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Evolving Structural Patterns in the Enlarging European Division of Labour: Sectoral and Branch Specialisation and the Potentials for Closing the Productivity Gap

  • Dr Johannes Stephan

    (Institute for Economic Research - Institut für Wirtschaftsforschung Halle IWH)

The formerly socialist countries in Central East Europe strive to close the development gap between their economies and those of the countries in West Europe. Their main vehicles in support of catch-up development featured the internal and external liberalisation of markets. Internal liberalisation was geared towards replacing the system of economic planning with the governance of markets and external liberalisation aimed at integration into the World market in general and the European market in particular. European integration itself was coined to serve as an engine for economic development: market access, efficient allocation of resources in the international division of labour, and access to more advanced technology were perceived to be the main drivers. The political instrument in support of this is the prospected European Union membership. In fact, a selection of Central East European countries have been admitted and will become full members in April 2004. Today, slightly more than one decade after the outset of systemic transition, most of those countries are widely considered ‘functioning market- economies’. Their markets are well integrated into the European economic area, in as much as foreign trade had been liberalised gradually since the early 1990s and fully-fletched currency convertibility allows trade on the respective capital and foreign exchange markets in East and West. The notable exception, however, remains the labour markets: here political concerns of absorptive capacities in the West still postpone integration. With product markets near to full integration, the economies have undergone a profound process of structural change. The pattern of international specialisation which has emerged as a result of sectoral change is the focus of the research presented here. The main objective of research was to determine the patterns as they have evolved over time, and to assess the prospects of catching up derived from those sectoral patterns. This publication reports research and the results of one of the workpackages in a larger international cooperative research project, financed by the EU in its 5th Framework Programme: EU Integration and the Prospects for Catch-Up Development in CEECs - The Determinants of the Productivity Gap (HPSE-CT-2001-00065). This project is coordinated by the author of this report at the IWH. Whereas research in this workpackage is concluded with this report, other workpackages will continue to assess further determinants until late summer 2004, when the project formally ends. All research proceedings in this project can be revisited on the project internet-site: www.iwh- halle.de/projects/productivity-gap.htm

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Paper provided by EconWPA in its series Development and Comp Systems with number 0403003.

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Length: 86 pages
Date of creation: 09 Mar 2004
Date of revision:
Handle: RePEc:wpa:wuwpdc:0403003
Note: Type of Document - pdf; pages: 86
Contact details of provider: Web page: http://128.118.178.162

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  1. Johannes Stephan, 2002. "Industrial Specialisation and Productivity Catch-Up in CEECs - Patterns and Prospects -," IWH Discussion Papers 166, Halle Institute for Economic Research.
  2. Yvonne Wolfmayr-Schnitzer, 2000. "Economic Integration, Specialisation and the Location of Industries. A Survey of the Theoretical Literature," Austrian Economic Quarterly, WIFO, vol. 5(2), pages 73-80, May.
  3. Tomasz Mickiewicz & Anna Zalewska, 2002. "Deindustrialisation. Lessons from the StructuralOutcomes of Post-Communist Transition," William Davidson Institute Working Papers Series 463, William Davidson Institute at the University of Michigan.
  4. Snower, Dennis J., 1994. "The Low-Skill, Bad-Job Trap," CEPR Discussion Papers 999, C.E.P.R. Discussion Papers.
  5. Peter Havlik, 2001. "Patterns of Catching-Up in Candidate Countries' Manufacturing Industry," wiiw Research Reports 279, The Vienna Institute for International Economic Studies, wiiw.
  6. Michael Peneder, . "Intangible Investment and Human Resources. The New WIFO Taxonomy of Manufacturing Industries," WIFO Working Papers 114, WIFO.
  7. Johannes Stephan, 2004. "The Productivity Gap between East and West Europe: What Role for Sectoral Structures during Integration?," Development and Comp Systems 0403004, EconWPA.
  8. Michael Landesmann & Robert Stehrer, 2002. "The CEECs in the Enlarged Europe: Convergence Patterns, Specialization and Labour Market Implications," wiiw Research Reports 286, The Vienna Institute for International Economic Studies, wiiw.
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