Contents of issue 5-6/2008
Wojciech Rogowski, Jacek Socha - Business Demography, Job Flows and Productivity in Poland’s Enterprise Sector, abstract
Łukasz Jabłoński - The Evolution of Views on Convergence in Development Economics, abstract
Paweł Dziewulski - Competition on the Telecommunications Market Under Asymmetric Access to Infrastructure, abstract
Beata Guziejewska - The Effectiveness of Local Government Finance, abstract
Marian Gorynia, Barbara Jankowska - Business Clusters and the Competitiveness and Internationalization of Companies in Poland’s Wielkopolska Region, abstract
, articleEUROPEAN INTEGRATION
Janusz Heller, Emila Ewertowska - The Macroeconomic Determinants and Effects of Economic Growth in Ireland, abstract
, articleCONFRENCES - POLEMICS - REVIEWS
Stiglitz: Back to Keynes - Tadeusz Kowalik
Book Review: Davide Castellani, Antonello Zanfei, Multinational Firms, Innovation and Productivity
, Edward Elgar, Cheltenham 2006, 250 pp. - reviewed by Andrzej Cieślik
Book Review: Czesław Bywalec, Konsumpcja w teorii i praktyce gospodarowania
(Consumption in Economic Theory and Practice), Wydawnictwo Naukowe PWN, Warsaw 2007, 224 pp. - reviewed by Bogumiła Szopa
Labor Market Instruments and Efforts to Limit Unemployment - Tadeusz Smuga
Wojciech Rogowski, Jacek Socha - Business Demography, Job Flows and Productivity in Poland’s Enterprise Sector
The article deals with Poland’s transition to a market economy in the 1990s and compares the changes that took place in the Polish economy at the time with developments in mature economies. Using three indexes—the enterprise turnover rate, job flow rates, and productivity growth decomposition—the authors attempt to show that transition processes in Poland have had a positive effect on the country’s enterprise sector, though there is still a lot of work to be done. These three indexes help understand the structural changes that occurred during the transition from central planning to an open market economy in Poland.
Using a unique set of data from Polish companies, the authors calculated several measures of resource reallocation, along with enterprise entry and exit rates, and job flow rates. Moreover, they computed the labor productivity growth rate. The high rates of resource reallocation suggest that the Schumpeterian processes of creative destruction have played a major role in productivity enhancement. Surprisingly, labor productivity decomposition shows that the “within effect” influenced productivity the most, while the net entry effect was significant and positive. The poor availability of data explains why the authors were unable to calculate more sophisticated measures of productivity growth. The quality of the data may be also responsible for the substantial sensitivity of the results to the productivity decomposition method.Keywords
: entry and exit rates, employment, job flow, productivity growth, manufacturingArticle
Łukasz Jabłoński - The Evolution of Views on Convergence in Development Economics
The paper examines the evolution of views on convergence in development economics. The author describes the evolution of views on key factors and barriers to the process of bridging the gap in development in economically backward and developing countries. The author looks at convergence trends through the lens of the theory of economic growth and economic policies recommended to catching-up countries.
A brief review of economic theories reveals that most theories focus on the factors and determinants of convergence. In the debate on convergence, the focus is increasingly moving away from material factors (physical capital) in favor of those linked with people (human resources) and relationships among microeconomic entities (institutions and social capital). However, this does not mean that material factors are less significant nowadays, Jabłoński says. Consequently, he adds, theoretical convergence scenarios should be built on the basis of material factors of growth and economic development.
The way in which the theory of growth is evolving puts off the prospect of convergence between wealthy, developing and economically underdeveloped countries, Jabłoński says. The precursors of the theory of growth described convergence as a process that was in a sense indispensable and autonomous. Meanwhile, proponents of the theory of endogenous growth tend to see it largely as an illusion. In the context of his discussion of economic policies, the author concludes that, in determining the general framework for economic policy, it is necessary to avoid a universal approach based on Eurocentric and Atlantic modernization theories. The experience of developing countries from the 1980s shows that policies recommended to economically underdeveloped and developing countries should be adapted to these countries’ specific conditions, the author concludes.Keywords
: convergence, development economics, catching-up economies, economic growth theoriesArticle
Paweł Dziewulski - Competition on the Telecommunications Market Under Asymmetric Access to Infrastructure
The article examines the behavior of businesses on a market where market players have limited access to infrastructure. The purpose of the article is to identify and assess the behavior of businesses that are forced to make strategic decisions under such circumstances. The analysis is based on a static model of monopolistic competition in which a company leasing infrastructure to other businesses plays the role of market leader, while the remaining entities are described as “followers.”
The author looks at fees charged for the rental of infrastructure in the context of the followers’ fixed costs. The analysis reveals a strong link between the form of payment and the level of production. Market players benefit when leasing fees are imposed on a lump-sum basis, which leads to lower prices and a more favorable structure of the market, Dziewulski says.Keywords
: monopoly, competition, access, infrastructure, demonopolization, telecommunicationsArticle
Beata Guziejewska - The Effectiveness of Local Government Finance
Increasing the effectiveness of public finance in decentralized systems is a major challenge to both economic theory and practice. In broad terms, economic effectiveness means the relationship between the value of outlays incurred and the effects obtained thanks to these outlays. In the public finance sector, such calculations are difficult because the effects of operations in this sector are often impossible to measure. Studies of the effectiveness of local government finance in Poland tend to focus on a number of selected aspects, yet they rarely deal with the issue of effectiveness in the context of competition and payment for public services, the author says.
Guziejewska describes the basic assumptions of two theoretical models known from research reports published abroad: a model developed by American economist Charles Tiebout and a theory proposed by Swedish economist Knut Wicksell. Both these theories deal with competition between local communities and the problem of preferential treatment with regard to public goods and payment for these goods. Even though these theoretical models have their limitations, both Tiebout and Wicksell point to the need to decentralize local finances, Guziejewska says. She presents different scenarios for income shocks in local government budgets, in both the centralized and decentralized systems.
The theories described by the author are the basis for formulating certain recommendations related to the rationalization of local government finance, including more direct use of tax breaks for local taxpayers, the equivalence of burdens imposed on public institutions, and the need to counteract “fiscal illusions.”Keywords
: decentralization, local government finance, effectiveness, the Tiebout hypothesis, the Wicksell modelArticle
Marian Gorynia, Barbara Jankowska - Business Clusters and the Competitiveness and Internationalization of Companies in Poland’s Wielkopolska Region
Polish businesses have faced a number of challenges in connection with the country’s membership of the European Union. First, companies must make efforts to increase their international competitiveness; second, they must make their operations more international in nature. The question is if Polish businesses can be supported in their efforts to improve their international competitiveness, while not deforming the market mechanism. Any form of supporting businesses should have a positive influence on their internationalization behaviors. A cluster theory put forward by American economist Michael Porter could provide inspiration in the search for ways to increase the international competitiveness and internationalization of Polish enterprises, the authors say. Porter argues that clusters have the potential to affect competition in three ways: by increasing the productivity of the companies in the cluster; by driving innovation in the field; and by stimulating new businesses in the field.
Porter’s cluster theory is at the center of a survey conducted by Gorynia and Jankowska among enterprises in Poland’s Wielkopolska region in July and August 2006 and in April and May 2007. These surveys represent the principal part of a project dedicated to the role of clusters in supporting the international competitiveness and internationalization of Polish enterprises.
The authors describe the results of their empirical studies of three clusters located in Wielkopolska: a furniture cluster, a heating-boiler cluster, and an automotive cluster. The authors present the opinions of the companies surveyed regarding the influence of the emerging clusters on the competitiveness and internationalization of participating companies. The surveys were conducted in the form of structured direct interviews with company executives. The main research tool was a questionnaire with 21 questions.
The results obtained by the authors show that the development of each cluster depends on the behavior of enterprises and the activities of business self-regulation organizations, in addition to economic policy. A key factor is the promotion of the positive effects of exchanging knowledge among cluster participants. Participation in a cluster strengthens the ties between companies and increases their competitiveness and internationalization, the authors conclude.Keywords
: business cluster, competitiveness, internationalization, enterprise, WielkopolskaArticle
Janusz Heller, Emila Ewertowska - The Macroeconomic Determinants and Effects of Economic Growth in Ireland
The authors describe a combination of factors that have influenced economic growth in Ireland. The study relies on description methods, tabular analysis and synthesis.
Ireland joined the European Community in 1973, but the first few years of membership brought no major benefits for the country. This means that European Community membership alone was not enough to spur the Irish economy, Heller and Ewertowska note. In the initial period after joining the European Community, Ireland experienced stagnation and a regression that eventually led to stagflation, an extremely dangerous trend that lasted from 1981 to 1983. It was not until 1984 that the Irish government brought inflation under control and kept in check effectively for many years. This successful campaign against inflation was the first macroeconomic development that laid the groundwork for sustained economic growth in Ireland, the authors say. In 1987-1997 four social partnership agreements were made in Ireland. The reforms combined neoliberal concepts with state intervention. The government streamlined expenditure, reduced the budget deficit and public debt, accelerated privatization, and reduced the rate at which pay grew, in addition to cutting non-wage labor costs. At the same time, the government offered tax breaks and preferential treatment to investors in selected industries and it also granted subsidies to those providing employee training and retraining programs. These measures were supported by an inflow of foreign direct investment and funds from European Union coffers. All these efforts were oriented toward structural changes in the infrastructure sector and the economy as a whole. As a result, Ireland stopped being a poor and backward country that it was when it joined the European Community in 1973. It grew into one of the wealthiest countries in the EU. In 1973, Ireland’s GDP per capita was just 64 percent of the EC average. In 2005, the country’s GDP per capita accounted for 139 percent of the EU average and was the second-highest in the EU after that of Luxembourg. The main source of Ireland’s success story has been the country’s ability to skillfully combine market (neoliberal) mechanisms with state intervention, Heller and Ewertowska say. This means that Ireland is not a liberal country according to the definition used in classical economics, the authors conclude.Keywords
: Ireland, economic growth, inflation, unemployment, neoliberalism, state interventionArticle