Union Single Market Research Articles

Offline: Defending the left hand of the state

On Jan 14, 1992, Le Monde published an interview with the French social scientist, Pierre Bourdieu (1930–2002). Bourdieu drew a distinction between what he called the two hands of the state. The left hand represented those ministries that “are the trace…of the social struggles of the past”—notably, health and education. The right hand was symbolised by “the technocrats of the Ministry of Finance”. Bourdieu had lived through a decade of Margaret Thatcher and Ronald Reagan, and the influence their policies had had on politicians in France. He concluded that he was seeing one of the greatest reversals of human civilisation—“the failure of the state as the guardian of the public interest”. When asked how the public might respond, he cited ancient Egypt. When Egypt passed through a crisis in its state, the country's rulers, losing respect for the public interest, embraced corruption. The public, in despair, turned to religion. Bourdieu argued that after a decade of “neoliberalism”, the public had rejected the state, “treating it as an alien power to be used so far as they can to serve their own interests”. Bourdieu dedicated the final years of his life to uncovering the malign absurdities of neoliberalism on human wellbeing. He showed how neoliberalism undermined the state and the state's responsibilities to its citizens, including the state's responsibility to provide health care. Yet, in mainstream medicine and public health today, few people talk about the connections between neoliberalism and health. Even the most radical public health document of this generation—the Commission on Social Determinants of Health (2008)—held back. Neoliberalism is not a synonym for capitalism. It is a specific form of capitalism, an intensification of capitalism, a political project to reinvent the state and deliver ever greater power to economic elites. As with all forms of capitalism, the market is judged the superior mechanism for the allocation of resources. Neoliberalism then takes a unique turn. It does not endorse a small laissez-faire state. Instead, it demands an interventionist state, one that clears away all obstacles to the market. If markets don't exist, the state creates them (carbon trading). The state will create new spaces for markets to flourish, supranationally (the European Union's single market) and subnationally (decentralisation of power to cities). Neoliberalism is typified by the deification of individual responsibility, privatisation, deregulation, and reregulation—management of the public sector according to private sector principles. For 40 years, neoliberalism has become deeply embedded in our political, economic, and social institutions. Most insidiously, the neoliberal perspective has infiltrated Bourdieu's left hand of the state. Medical and scientific institutions have warmly adopted the neoliberal project. Their Presidents and Provosts, Rectors and Deans, have become its advocates, deploying arguments of realpolitik, economic necessity, and material instrumentality to justify their policies and actions. The rewards—financial and honorific—buy their collusion. Yet one can find examples across the entire scope of medicine and public health to illustrate the harms of neoliberalism to human health. What can be done? First, consider Bourdieu's evidence and arguments. Ask, do they have resonance today? At a moment when we observe the importance of race, gender, class, and power in shaping health, the answer is surely affirmative. Second, conduct empirical studies of the effects of neoliberalism on health and the determinants of health. Too few of such studies are being done, at least partly because funders are indifferent. Finally, when evidence shows harm, construct critiques to resist, counter, and provide alternatives. Our modern times of austerity, precarity, and insecurity make Bourdieu's analysis of immediate importance. In October, the 40th anniversary of the Declaration of Alma-Ata will be celebrated at a conference in Kazakhstan. A new declaration will be launched to resituate the principles of Alma-Ata in an era of sustainable development and universal health coverage. The original declaration claimed health as a social goal demanding the full commitment of political and economic sectors. Alma-Ata was a manifesto defending health equity and issuing a warning against the dawn of a neoliberal epoch. Bourdieu argued that neoliberalism was not inevitable. A renewed Alma-Ata declaration offers the opportunity to stand against neoliberalism and to insist on the strengthening of the left hand of the state.

Supply Chain Expansion and Integration

This paper studies expansion and integration of supply chains in which multiple suppliers sell products to multiple retailers through a wholesale market under uncertain consumer demand. We develop a novel model based on a market-game mechanism in which both suppliers and retailers influence a wholesale-market price. We show that when a supply chain expands to include more suppliers or more retailers (not both), the supply chain profit and efficiency increase. This result prescribes encouraging expansion, for instance, by introducing standardized information technologies or by reducing trade barriers. We then consider the integration of two local supply chains (e.g., an economic union such as the European Union (EU) Single Market Programme) after which suppliers of each local supply chain start transacting with retailers of the other one. We show that the profit of the integrated supply chain is larger than the sum of profits of local supply chains. However, integration may reduce the total profit of firms in a supply chain with a smaller ratio of suppliers to retailers than the other one. Our analysis suggests that the United Kingdom, which has a smaller ratio of suppliers to retailers than the EU, could enjoy greater supply chain profits on aggregate after disintegrating from the EU, while the EU may incur profit losses.

Priorities for Completing the European Union's Single Market

The EU Single Market remains far from completed: progress in goods and services market integration has stalled, financial markets are still fragmented along national lines and the barriers to labour mobility remain high. Restrictive regulation within countries and regulatory heterogeneity across them hamper the internal market, reducing trade and investment flows. Network sectors, such as energy and transportation, are insufficiently interconnected and open to competition, and inefficient as a result. Reinvigorating the single market is one of the key tools to strengthen the recovery of the European Union and restore faster growth of income per capita. To support the recovery, structural reforms that yield short-run as well as long-run gains should be prioritised. Policies enhancing labour and capital mobility are especially relevant, as they provide channels of adjustment to country-specific shocks and reinforce the effectiveness of stabilisation policies. Policies enhancing capital mobility include improved securitisation, better collection and sharing of credit information regarding smaller firms and the convergence of insolvency regimes. Labour mobility within the European Union would profit from reduced administrative and regulatory burden, such as faster recognition of professional qualifications and better portability of social and pension rights. Product markets reforms also have the potential to deliver benefits swiftly, not least by unlocking investment. Regulatory burdens could be alleviated by better impact assessment for legislative proposals and ex post evaluation of policies. Product market reforms in network sectors should include harmonisation of regulations and technical specifications, with the target of establishing single EU regulators. This Working Paper relates to the 2016 OECD Economic Survey of the European Union.

Environmental Standards and International Trade: Latin American Stakeholders and the EU Environmental Footprint Program

This paper presents the unique experience of participation of Latin American stakeholders in the definition of European environmental standards, in the context of the EU Product Environmental Footprint (PEF) Program for coffee. The PEF Program is an ongoing process and the results will not be available until 2016-2017. The author’s focus is trade-related, and originates in a concern about the competitiveness of Latin American exports on the European market.Section I of this paper is an overall Introduction and deals succinctly with issues such as Trade, Climate Change and Environmental Standards. Section II, presents the European Union (EU) Single Market for Green Products initiative and the European Commission (EC) Product Environmental Footprint (PEF) Program; Section III, deals with the PEF Pilot Program for Coffee and Section IV, presents the participation in the PEF process by Latin American stakeholders, through the activities of the Latin American and Caribbean (LAC) Coffee Environmental Footprint Network, as well as some controversial issues raised during this process. Section V, draws some conclusions about this process.

Determinants of profitability in European manufacturing and services: evidence from a dynamic panel model

Recent advances in panel data econometrics are used to investigate the determinants of profitability for manufacturing and service sector firms in Belgium, France, Italy and the UK, for the period 1993–2001. The paper synthesizes empirical models that have been used by researchers in industrial economics, strategic management and accounting and finance. Despite the formation of the European Union's Single Market in goods and services, abnormal profit still appears to persist significantly from year to year. There is evidence of a negative size-profitability relationship, but the relationship between market share and profitability is positive, and stronger in manufacturing than in services. The relationship between a firm's gearing ratio and its profitability is negative, but firms with higher liquidity tend to be more profitable.

Regional Agreements and Trade in Services: Policy Issues

Every major regional trade agreement now has a services dimension. Is trade in services so different that we need to modify the conclusions on preferential agreements reached so far in the realm of goods? This paper examines, first, the implications of unilateral policy choices in a particular services market. It then explores the economics of international cooperation and identifies the circumstances in which a country is more likely to benefit from cooperation in a regional rather than multilateral forum. Finally, it reviews some evidence on services liberalization under the European Union's Single Market Program.

INSTITUTIONAL ENTREPRENEURS AND CULTURAL FRAMES - The case of the European Union's Single Market Program

Explaining the emergence of the European Union's Single Market Program requires making sense of how that institutional project came on to the political agenda. This article uses insights from historical and organizational institutional theories to supplement intergovernmentalist and neofunctionalist accounts of the Single Market Program. The European Union was facing a political crisis in the early 1980s caused by an inability of states to find a set of institutional arrangements that were in their collective interest. This crisis enabled the European Commission to act as an institutional entrepreneur in several ways. They produced the Single Market Program as a project, helped build a political coalition to support its basic tenets, and ultimately reorganized the preferences of state actors. The power of the cultural frame approach is that it helps explain how institutional reform and monetary union - projects that were rejected by the states in 1983 - came to be accepted over the decade of the 1980s.

Turkey and European Union Enlargement: Cross-Border Projects and the Pre-Accession Strategy for Non-Members

Since the Customs Union came into effect on 1 January 1996, Turkey has effectively become part of the European Union's single market. This high degree of economic integration has not been matched in the sphere of political and social integration. Turkey was omitted from a list of countries with which accession negotiations began in March 1998, and the Cardiff European Council of May 1998 confirmed Turkey's marginalization from the current process of enlargement.