Reframing the EU budget- decision-making process

This paper traces the history of the EU budget and draws lessons for the review to come. Whatever reforms are proposed, the authors believe that they must serve to shift spending to policy areas and instruments where the EU can best add value while at the same time recognising the political need for member states to present EU budget negotiation results in Â?net-balanceâ?? terms. A two-stage negotiation is proposed: first member states should negotiate and agree on what constitute EU public goods. Everything else would thereafter - by default - be deemed redistributive/compensatory spending to be financed on the basis of member statesâ?? current overall net balances.

A better process for a better budget

This policy brief provides a practical solution to facilitate reform of the EU budget decision-making process, overcome the detachment of EU spending from political priorities and increase focus on EU public goods. As the negotiations for the next financial framework are expected to start in less than two years, the window of opportunity for reform is closing rapidly. Additional pressure arises from the need to design a substitute, by Spring 2010, for the Lisbon Strategy that better aligns EU policy goals and spending. For the authors now is the time for reform.

The new food equation: do EU policies add up?

This policy brief, Juan Delgado and Indhira Santos look at how EU policies should be adjusted to the higher food prices. The brief makes three policy recommendations: innovation in biofuels should be encouraged but biofuels targets should be abandoned as they are expensive and distort agricultural and energy markets. Freer trade is needed for both efficiency and food security reasons. But more open markets will further increase the price of food for importing countries. An immediate and sustained aid increase should therefore be agreed.

EU Cohesion policy: some fundamental questions

Indhira Santos analyses the impact of the European Unionâ??s cohesion policy both in terms of economic efficiency and redistribution to needy areas of the EU. She illustrates with data the confusion created by the multiple objectives of current EU cohesion policy and by the political horse-trading over levels of aid granted to different member states and regions. Finally, sh shows how a significant part of EU structural funds involves Â? ine net economic terms Â? simply transferring funds between individuals within one and the same region.

Do Natural Disasters Affect Human Capital? An Assessment Based on Existing Empirical Evidence

The last few years have seen a notable increase in the number of studies investigating the causes and effects of natural disasters in many dimensions. This paper seeks to review and assess available empirical evidence on the ex-post microeconomic effects of natural disasters on the accumulation of human capital, focusing on consumption, nutrition, education and health, including mental health. Three major findings come forward from this work. First, disasters appear to bring substantial damages to human capital, including death and destruction, and produce deleterious consequences on nutrition, education, health and many income-generating processes. Furthermore, some of these detrimental effects are both large and long-lasting. Second, there is a large degree of heterogeneity in the size – but not much in the direction – of the impacts on different socioeconomic groups. Yet, an empirical regularity across natural hazards is that the poorest carry the heaviest burden of the effects of disasters across different determinants and outcomes of human capital. Finally, although the occurrence of natural hazards is mostly out of control of authorities, there still is a significant room for policy action to minimize their impacts on the accumulation of human capital. We highlight the importance of flexible safety nets as well as the double critical role of accurate and reliable information to monitor risks and vulnerabilities, and identify the impacts and responses of households once they are hit by a disaster. The paper also lays out existing knowledge gaps, particularly in regard to the need of improving our understanding of the impacts of disasters on health outcomes, the mechanisms of transmission and the persistence of the effects in the long-run.natural disasters, human capital accumulation

How do the poor cope with shocks in Bangladesh ? evidence from survey data

This paper uses household survey data collected in September-October 2009 on a nationally representative sample of 2,000 households in Bangladesh to examine the nature of shocks experienced by households over the preceding 12 months and the type of coping mechanisms that were adopted. The analysis finds that more than half the sample claimed to have faced a shock -- economic, health, climatic, or asset related -- over the previous year. Surprisingly, the non-poor face a larger share of these shocks compared with the poor. A closer look at this result shows that the non-poor report a significantly larger share of"asset-related"shocks, which is consistent with the fact that the poor have fewer assets to lose. Health-related shocks dominate and households appear to have coped with these shocks through savings and loans, help from friends, and depletion of assets. The results show that households, when faced with covariate shocks due to climatic reasons, are less able to cope. As would be expected, the poor are less able to cope with shocks compared with the non-poor; the poor are more likely to use coping mechanisms that could have negative welfare implications in the longer term, including the depletion of assets, reduction of essential consumption, and use of high-interest loans. Econometric analysis suggests that geographical location, socio-economic status, and access to microfinance all affect the ability to cope with shocks. Policy implications include the importance of developing safety nets that take into account the vulnerability to climate-related shocks and further developing the links between micro-finance and safety net programs.Access to Finance,Safety Nets and Transfers,Rural Poverty Reduction,Small Area Estimation Poverty Mapping,Housing&Human Habitats

Memos to the new Commission- Europe's economic priorities 2010-2015

These Memos, addressed to the next Commission President and to the new European commissioners, are written by Bruegel Scholars and edited by Senior Research Fellow André Sapir and focus on key economic aspects of EU policy-making. The new Commission will enter office at a challenging time for Europe, the EU and the Commission itself. The crisis has clearly exposed weaknesses in EU governance which need to be addressed and the memos make a number of concrete recommendations of relevance for major economic fields, as well as for the EU and Commission as a whole. Addressing the next Commission President, André Sapir and Jean Pisani-Ferry propose that effective leadership will be necessary to give strategic direction to the Commission, "you [the president] should therefore be ready to fight for ideas and take risks" (JPF-AS). The Memos suggest that the EU will need to assert a position on commonly agreed rules, propose new solutions and, importantly, has an opportunity now to redefine the European narrative in the global arena. Focusing on the most important economic questions at EU level, the Bruegel memos are intended to be strategic, outlining the state of affairs that will be met by the new Commission and the key challenges and priorities they will need to consider over the next five years.

Can grit be taught? Lessons from a nationwide field experiment with middle-school students

We study whether a particular socio-emotional skill - grit (the ability to sustain effort and interest towards long-term goals) - can be cultivated through a large-scale program, and how this affects student learning. Using a randomized control trial, we evaluate the first nationwide implementation of a low-cost intervention designed to foster grit and self-regulation among sixth and seventh-grade students in primary schools in North Macedonia (about 33,000 students across 350 schools). The results of this interventions are mixed. Exposed students report improvements in self-regulation, in particular the perseverance-of-effort facet of grit, relative to students in a control condition. Impacts on students are larger when both students and teachers are exposed to the curriculum than when only students are treated. For disadvantaged students, we also find positive impacts on grade point averages, with gains of up to 28 percent of a standard deviation one-year post-treatment. However, while this intervention made students more perseverant and industrious, it reduced the consistency-of-interest facet of grit. This means that exposed students are less able to maintain consistent interests for long periods

Is Structural Spending on a Solid Foundation? Bruegel Policy Brief 2008/02, February 2008

Summary. The European Union’s budget review, launched last year, is an opportunity critically to examine EU policies and instruments. Structural Funds are at the heart of the EU cohesion effort, and absorb almost one third of the EU’s budget. Their declared aims are economic growth and regional convergence, but these goals do not always complement each other. Allocation of Structural Funds is not efficient from a pure growth standpoint and, although with enlargement cross-country transfers have increased significantly, on average almost twice as much redistribution still occurs within regions as opposed to between regions

A better process for a better budget. Bruegel Policy Brief 2009/04, July 2009

European Union budget negotiations often focus on member states' financial net balances, rather than on spending with EU-level added value. But net positions are an unreliable guide to sound EU policy. Changing the budget process is a precondition for any significant reform; the stubborn link between net balances and spending decisions will not be broken until the decision-making procedure changes. This will improve the quality of EU budget spending