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This paper examines the relationship between trust and economic growth. Taking panel data and using a fixed-effects estimation for a 41-country sample over the time period from 1980 to 2004 and with a total of 129 observations, the paper points out that economic growth is negatively related to an increase in trust. This negative finding is in contrast to most empirical findings using a cross-sectional design. The common knowledge which has governed the nature of discussions in social science and economics for the last ten years, that trust is generally positively related to economic performance, must be seriously questioned. From a policy point of view an increase in trust is crucial for countries with low levels of trust, but can likely be neglected by countries with sufficient levels of trust and may even hamper economic performance in countries with high levels of trust. The relationship is tested in the context of EU countries, OECD countries and developing countries. Interpersonal trust and systemic trust is differentiated. [ABSTRACT FROM AUTHOR]

After a decade of a successful peg to the euro, the authorities of Cape Verde are considering the official euroisation of the country. For an ex ante economic evaluation of such a move, this paper assesses whether Cape Verde fulfills key economic criteria devised by the optimum currency areas literature, using as benchmark the comparable records of the 27 European Union (EU) countries. The answer is positive. Overall, we find that Cape Verde is not less suited for euroisation than some of the current euro area members and most of the remaining members of the EU. [ABSTRACT FROM AUTHOR]

Over the last two decades many European governments have pursued ambitious research and development (R&D) policies with the aim of fostering innovation and economic growth in peripheral regions of Europe. The question is whether these policies are paying off. Arguments such as the need to reach a minimum threshold of research, the existence of important distance decay effects in the diffusion of technological spillovers, the presence of increasing returns to scale in R&D investments, or the unavailability of the necessary socio-economic conditions in these regions to generate innovation seem to cast doubts about the possible returns of these sort of policies. This paper addresses this question. A two-step analysis is used in order to first identify the impact of R&D investment of the private, public, and higher education sectors on innovation (measured as the number of patent applications per million population). The influence of innovation and innovation growth on economic growth is then addressed. The results indicate that R&D investment, as a whole, and higher education R&D investment in peripheral regions of the EU, in particular, are positively associated with innovation. The existence and strength of this association are, however, contingent upon region-specific socio-economic characteristics, which affect the capacity of each region to transform R&D investment into innovation and, eventually, innovation into economic growth. [ABSTRACT FROM AUTHOR]

This paper develops multi-dimensional analyses of socio-spatial relations. Building on previous research, we identify some tensions associated with different dimensions of socio-spatiality and introduce the theme of compossible and, more importantly, incompossible socio-spatial configurations. Two short studies are deployed to highlight the socio-spatial implications of the principle that not everything that is possible is compossible. The first shows the power of thinking varieties of capitalism compossibly (via the concept of variegated capitalism) and then examines the successive strategies adopted by the European Communities and European Union to address the significance of changing patterns of variegation for approaches to European integration, spatial strategies, and economic and social policies. The second case discusses some related problems for state spatial projects, starting in the 1980s with spatial planning, promotion of a Europe of the Regions and/or of Europe and the regions, and then turns to examine city-regional development strategies. [ABSTRACT FROM AUTHOR]

The article discusses the 2003 Sapir Report on the entire system of European Union (EU) economic policies. Topics included are the identification of gaps in institutional and economic achievements highlighted by disparity with U.S. economic performance, the commitment to the Lisbon Agenda of building cohesive knowledge-based economies under a macroeconomic framework of economic and monetary union, and the failure to restructure the EU budget and set up a banking union like the Federal Reserve.

This article aims to analyse the European Parliament's ( EP) position in the reform of the European economic governance, in particular after the adoption of the 'six-pack,' the 'two-pack' and the 'fiscal compact.' References are made to the involvement of the EP in the decision-making process that led to the adoption of the new measures as well as to the substantive role assigned to this institution in the new regulatory framework. The article argues that the new provisions, which undermine the budgetary authority of national parliaments while, at the same time, designing a limited role for the EP-though strengthened compared to the previous version of the Stability and Growth Pact-can jeopardise the effectiveness of the landmark principle of 'no taxation without parliamentary representation' in the EU. [ABSTRACT FROM AUTHOR]

. 'Natural rate theory', the Efficient Market Hypothesis and its labour market application dominated interpretations of economic trends and policy prescriptions from the 1970s onwards, with their views of public policy and regulation as distorting otherwise well-functioning free markets. The upheaval of the current crisis is shaking these theories to the core. In this context, Schettkat examines European experience from the 1990s onwards and shows the theories to be unsubstantiated: high unemployment persisted post-recession despite structural reforms to labour market institutions, and the resumption of economic growth was hindered by then-dominant deflationary monetary and fiscal policies inspired by these theories. [ABSTRACT FROM AUTHOR]

This article examines the politics of the 2005 reform of the Stability and Growth Pact (SGP). It distinguishes between two stages in the reform process. The first stage delimited the negotiation space – confining reform into an interpretation of the formal clauses that prescribe SGP functioning – and set the reform agenda. In the second, decision-making stage, Member States engaged in high politics bargaining, more sensitive to their short-term (fiscal deficit) and long-term (fiscal sustainability) macroeconomic conditions, attempting to upload country-specific ‘expenditure exceptionalism’. The authors of this article find a crucial disjunction in some Member States between positions held across the two stages. Strategic considerations, comprising the broader constitutional/political game and the need to demonstrate national macroeconomic credibility, account for such discrepancy in the two negotiation stages. [ABSTRACT FROM AUTHOR]

This article examines the Liaisons Entre Actions de Développement de l'Economie Rurale (LEADER) program of the European Union and the rise of rural development in Spain. The progress of LEADER has allegedly been refracted through the institutional conditions of the politico-administrative system. The program has been used as a political power tool by the various levels, leading to confrontations in order to gain control over the program. Awareness and acceptance of the deeper philosophy behind LEADER has been gaining ground so that it is increasingly acknowledged as a powerful tool for the promotion of rural development in general and for the animation of local, collective action. As measured by statistics, Spain has participated enthusiastically in the program. During LEADER I, a total of 52 lags were established in Spain, with an average area of 1,575 kilometer and a density of 22.6 inhabitants per kilometer. LEADER I accounted for 16 per cent of the territory and 5 per cent of the population of Spain. During LEADER II, the number of lags rose to 132 groups, the average surface area to 1,700 kilometer and the average density to 23 inhabitants per kilometer. LEADER II areas account for 45 per cent of the Spanish territory and some 13 per cent of its population.