Rediscovering Economic Policy in Europe?

This paper, on the one side, deals with developments in economic policy as a discipline and, on the other, tries to check whether the recent pandemic has had (or could have) an influence on the direction of changes of the European Union institutional design, which was born under the influence of free-market doctrine and the Ordnungspolitik, now outdated. The provisions implemented due to the pandemic could (or could not) be a durable route for pursuing a number of targets, among which promotion of economic growth and reduction of inequality within and among European countries

Direct Payments to Provide Environmental Public Goods and Enhance Farm Incomes: Do Allocation Criteria Matter?

The Common Agricultural Policy 2023-2027 introduces a new result-oriented approach based on a new delivery model. At the core of this model lies the need to ensure a higher consistence between stated objectives and the implementation of policy tool, such a direct payment. Enhancing farm income and fostering the provision of environmental public goods represent relevant policy goals that the new basic income support for sustainability is aimed to pursue. However, the use of land-based payments has been largely criticized as ineffective and unfair. To this purpose, we use “Italian Farm Accountancy Data Network” data, in order to descriptively analyse whether and how different criteria used to allocate this payment are differently correlated with farm income distribution and the use of chemical inputs and natural resources. Findings reveal that other parameters, rather than land, may be also taken into account in order to improve the effectiveness of the basic income support for sustainability in achieving its specific goals. However, there is not a first-best solution aimed to ensure at the same time a fairer distribution of the income support, by rewarding farmers that make a lesser use of input

Here to Stay? The Return of Fiscal Policy and Challenges for the EU Governance

The reaction of European Union’s (EU) policy makers to the Covid-19 shock was bold and timely; although they could not avoid a crisis whose dimensions made the 2007- 2008 Global Financial Crisis pale by comparison, the governments’ titanic effort managed, with the support of EU institutions, to mitigate its impact on incomes and employment. This came as a welcome change after the calamitous management of the sovereign debt crisis. But it is precisely the extraordinary dimension of the crisis that prompts the question of whether the activism of economic policy denoted a change in the mindset of EU governments and institutions, or simply was the only option available to policymakers to avoid the collapse of their economies. This paper tries to answer the question through an assessment of the debate on Eurozone reform, with a focus on the “New Kid in Town”: fiscal policy

The Italian State Monopoly in Life Insurance: The Organisational and Management Model of the INA

During the first two decades of the twentieth century in Italy, in addition to the development of mutual insurance companies, the state was involved in safeguarding the interests of various social partners in expanding the concept of social security and, at the same time, increasing the importance of its central role as investor in the Italian economy. Life insurance – through the creation of a National Institute (INA) which carried out its activities in a relative monopoly regime for about a decade (1912–1923) – was the first sector in which the expansion of state intervention began. The simplicity of the organisation consisted in the way in which the INA’s insurance activity was structured, and it represented the real element of novelty. The research, largely based on documentary sources from the INA historical archive in Rome, sheds light on this particular moment in the Italian insurance and entrepreneurial history, connecting in an articulated way with the historical and economic contexts of reference: the strong political and economic implications, the legislative precedents of the project, the first economic results and the reactions – national and international – to the state monopoly

News from the Frontier: Increased Productivity Dispersion across Firms and Factor Reallocation

Analysing French firms over 1991-2016, we find first that since the beginning of the century, one or two downward significant productivity breaks have occurred in all industries, both at the frontier and for laggard firms, suggesting a decline in the contribution of technological progress to productivity growth. Second, the median labour share is always higher for the laggard firms, with no clear trend, than for the frontier firms, with a sharp decrease from the mid-1990s to 2008, and an increase from 2008 onwards. Third, factor reallocation decreased significantly in the 2000s, at the time when we observed an increase in productivity dispersion, with a growing productivity gap between frontier and laggard firms. It appears also that reallocation has been lower on average over the whole period for sectors with a high import share, which can be related to the impact of global value chains

Rationality, Information Power and Institutional Theory

The objective of this paper is to show the importance of the role played by ‘power’ in economic analysis and how this, through information asymmetry, leads to the exercise of economic power of one unit over other units. This power derives from inequality in the amount of information possessed. The problem then arises of identifying tools to reduce the asymmetric information that generates the ‘domination’ effect of one individual over another. Institutional arrangements have been identified as alternative tools to the price mechanism, in order to favour individual decisions in a scenario marked by power, information and cognitive bounds. Thus, it will be highlighted how institutions favour symmetry in the conflicting relations of economic powers, in order to counteract the formation of unbalanced relations.            

Assessing Rural Resilience for Endogenous, Sustainable Development: An Emblematic Case

Rural communities are suffering increasing pressure due to several local and global, socio-economic, environmental and institutional changes. Despite the challenges, however, the focus on rural resilience for sustainable, endogenous development is increasing drastically. We aim to understand the factors which enable rural resilience by assessing an emblematic case of two bordering, rural areas, the capacity of which for resilience is remarkably diverse. We approached the study using a qualitative methodology, based on data collection taken from interviews and focus group with an indicator framework to assess their capacity for resilience. Factors of resilience clearly emerged from the results, and consistent qualitative evidence demonstrated the relevance of rural identity

Work Flexibility and Workplace Training in Italy Before and After the Jobs Act Reform

This paper analyses the complex relationship between work flexibility strategies and workplace training at the firm level, thus filling a gap in the relative literature that only takes into account supply-side factors and fails to discriminate between on- and off- the job training. To achieve this purpose, we discuss the implications of two different theoretical frameworks grounding on human capital theory and systemic flexibility, respectively, and go on developing alternative hypotheses on the association between the presence of temporary and part-time workers at firm-level and training investments, both off-the-job and on-the-job. By using data on Italian firms, we get different results according to the type of non-standard contract and training. Part-time and temporary contracts carry out distinct functions with respect to off-the-job and on-the-job training, respectively. The former is more consistent with the human capital approach, whereas the latter is in line with the strategic management approach. These results are discussed in view of a structural labour market reform enacted by the Italian government in 2015, the so-called “Jobs Act”.

A Theory of Justice of John Rawls as Basis for European Fiscal Union

Fiscal policies coordination, macro-stability purposes and provision of European public goods are undoubtedly economic goals of paramount importance when considering the implementation of Fiscal Union at European level. However, there is also a complementary component of moral nature embedded in the constitution of any fiscal system, that is reallocation of resources. The core idea of the paper is that A Theory of Justice of John Rawls can provide a new and compelling basis accounting for the institution of European Fiscal Union in the redistributive perspective since the European Union holds a) a scheme of mutually advantageous cooperation and b) a thick network of institutions which constitute a basic structure. The main outcome of this analysis is a European difference principle. This conclusion is then followed by a corollary: if the European institutions are to be shaped to reflect an arrangement of Rawlsian nature, they should also include Fiscal Union at European level

Editorial Note

Due to the pandemic event in the 2020 only the single issue (Vol. 11; Iss. 1-2) of the Review has been published and the first issue of the 2021 (Vol. 12 Iss. 1) has been published with a delay. First, I thank the Authors of these two issues for their appreciable patient. Second, I am pleased to inform that the Vol. 11, Iss. 1-2 - 2020 of the Review of Economics and Institutions is the first valuable contribution of the renewed team of Managing Editors. Since January 2020 Simona Bigerna (University of Perugia) and Amedeo Argentiero (Kore University of Enna) have joined Paolo Polinori (University of Perugia) and Lewis S. Davis (Union College) and will serve as new Managing Editors for the incoming years. With the 2019 Fall issue Antonio Minniti (University of Bologna), Andrea Presbitero (International Monetary Fund) and Francesco Venturini (University of Perugia) have completed their office and have left the managing board. I wish to warmly thank Antonio, Andrea and Francesco for their contribution to the Journal and for the work done in these years