in the construction of a synthetic index of the spatial orientation of support within the ROPs. The analysis demonstrated that the features of the polarising model tended to predominate in intra-regional policy. In most cases, however, the distribution of EU support represented a mixed model, with a shift towards the polarising one.
