Fiscal austerity and public investment: Is the possible the enemy of the necessary?

In most rich democracies one finds a tendency for the share in public finance that is available for discretionary spending to shrink. This is because tax revenues do not keep pace with simultaneous increases in fixed expenditures and growing pressures for fiscal consolidation. The present paper assesses the capacity of governments under conditions of fiscal austerity to shift financial resources within the shrinking share of discretionary expenditure from old to new purposes, and thereby fund future-oriented investment aimed at making societies more equitable and efficient. For this reason an indicator for soft public investment is developed, which includes public spending on education, R&D, family support, and active labor market policy. We present data for Germany, Sweden, and the United States for the years 1981 to 2007 in order to explore the general dynamics of consolidation policies under the expectation that far more ambitious consolidation attempts will be made in the coming decade. Our results suggest that the capacity of governments to shift resources towards soft public investment decreases as pressures for fiscal consolidation increase. -- In den meisten reichen Demokratien lässt sich die Tendenz ausmachen, dass der Anteil diskretionärer Ausgaben an den öffentlichen Haushalten zurückgeht. Ursächlich dafür ist, dass die Steuereinnahmen nicht hoch genug sind, um die parallele Zunahme gebundener Ausgaben sowie den gestiegenen Konsolidierungsdruck auffangen zu können. Das Papier untersucht, inwiefern Regierungen unter den Bedingungen fiskalischer Austerität in der Lage sind, finanzielle Mittel innerhalb des diskretionären Ausgabenanteils von alten zu neuen Aufgaben zu verschieben. Dies betrifft insbesondere die Finanzierung zukunftsorientierter Investitionen, die darauf abzielen, Gesellschaften gerechter und effizienter zu gestalten. Zu diesem Zweck wird ein Indikator für 'weiche' öffentliche Investitionen entworfen, der Ausgaben für Bildung, Forschung und Entwicklung, Familienunterstützung und aktive Arbeitsmarktpolitik enthält. Angesichts der Erwartung weit ambitionierterer Konsolidierungsversuche im kommenden Jahrzehnt werden auf der Basis von Daten für Deutschland, Schweden und den Vereinigten Staaten für die Jahre 1981 bis 2007 allgemeine Dynamiken der Konsolidierungspolitik herausgearbeitet. Die Ergebnisse weisen darauf hin, dass die Fähigkeit von Regierungen, mehr Ressourcen für 'weiche' Investitionen bereitzustellen, in dem Maße abnimmt, wie der Konsolidierungsdruck zunimmt.

Évaluation financière par la méthode multicritère GAIA : application au secteur de l’assurance en Belgique

Cet article est consacré à l’évaluation financière du secteur de l’assurance en Belgique. Les différents aspects (structure, solvabilité, rentabilités globale, technique et financière, productivité) de 75 compagnies d’assurance sont étudiés au moyen de différents ratios.La méthode d’aide à la décision multicritère GAIA est présentée brièvement. Son utilisation permet de synthétiser l’information disponible et de représenter graphiquement le paysage de l’assurance en Belgique. L’accent est mis sur les apports spécifiques de la méthode GAIA, et sur les conclusions de son application particulière dans le secteur de l’assurance en Belgique.This paper deals with the financial evaluation of the Belgian insurance sector. The different characteristics (including structure, solvency, efficiency, global, technical and financial profitabilities) of 75 insurance companies are analysed using appropriate ratios.The GAIA multicriteria decision aid method is first described. Its use allows to synthetize the available information and to graphically display a picture of the Belgian insurance sector. The specific advantages of the GAIA method are emphasized, as well as the conclusions of its application in the Belgian insurance sector

Market-based but state-led: The role of public development banks in shaping market-based finance in the European Union

This paper examines the European Union’s strategy of governing the economy through financial markets by focusing on the largely unacknowledged role of public development banks, including the multilateral European Investment Bank. It argues that these state-owned financial institutions have moved into a key position in the recent evolution of the European financial system and economic governance. Since the crisis, policy makers have used them to address the intrinsic volatility and excess liquidity of contemporary financial markets, as well as offset the constraints on public investment imposed by institutionalized fiscal austerity. The paper provides evidence for this claim through an analysis of the emergent policy nexus between the Investment Plan for Europe and the Action Plan on Building a Capital Markets Union. Based on official documents and interview data, it specifically traces the risk-sharing devices for small- and medium-sized enterprise and infrastructure finance set up by development banks within these initiatives. Equipped with public guarantees, they have been instrumental for the promotion of securitization markets and public–private partnerships through increased multilevel collaborations among development banks. The anchor role of such quasi-fiscal state actors in shaping capital markets, the paper concludes, has profound political implications, and therefore warrants further scholarly attention

The European Investment Bank is becoming increasingly politicised

Over the past two decades, the European Investment Bank (EIB) has become the world’s largest multilateral financial institution. In 1999, the EU member states’ ‘policy-driven’ bank counted around 1,000 staff members. This number is now close to 3,000. In 1999, the EIB’s balance sheet stood at 200 billion euros. It now stands at 550 billion euros. While this has given the bank an enormous push in its organisational capabilities, it has also come with higher visibility, calls for transparency and accountability, and mounting political tensions. This process of politicisation is characteristic for the post-crisis evolution of the European Union, and apparently does not stop at the European Commission’s door or the European Central Bank (ECB). Three recent episodes in particular highlight why more attention should be focused on the EIB

Building a hidden investment state? The European Investment Bank, national development banks and European economic governance

The European Commission’s Investment Plan for Europe and the enduring economic crisis has brought state-owned development banks again to the fore of public and scholarly debate in Europe. This article proposes to place these banks’ activities and recent institutional co-operation in the context of European integration and assumes a historical perspective on European economic governance and development banking. Most importantly, it argues that the European Investment Bank has become a centre of gravity in long-standing political attempts to increase the investment firepower of the European Union. Based on detailed process-tracing analysis through publicly available data and interview material, the article delineates a gradual process of institutional innovation and network formation that advanced since the late 1980s and culminated in recent post-crisis policy processes. The contemporary visibility of development banking in Europe, we conclude, follows from these and is representative of a nucleus for a – somewhat hidden – European investment state, whose reach and stability, however, is yet to be determined

Writing the Literature Review

The purpose of this book is to help you write your next literature review. This is true whether you are crafting one for an undergraduate midterm paper, a doctoral dissertation, or working on your first manuscript for a peer review publication. For years, as professors we have read the best and worst of what students have written in our classes. We have witnessed in a handful of instances, undergraduate writers write more masterfully than doctoral students. We have witnessed doctoral students write first year papers which were ready for publication. And of course, the opposite is true. This begs, the question - what makes a student a good writing. Our hope is to answer that question in our textbook designed for you the student. Good writing comes down to practice, but having a guiding framework will be helpful as you begin your next paper. This book serves as a guide for how literature reviews are written in upper-level business courses, but the core advice and direction applies to most other disciplines. We organize the book into several sections designed to walk with you every step of the way as you write your next literature review. Importantly, we begin by describing the purpose of the literature review, and provide its use in the greater historical context of the scientific process. Second, we provide a guide on how to conduct the literature review itself, followed by detailed dissections of two types of literature reviews. Finally, we close with how to improve your command of academic writing and practical tips on how to evolve into a more complete writer.https://scholars.fhsu.edu/all_oer/1007/thumbnail.jp

U.S. Economic Activity During the Early Weeks of the SARS-Cov-2 Outbreak

This paper describes a weekly economic index (WEI) developed to track the rapid economic developments associated with the response to the novel Coronavirus in the United States. The WEI shows a strong and sudden decline in economic activity starting in the week ending March 21, 2020. In the most recent week ending April 4, the WEI indicates economic activity has fallen further to -8.89% scaled to 4-quarter growth in GDP

U.S. Economic Activity during the Early Weeks of the SARS-Cov-2 Outbreak

This paper describes a weekly economic index (WEI) developed to track the rapid economic developments associated with the response to the novel Coronavirus in the United States. The WEI index shows a strong and sudden decline in economic activity starting in the week ending March 21, 2020. In the most recent week ending March 28, the WEI indicates economic activity has fallen further to -6.19% scaled to 4 quarter growth in GDP

Enrichissez-vous! Sandy Brian Hager über den Zusammenhang von Ungleichheit, Macht und öffentlicher Verschuldung

Sandy Brian Hager: Public Debt, Inequality and Power: The Making of a Modern Debt State. California: University of California Press 2016. 978-0-52028-466-

COVID-19 and the Mobilisation of Public Development Banks in the EU

Introduction: The debate over how Europe should organise solidarity and jointly respond to the COVID induced economic crisis is in full force, with various proposals either agreed or at debate such as the use of the European Stability Mechanism (ESM), the creation of new common debt instruments or the mobilisation of the upcoming Multi-Annual Financial Framework (MFF). So far, however, the prime responses to the economic shock have been located at the national level, not only being proof of the fact that most firefighting is done at the level of Europe’s nation-states but also displaying the inequalities of fiscal capacity that still loom large in the EU’s political economy. There have been various studies and reports comparing governments’ initial fiscal responses to the COVID-19 crisis1. While there are differences in the size and composition of fiscal packages, a common feature that emerges is the strong reliance on credit guarantees and other liquidity support measures. Less appreciated in current debates is the fact that these measures are often administered and distributed by a specific sort of para-fiscal actors: development banks, or national promotional institutions. Even at the European level, significant parts of the common response to the economic impact of the pandemic rest on the European Investment Bank (EIB). This policy brief highlights the key role these para-fiscal institutions play in Europe and reviews the similarities and differences in their responses by focusing on five large institutions (EIB, KfW, Bpifrance, CDP, ICO)2. It explains how these entities have worked as governments’ 'little helpers' in the European context of the past decade and points to key challenges that come with their role in terms of a coordinated and solidarity-based European effort