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Structural Reforms and the Benefits of the Enlarged EU Internal Market: Much Achieved and Much to Do

Author

Listed:
  • Jens Arnold

    (OECD)

  • Peter Hoeller

    (OECD)

  • Margaret Morgan

    (OECD)

  • Andreas Wörgötter

    (OECD)

Abstract

High expectations surrounded the two waves of eastward EU enlargement in 2004 and 2007, with the extension of the EU Internal Market being expected to deliver a substantial boost to economic growth in new and old member States alike. Indeed, considerable progress has been made, with existing evidence pointing to increased trade and FDI flows, enhanced east-west migration and a more stable macroeconomic environment. However, completion of the internal market is progressing at an uneven pace, and comparatively less progress can be seen in services industries, which provide over two-thirds of jobs and value added in the economy. Empirical estimates suggest that competition and trade-enhancing reforms in services industries could generate substantial productivity improvements across EU member economies. Over a period of 10 years, the predicted increase in labour productivity resulting from a bold reform package is around 10% for the average EU country, and new member States stand to gain even more. In addition to service-sector reform, priorities towards a more integrated EU internal market should include removing remaining barriers to labour mobility, improving transport infrastructure, mutual recognition of qualifications, and enhanced market integration of network industries. Finally, a more explicit use of benchmarking may help to enhance the momentum of future internal market reforms. Les réformes structurelles et les avantages du marché intérieur élargi de l'UE : Beaucoup a été fait, mais beaucoup reste à faire On attendait beaucoup des deux vagues d’élargissement de l’UE à l’est en 2004 et 2007, et le développement du marché intérieur de l’UE devait grandement dynamiser la croissance économique dans les nouveaux et dans les anciens États membres. Effectivement, d’énormes progrès ont été accomplis, les données actuelles indiquant une intensification des échanges et des flux d’IDE, un renforcement des migrations est-ouest et un environnement macroéconomique plus stable. Mais l’achèvement du marché intérieur progresse à un rythme inégal et on a comparativement moins avancé dans les activités de services, qui représentent plus des deux tiers des emplois et de la valeur ajoutée dans l’économie. Les simulations effectuées à partir d’un modèle empirique montrent que des réformes qui amélioreraient la concurrence et renforceraient les échanges dans les activités de services pourraient se traduire par des gains substantiels de productivité dans les États membres de l’UE. Sur une période de dix ans, la croissance prédite de la productivité du travail qui résulterait d’un ambitieux programme de réformes est de l’ordre de 10 % pour le pays moyen de l’UE, et les nouveaux États membres tireraient encore davantage profit de ces réformes. De plus, les priorités de la réforme structurelle en vue d’un marché intérieur de l’UE plus intégré devraient être les suivantes : l’élimination des obstacles qui subsistent à la mobilité des travailleurs, l’amélioration des infrastructures de transport, la reconnaissance mutuelle des qualifications et une intégration plus étroite des marchés dans les industries de réseau. Enfin, une utilisation plus explicite de l’évaluation comparative pourrait contribuer à accélérer les réformes futures concernant le marché intérieur.

Suggested Citation

  • Jens Arnold & Peter Hoeller & Margaret Morgan & Andreas Wörgötter, 2009. "Structural Reforms and the Benefits of the Enlarged EU Internal Market: Much Achieved and Much to Do," OECD Economics Department Working Papers 694, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:694-en
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    File URL: http://dx.doi.org/10.1787/224350486867
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    Citations

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    Cited by:

    1. LSE Enterprise,, 2011. "Study on the impact of the single market on cohesion: implications for cohesion policy, growth and competitiveness," LSE Research Online Documents on Economics 42840, London School of Economics and Political Science, LSE Library.
    2. repec:kap:ejlwec:v:44:y:2017:i:3:d:10.1007_s10657-016-9536-1 is not listed on IDEAS
    3. Mirajul Haq & Syed Kafait Hussain Naqvi & Muhammad Luqman, 2016. "Is the Value Addition in Services and Manufacturing Complementary? Empirical Evidence from SAARC," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(2), pages 31-52, July-Dec.
    4. Rauf Gönenç & Łukasz Rawdanowicz, 2010. "Regulatory Reforms to Unlock Long–Term Growth in Turkey," OECD Economics Department Working Papers 821, OECD Publishing.

    More about this item

    Keywords

    croissance économique; economic growth; integration; intégration; productivity; productivité; regulation; réforme structurelle; réglementation; structural reforms;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F15 - International Economics - - Trade - - - Economic Integration
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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