Political Economy

What the European Commission missed in its reflection paper

The European Commission’s recent reflection paper on deepening economic and monetary union raises several key questions about the past and future of the Eurozone. The paper certainly represents a positive contribution to the ongoing process of European integration, after the impasse caused by the deep and prolonged economic crisis, the political developments in some European countries (including the Brexit referendum) and […]

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    The Conservative Manifesto: A hallucinatory celebration of the state

The Conservative Manifesto: A hallucinatory celebration of the state

“We need a state that is strong and strategic, nimble and responsive to the needs of people”. (p.8)

The 2017 Conservative Manifesto speaks highly of the state, and it speaks highly of the market. But even by the standards of enthusiasm in a political manifesto, this text operates in a fiction of archetypes. The juxtaposition of the manifesto’s celebration of […]

Curtailing the market for private prisons: schism or blip?

For nearly 25 years, new prisons built in the UK have predominantly been procured through ‘design, build, finance and operate’ (DBFO) contracts with the private sector. So the opening earlier this year of a new supersized prison to be financed and operated by the public sector – HMP Berwyn in north Wales – puts the future of ‘whole prison’ contracting in […]

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    The state, inequality and the politics of economic ideas: three blind spots in shadow banking

The state, inequality and the politics of economic ideas: three blind spots in shadow banking

Shadow banking has become a systemic pillar of global finance. A typical map shows a complex network of shadow entities such as highly levered off-balance-sheet vehicles, broker-dealers, private equity firms, money market funds or hedge funds. Yet (large) regulated banks also moved in the shadows, driven by a combination of yield, regulatory and tax arbitrage in order to engage […]

Gender quotas and the crisis of the mediocre man

A common criticism against gender quotas is that they are anathema to meritocratic principles. This research on Sweden shows that the opposite can be true: Quotas actually increased the competence of politicians by leading to the displacement of mediocre men whether as candidates or leaders. The results may also be relevant for judging gender quotas in business.

More than 100 countries […]

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    When board interlock fell apart, so did political moderation in the boardroom

When board interlock fell apart, so did political moderation in the boardroom

Throughout the twentieth century, business elites in the United States were bound together by a dense interlock network — a network of directors connected by serving on the same corporate boards, and of boards connected by shared directors. A few dozen directors served on five or more boards, and this inner circle kept the informational pathways among corporations short. […]

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    The biggest casualty of Trump’s Mexican import tax would be ordinary Americans

The biggest casualty of Trump’s Mexican import tax would be ordinary Americans

When Donald Trump first proposed building a wall along the Mexican border, it was derided by many observers as a cheap campaign trick. If Trump did make it to the White House, the argument went, he would quickly realize that a wall spanning the Mexican border would be both impractical and prohibitively expensive.

But just days into his presidency, the […]

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    Despite Brexit and Trump, London and NY will keep attracting real estate investors

Despite Brexit and Trump, London and NY will keep attracting real estate investors

Image by -JvL-, under a CC-BY-2.0 licence
The transnational wealth elite are a group of people who individually come from one place, but invest their wealth transnationally since they entertain transnational jobs, assets and social networks. Although these elites appear to have a geographically diverse investment portfolio, they do not invest everywhere. Indeed, their real estate investment takes place primarily in first-tier global […]

Who are the discontents of globalisation?

JPMorgan London, by Håkan Dahlström, under a CC-BY-2.0 licence
The past months have been characterised by what can be called a “backlash against globalisation”. This development became most visible in the outcome of the Brexit referendum in the UK and the election of Donald Trump as the future president of the US. In both cases, the preceding campaigns massively referred to […]

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    The EU must break with neo-liberalism and address the discontents of globalisation

The EU must break with neo-liberalism and address the discontents of globalisation

Edinburgh anti-globalisation protests, by Sam Fentress, under a CC-BY-SA-2.0 licence
How should the European Union react to the decision of the British people to withdraw from the union? This is the question that has been at the centre of the political debate in Europe since the Brexit vote. Paul De Grauwe outlines a future scenario in which the EU could succeed after Brexit. He contends the […]

How far should we push globalisation?

Photo by Fabian Mohr (CC-BY-SA-2.0)
The recent discussions about CETA, the trade agreement between Canada and the European Union, focused almost exclusively on two questions. They are important but certainly not the most fundamental ones. In this article I first discuss these two questions and then turn to the more fundamental question of how far we should push globalisation.

The first question […]

Gastro-nationalism is rising across Europe

Photo by epSos.de, under a CC BY 2.0 licence, via Wikimedia Commons
Anyone who has gone shopping for groceries recently may have been struck by what seems to be a new trend: the increasing desire of food producers to indicate their country of origin when packaging their products. It is a phenomenon that is particularly prevalent in the dairy aisle, where […]

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    Foreign investment in critical areas like nuclear power need a formal vetting process

Foreign investment in critical areas like nuclear power need a formal vetting process

Hinkley Point A power station, by Rick Crowley, under a CC BY-SA 2.0 licence
One of the first decisions taken by Theresa May as prime minister was to delay deciding on the £18 billion Hinkley Point nuclear power project. Because it was a centrepiece project as part of former chancellor George Osborne’s “Golden Age” of closer bilateral ties with China, the […]

Why the future of the euro remains uncertain

Safety net, by /\ \/\/ /\, under a CC-BY-SA-2.0 licence
The Euro crisis, which first peaked in 2010 and continues to haunt the Eurozone today, has been the most serious economic crisis in the history of the European Union. In fact, taken together, the global financial crisis and the Eurozone crisis have by now caused more lasting economic damage in parts […]

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    Network analysis shows offshore finance as a complex network of ownership ties

Network analysis shows offshore finance as a complex network of ownership ties

The EU made a move in August to force Apple to pay €13 billion in unpaid taxes. The episode has quickly become emblematic of the EU’s fight against corporate tax avoidance, a dispute which intensified in the aftermath of the 2009 financial crisis. As Europeans see it, this is about the need to provide a level playing field between […]

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    What Brexit advocates could learn from the Greek bailout referendum

What Brexit advocates could learn from the Greek bailout referendum

We are living in a new political climate in which key decisions are made on emotions, not facts; elites are distrusted to the point of identifying a conspiracy against the popular will; and leaders are seen as making gross miscalculations in their national strategies. The ‘people’ know better: they seek new leaders who acknowledge their innate good sense and […]

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    Immigrants could well be Denmark’s new disruptive innovators

Immigrants could well be Denmark’s new disruptive innovators

Recently, I had the honour to analyse the challenge of immigration and refugees at the Danish National Association of Economists and Lawyers (Djøf). For quite some time there has been a political debate on what to do with immigration and refugees both in Denmark and Europe. What should we do with them? Let them in? Not let them in? […]

Both sides of the UK debate are misleading the public

Claims and counter-claims about how much it costs the UK to belong to the European Union abound. Unsurprisingly, both sides of the debate cherry-pick the statistics that support their side of the argument, but both are also prone to misrepresent the facts and to neglect data that tell a different story.

Part of the explanation for this confusion is that […]

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    The OECD and the lost battle to impose sanctions on tax havens

The OECD and the lost battle to impose sanctions on tax havens

David Cameron, the European Commission and the OECD have all promised to get tough on tax avoidance in response to the Panama Papers leak. Any measures they take will be part of an international political process begun almost 20 years ago at the OECD, the organisation charged by the G8 and more recently the G20 to develop international standards […]

India is getting a raw deal on the EU-India Trade Agreement

As India’s Prime Minister Narendra Modi headed to Brussels on 30 March for the EU-India summit, the speculations were that the meeting would renew the talks on the stalled EU-India broad-based trade and investment agreement (BTIA). The European Union is India’s biggest trade and investment partner, and the trade agreement can in principle be a great boost to the Indian economy. But […]