Current publications

Cover of EconPol opinion

The Priorities of Public Buyers

Sebastian Blesse

Public procurement officials make substantial decisions for public good provision, and their decisions have widespread welfare implications. Yet despite the importance of these decisions, there can be a lot of discretion applied by the individuals awarding public sector contracts. EconPol network member Sebastian Blesse (ZEW) and co-authors Janne Tukiainen, Albrecht Bohne, Leonardo Giuffrida, Jan Jääskeläinen, Ari Luukinen and Antti Sieppi investigated the decisions made by public procurement officials in contracting bureaus in government offices of various types across states, regions and municipalities in Finland, Germany and Italy to examine the level of discretion they were able to apply.

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Cover of EconPol Opinon

How Financial Regulation Can Help Save the Planet

Antonio Cabrales

Global authorities have longstanding worries about the impact of financial contagion on the economy: the domino effect of a failing bank can have severe repercussions, as the 2008 financial crash illustrated. To deal with these potential shocks, regulators and financial institutions have implemented risk management systems and processes designed to minimize the likelihood that such an event will be able to destroy the economy again. However, while these new frameworks and increased capital reserves go a long way to protecting financial institutions, according to economist Antonio Cabrales there is one area that is being overlooked: the link between financial systems and climate change.

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Cover of EconPol opinion

Online Public Procurement System Reduces Collusion in Ukraine

Vitezslav Titl

An  e-procurement system launched by the central government in Ukraine in 2016 reduces collusion and leads to better market outcomes, according to research carried out by Bruno Baranek, Leon Musolff and Vitezslav Titl. The system allows members of the public to leave reviews on public procurement processes – and there’s little evidence of it being used to sabotage rival businesses. This research exploits a unique setting in Ukraine and illustrates that online public monitoring of procurement markets can eliminate collusion and improve market outcomes. The 2016 reform allows citizens to observe complete information about procurement contracts and comment, review, monitor, and submit abuse reports.

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Cover of EconPol opinion

Auctioning Renewable Energy: How to Put a Price On It?

Natalia Fabra

The European Commission has set one of its key climate and energy targets as achieving a share of at least 32% for renewable energy over total energy consumed by 2030. But despite such a large share up for grabs, the methods by which renewable energy is bought and sold are far from clear. Renewable energy auctions have been implemented globally; they’re currently taking place in most countries in Europe and beyond 100 countries around the world. But, says Natalia Fabra of EconPol Europe and Universidad Carlos III de Madrid, there’s no uniformity about the way the auctions are being run, with each country using their own system.

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Cover of EconPol opinion

No-Deal Brexit has Drastic Implications for UK Firms Reliant on EU27 Supply Chains

Lisandra Flach (EconPol Europe, LMU Munich and ifo Institute), Feodora Teti (EconPol Europe, LMU Munich and ifo Institute)

The decision of the UK to leave the EU imposes a key challenge for trade relations; regardless of the outcome of trade talks, trade costs are set to increase with the resulting shocks more severe for goods that are highly dependent on few suppliers. In the worst case scenario, say Lisandra Flach (EconPol Europe, LMU Munich and ifo Institute) and Feodora Teti (EconPol Europe, LMU Munich and ifo Institute), these shocks will cause significant supply chain disruptions that will have a much harsher impact on the UK than any EU member state.These product dependencies, they say, emphasize the need for a trade agreement that minimizes the costs of Brexit for both sides and reduces the uncertainty in international relations.

 

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Cover of EconPol Policy Brief 32

EU27 and the UK: Product Dependencies and the Implications of Brexit

Lisandra Flach (EconPol Europe, LMU Munich and ifo Institute), Feodora Teti (EconPol Europe, LMU Munich and ifo Institute), Lena Wiest (EconPol Europe, University of Tübingen and ifo Institute) and Margherita Atzei (EconPol Europe, University of St. Gallen and ifo Institute)

The decision of the UK to leave the EU imposes a key challenge for trade relations and, depending on the outcome of the ongoing Brexit negotiations, will cause severe increases in bilateral trade costs. The experience from former crises has shown that disruptions caused by negative shocks are more severe in case of highly dependent goods, which are sourced from few suppliers. This report provides an overview on product dependencies between EU27 and the UK and uncovers several stylized facts. It shows that, whereas for most of the EU27 countries less than 10% of the highly dependent goods are sourced from the UK, the majority of UK’s imports of highly dependent goods are sourced from countries in the EU27. However, for both, the UK and the EU27, Brexit imposes challenges for supply chains, as in both cases most of these goods are classified as intermediate goods, which are used as input for final production in the destination country. For those goods, uncertainty and rising costs due to Brexit may cause an additional distress on supply chains.

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Cover of EconPol Policy Report 26

World Economy: What Does the Road to Recovery from COVID-19 Look Like?

Expert Survey on Worldwide Effects of the Pandemic

Dorine Boumans, Pauliina Sandqvist and Stefan Sauer (EconPol Europe, ifo Institute)

As the economy and our daily life return to a “new-normal” in the midst of Covid-19, the possibility of a second wave leaves lots of uncertainty about future developments. To understand indications about the impact of the pandemic on economic performance in different countries across the world, we conducted a survey among 950 economic experts in 110 countries. This report gives an overview of the most important results of the survey and compares them in different world regions and countries. An extra focus is placed on the European Union’s strategy to combat the crisis and how experts from member states assess the different policy measures.

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Cover of EconPol Policy Report 25

The Covid-19 Crisis, Italy and Ms Merkel’s Turnaround: Will the EU Ever be the Same Again?

Luigi Bonatti and Andrea Fracasso (EconPol Europe, University of Trento)

The functioning of the Eurozone was irreversibly transformed by the European debt crisis and now, as a consequence of the Covid-19 pandemic, a new and even more devastating crisis has hit the EU. German Chancellor Angela Merkel has abandoned her opposition to substantial intercountry transfers and any form of debt mutualization, a turnaround motivated by the exceptional circumstances brought about by the pandemic. The risk that Italy’s fragile financial, economic and political situation, exacerbated by the current crisis, could destabilize the entire Eurozone in the absence of sizeable external assistance was probably one of the main determinants of the German government’s policy shift. In this policy report, Luigi Bonatti and Andrea Fracasso argue that this move will be insufficient to drive Italy into a sustainable and satisfactory growth path, and it will need further financial support from EU institutions and member states. Should they agree to provide financial assistance to the Eurozone's most vulnerable countries and make permanent what was supposed to be temporary, or expose the zone to a possible implosion?

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Cover of EconPol Policy Report 24

Financing the EU: New Context, New Responses

Clemens Fuest (EconPol Europe, ifo Institute), Jean Pisani-Ferry (Bruegel)

This paper discusses the introduction of new own resources to finance the EU budget. Currently roughly two thirds of the budget is financed from GNI-based own resources, which are essentially contributions made by the member states out of national tax revenues. While GNI resources are transparent, fair and in line with the principle of subsidiarity, they are criticised for leading to political debates that emphasise the cost of EU spending rather than on the benefits, and for contributing to the framing of discussions on the EU budget in terms of net balances, rather than value added through common policies and the provision of European public goods. Clemens Fuest and Jean Pisani-Ferry propose that the EU should receive a new source of funding in the form of revenue from the European emissions trading system (ETS). They recommend that revenue from the ETS be used to finance the EU fund for economic recovery (Next Generation EU), which was adopted in July.

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Cover of EconPol Policy Report 23

Has Immigration Contributed to the Rise of Rightwing Extremist Parties in Europe?

Anthony Edo (EconPol Europe, CEPII) and Yvonne Giesing (EconPol Europe, ifo Institute, CESifo and University of Munich)

Improving the economic and social integration of immigrants should be prioritized along with economic and health policies to prevent a rise in far-right parties in the wake of the Covid-19 crisis, as the economic downturn caused by the pandemic and the increased economic insecurity of large numbers of the population could lead to xenophobic reactions and rejection of immigrants. This policy report from Anthony Edo and Yvonne Giesing analyzes the impact of immigration on the rise of far-right parties and finds that, while there is a general tendency towards an increase in far-right voting caused by immigration, this is not automatic and depends on the type of migration. And, say authors, the degree of economic and social integration of immigrants plays an important factor in the formation of anti-immigrant sentiment.  

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