The three tier strategy followed by successful European countries in the 1990s
AbstractIn general, the economic performance of European countries was disappointing in the 1990s. However, country differences increased, and in some European countries economic growth matched US rates. This paper uses a set of performance indicators to carve out a group of successful European countries and to compare their economic strategies to those of the more poorly performing, big continental economies. The analysis shows that the successful countries implemented a policy mixture of cost cutting, improving institutions, and investing in future growth. We consider the first two strategy elements to be preconditions, while investment in growth drivers such as research, education and technology diffusion is the sufficient condition for long-run growth. The difference between top and low performers is larger with respect to the dynamics of future investment than in cost cutting. In research expenditures, the top countries surpassed the big continental European countries in 1987, and have been increasing their lead steadily since that time. They are welfare states with a comprehensive social net, which they have maintained in principle, while improving institutions and incentive structures. The results are not in line with the usual twin hypotheses that high welfare costs and insufficient labour market flexibility are the main culprits in European underperformance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Review of Applied Economics.
Volume (Year): 18 (2004)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.tandfonline.com/CIRA20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John P Martin, 1998.
"What Works Among Active Labour Market Policies: Evidence from OECD Countries' Experiences,"
RBA Annual Conference Volume,
in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market
Reserve Bank of Australia.
- John P. Martin, 1998. "What Works Among Active Labour Market Policies: Evidence From OECD Countries' Experiences," OECD Labour Market and Social Policy Occasional Papers 35, OECD Publishing.
- Giuseppe Nicoletti & Stefano Scarpetta, 2003.
"Regulation, Productivity and Growth: OECD Evidence,"
OECD Economics Department Working Papers
347, OECD Publishing.
- Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, productivity and growth: OECD evidence," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 18(36), pages 9-72, 04.
- Nicoletti, Giuseppe & Scarpetta, Stefano, 2003. "Regulation, productivity, and growth : OECD evidence," Policy Research Working Paper Series 2944, The World Bank.
- Freeman, Richard B., 1998. "War of the models: Which labour market institutions for the 21st century?1," Labour Economics, Elsevier, vol. 5(1), pages 1-24, March.
- Karl Aiginger, 2004. "The Economic Agenda: a View from Europe," Review of International Economics, Wiley Blackwell, vol. 12(2), pages 187-206, 05.
- Gordon, Robert J, 2004.
"Two Centuries of Economic Growth: Europe Chasing the American Frontier,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
4415, C.E.P.R. Discussion Papers.
- Robert J. Gordon, 2004. "Two Centuries of Economic Growth: Europe Chasing the American Frontier," NBER Working Papers 10662, National Bureau of Economic Research, Inc.
- Andrea Bassanini & Stefano Scarpetta & Philip Hemmings, 2001. "Economic Growth: The Role of Policies and Institutions: Panel Data. Evidence from OECD Countries," OECD Economics Department Working Papers 283, OECD Publishing.
- Pajarinen, Mika & Rouvinen, Petri & YlÃ¤-Anttila, Pekka, . "Small Country Strategies in Global Competition. Benchmarking the Finnish Case," ETLA B, The Research Institute of the Finnish Economy, The Research Institute of the Finnish Economy, number 144, Spring.
- Karl Aiginger & Michael Landesmann, 2002. "Competitive Economic Performance: The European View," WIFO Working Papers, WIFO 179, WIFO.
- Stefano Scarpetta & Andrea Bassanini & Dirk Pilat & Paul Schreyer, 2000. "Economic Growth in the OECD Area: Recent Trends at the Aggregate and Sectoral Level," OECD Economics Department Working Papers 248, OECD Publishing.
- Ali-YrkkÃ¶, Jyrki & Hermans, Raine, 2002. "Nokia in the Finnish Innovation System," Discussion Papers, The Research Institute of the Finnish Economy 811, The Research Institute of the Finnish Economy.
- Aiginger, K, 2004. "The Bumpy Road of Convergence: the Catching Up Experience in Portugal, Spain and Greece," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 22, pages 1-22, Diciembre.
- Karl Aiginger, 2007. "The Swedish Economic Model," WIFO Working Papers, WIFO 302, WIFO.
- Fritz Breuss, 2005. "Die Zukunft der Lissabon-Strategie," WIFO Working Papers, WIFO 244, WIFO.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.