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Persistent Productivity Failure in the UK: Is the EU Really to Blame?

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  • Nicholas Crafts

Abstract

On average, UK productivity performance in the decades leading up to the financial crisis was quite disappointing. Joining the EU was not to blame. Indeed, EU membership, which was an integral part of the Thatcher reform programme, had a significant positive impact. Over the long run, UK supply-side policies have been badly designed in various different ways. These design faults have not been the result of constraints imposed by EU membership but rather the consequence of domestic government failure. There is no reason to think that EU exit will lead, either directly or indirectly, to improvements in UK productivity outcomes.

Suggested Citation

  • Nicholas Crafts, 2019. "Persistent Productivity Failure in the UK: Is the EU Really to Blame?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 247(1), pages 10-18, February.
  • Handle: RePEc:sae:niesru:v:247:y:2019:i:1:p:r10-r18
    DOI: 10.1177/002795011924700111
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    References listed on IDEAS

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    1. Crafts, Nicholas, 2015. "UK Economic Growth since 2010: Is it as Bad as it Seems?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 231, pages 17-29, February.
    2. Harald Badinger, 2005. "Growth Effects of Economic Integration: Evidence from the EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 50-78, April.
    3. Alberto Heimler & Frédéric Jenny, 2012. "The limitations of European Union control of state aid," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(2), pages 347-367, SUMMER.
    4. Paul C. Cheshire & Christian A. L. Hilber, 2008. "Office Space Supply Restrictions in Britain: The Political Economy of Market Revenge," Economic Journal, Royal Economic Society, vol. 118(529), pages 185-221, June.
    5. Scott L. Baier & Jeffrey H. Bergstrand & Peter Egger & Patrick A. McLaughlin, 2008. "Do Economic Integration Agreements Actually Work? Issues in Understanding the Causes and Consequences of the Growth of Regionalism," The World Economy, Wiley Blackwell, vol. 31(4), pages 461-497, April.
    6. Crafts, Nicholas, 2012. "British relative economic decline revisited: The role of competition," Explorations in Economic History, Elsevier, vol. 49(1), pages 17-29.
    7. Nicholas Crafts, 2018. "The productivity slowdown: is it the ‘new normal’?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 34(3), pages 443-460.
    8. Peter J. Buckley & Frances Ruane, 2010. "Foreign Direct Investment in Ireland: Policy Implications for Emerging Economies," Palgrave Macmillan Books, in: Foreign Direct Investment, China and the World Economy, chapter 16, pages 365-385, Palgrave Macmillan.
    9. Crafts, Nicholas, 2016. "The Growth Effects of EU Membership for the UK: a Review of the Evidence," CAGE Online Working Paper Series 280, Competitive Advantage in the Global Economy (CAGE).
    10. Thom, Rodney & Walsh, Brendan, 2002. "The effect of a currency union on trade: Lessons from the Irish experience," European Economic Review, Elsevier, vol. 46(6), pages 1111-1123, June.
    11. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, December.
    12. Nickell, Stephen & Nicolitsas, Daphne & Dryden, Neil, 1997. "What makes firms perform well?," European Economic Review, Elsevier, vol. 41(3-5), pages 783-796, April.
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    Cited by:

    1. Gerth, Florian & Briggs, Chad M. & Diaz, John Francis T., 2024. "Exit and Entry Dynamics of UK Firms in the Wake of the Global Financial Crisis," MPRA Paper 123325, University Library of Munich, Germany, revised Jan 2025.

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    Keywords

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    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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