WP Title: 1. The impact of integration on regional growth and cohesion
Objectives: WP1 examines the evolution of the various types of trade relations at the national (EU-28) and regional (NUTS2) level and their impact on regional growth and within-country regional inequalities. Inter-industry is compared to intra-industry and the various types of trade integration (horizontal or vertical) will be modeled to evaluate the heterogeneous effects from exposure to trade partners of different income levels, the sectoral composition and technology levels. In addition, trade specializations will be compared to productive specializations, at the national and regional level in order to detect spatial or sectoral variations in the growth impact under different trade partnerships (core-core, core-periphery, periphery-periphery).
Description of Work: Theoretical development and estimation of a panel spatial econometric model that will provide policy-relevant estimations of the sensitivity of regional and national growth (and the sensitivity of the development gaps existing in the EU) to alternative trade regimes.
Tasks: Data collection, development of methodology, background contextual analysis, extensive literature review, descriptive statistics, econometric analysis and production of results and major research findings.
Deliverables: Scientific Report, Thematic maps, Academic paper for submission to peer-reviewed journal, participation in conference(s).
Milestones: Development of regional and national databases, Publication of WP1 report, Conference presentation, Submission of corresponding academic paper to journal.
WP Title: 2. Detecting the sources and drivers of political discontent
Objectives: WP2 explores the forms of expression, the intensity and geography of political discontent in its cultural, institutional and historical context. It detects the sources of discontent and examines its relation to the economic realities and the unfulfilled expectations of people and places, but also to policy choices and perceived or real threats to their welfare.
Description of Work: The expressions of discontent will be measured by Eurobarometer surveys at the national and regional level, EU parliamentary or national elections, polls, acts of protests and any form of political tensions that are measured by indices of political tension and conflict. The relation of discontent to regional inequalities, social inequalities, economic performance, expectations, perceptions and policies will be formulated theoretically and tested empirically with the use of a spatial/panel econometric model that will provide policy-relevant estimations of the sensitivity of discontent to economic and social conditions in the regions.
Tasks: Data collection, development of methodology, background contextual analysis, extensive literature review, descriptive statistics, econometric analysis and production of results and major research findings.
Deliverables: Scientific Report, Thematic maps for cross-country comparisons, Academic paper for submission to international peer-reviewed journal, presentation in conference.
Milestones: WP2 Report, Presentation to conference, Submission of academic paper to journal.
WP Title: 3. EU Policy: an endogenous variable or an axiomatic doctrines
Objectives: WP3 examines the evolution of the major EU and national policies, the extent of changes in priorities and the way the EU, but also the Member States deal over time with the efficiency-equity dilemma. Particular emphasis will be given in the analysis of the degrees of freedom of economic policy under different conditionalities and institutional arrangements and its sensitivity and responsiveness to economic and political changes.
Description of Work: The aim of this WP is to detect the extent to which EU and national policy is endogenously determined, which means it is responsive to economic or political conditions, or whether it is exogenously determined by economic doctrines or axiomatic perceptions. The responsiveness of policy to internal and external economic and social conditions will be estimated empirically with the use of a spatial/panel econometric model that will provide policy-relevant estimations of the sensitivity of national and EU policy to the other critical variables of the analysis.
Tasks: Data collection, theoretical development of models, background contextual analysis, extensive literature review, descriptive statistics, econometric analysis and production of results and major research findings.
Deliverables: Scientific Report, Academic paper for submission to international peer-reviewed journal, participation in conference(s).
Milestones: Stock-taking of existing policies across the EU, WP3 Report, Presentation to conference, Submission of academic paper to journal.
WP Title: 4. A generalized model of growth, integration, cohesion, discontent and endogenous policy
Objectives: WP4 integrates the methodology of the previous WPs and the different strands of literature (inequality and growth, integration, discontent, policy) into a generalized model consisting of a system of equations. The model takes explicitly into consideration the interaction of the main variables and estimates with the use of reduced form equations and instrumental variables to assess the impact of alternative policy options on growth and inequality, taking into consideration interactions and interdependencies with the international (integration) and the political (discontent) environment. At the same time it will test for policy endogeneity and will estimate the sensitivity to inequality and discontent in a way that accounts for interactions and other inter-dependencies.
Description of Work: The main deliverable will be the estimation of a set of econometric models which will test a number of hypotheses for the endogenous determination of critical variables and will provide a significant contribution to our understanding of economic and political processes, interactions and dynamics in the EU. Its results will provide significant policy recommendations that will take into consideration for the first time the complexity of interactions between the economic and the political sphere in the diverse European space. The estimated model will be used to examine the impact on growth, inequalities and cohesion of a number of alternative policy options.
Tasks: Data collection, development of methodology, background contextual analysis, extensive literature review, descriptive statistics, development of econometric models and production of results and major research findings.
Deliverables: Scientific Report, Academic paper for submission to international peer-reviewed journal, Presentation in conference.
Milestones: Set up of econometric model, WP3 Report, Submission of academic paper to journal.
WP Title: 5. Case study of Greece: Weak growth performance, regional inequalities, unbalanced integration and political discontent
Objectives: WP5 applies the generalized model of WP4 in Greece, a country that has experienced over the last two decades a severe economic crisis, high and persistent regional inequalities, rising discontent and an uneven pattern of integration driven by unbalanced and structurally unfavorable trade relations.
Description of Work: This WP will conduct extensive analysis of the trade landscape in Greece before and after Eurozone accession and detect the interaction between the unbalanced type of integration with the EU and the performance of the regional economies, the level and evolution of regional inequalities and the rise of discontent. For the assessment of the trade-growth nexus, a novel, detailed, product-level trade dataset will be employed to detect the uneven growth returns from trade and the links to the geography of discontent. We expect that the study of Greece has a high degree of relevance for informing policies for other peripheral countries of the EU South as well as candidate member states in pre-accession phases.
Tasks: Data collection, development of methodology, background contextual analysis, extensive literature review, descriptive statistics, econometric analysis and production of results and major research findings.
Deliverables: Scientific Report, Academic paper for submission to international peer-reviewed journal, Presentation in conference.
Milestones: Development of the regional trade-growth database, establish methodological strategy, WP4 Report, Submission of academic paper to journal.