With eight former socialist economies joining the European Union, the European Economic Area underwent substantial change. Integration co-operation, mostly through the usage of structural funds requests partners on lower level of development to catch-up (converge) to the average level of development of the Community. Williamson (1965) had shown first that indeed, there is a convergence measured on national level, the price for which, however, is a growing differentiation among the regions. Suggested way of achieving cohesion is the catching-up of less developed regions and nations. When productivity or difference in GDP per capita is taken as the most important indicator for cohesion then catching-up could be achieved by a higher than average European Union GDP per capita growth in the catching-up economies. Hence, economic growth is the key to cohesion. Trade-off theories suggest that the most important trend in international economic co-operation is the hypothetical b (beta) convergence. Convergence depends on economic policy, created competitive advantages. These factors request thorough analysis of various aspects of competitiveness: setting proper ratio between overall and regional development, achieving high-level efficiency in state administration, supporting research and development, enhancing education on all levels, and last but not least, putting in place a well-functioning economic regulation and industrial policy. Concrete challenges for the Hungarian institutional system, regulation and international cooperation are also dealt with related to the above.
Issues related to international competitiveness with regard to social protection, labour markets and effective government are not too many. Hence, this paper pleads for a new vision, one that puts social policy issues' influence, distributive justice and equality firmly back at the centre of the debate about the type of international competitiveness that should be pursued in post-transformation societies, such as Hungary. The study explores the effects of labour-market policies, introduces the term “disembedded social policy” and explores later the possibility of re-embedding this policy. State attention must be focused on reasonable ratios of income equality, similar levels of welfare. The state budget will have to concentrate the neccessary resources for these purposes which limits assets meant for enhancement of competitiveness. Efficient and well-functioning competitiveness policy requests an efficient state administration, as well. The study explores the issue of decentralization and state administration, the role of the state in delegating certain powers to lower levels of administration. Impoverished and weakened governments find it increasingly difficult to pursue the kind of effective micro-economic policies (industrial support and regional development strategies) that are essential features of all successful competitive policies and development experiences. The final part of the study deals with the connection between local governments, competitiveness and democracy.
Authors:András Blahó, Katarína Jánošíková, and Andrea Elekes
A. Stajano: Research, Quality, Competitiveness. European Union Technology Policy for the Information Society (New York: Springer Verlag, 2006, 456 pp.) Reviewed by András Blahó; K. Kouba - O. Vychodil - J. Roberts: Privatizace bez kapitálu (Zvýšené transakcní náklady ceské privatizace) Privatisation without Capital (Increased Transaction Costs of the Czech Privatisation) (Prague: Karolinum, 2005, 178 pp.) Reviewed by Katarína Jánošíková; M. N. Cardwell - M. R. Grossman - C. P. Rodgers (eds): Agriculture and International Trade. Law, Policy and the WTO (Wallingford, Oxon, UK: CABI Publishing, 2003, 330 pp.) Reviewed by Andrea Elekes
Authors:András Blahó, Dóra Győrffy, Tamás Kovács, and Qerim Qerimi
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