Index Numbers and Aggregation; Cross-Sectional Models; Spatial Models; Economic Integration; Regional Economic Activity; International Relations and International Political Economy
ABSTRACT:
Starting from Professor Kornai’s assertion about the necessity to focus on the long-term perspectives of the transformation process, we analyze in this paper the Lisbon performance of the countries of the European Union from such a long-term, structural perspective.
First, we present the 14 Eurostat “structural indicators” and their measurement deficits as well as a debate about the performance of the countries of the EU in geographical terms. We then analyze this Lisbon indicator performance by factor analytical means.
We observe the contradictions between some of the remaining 13 indicators, chosen by the member governments and the European Commission, to measure the Lisbon progress. We conclude that only a Schumpeterian vision of capitalism as a process of “creative destruction” – or rather – “destructive creation” can explain these contradictions, which we empirically reveal in this analysis, and which beset the “Lisbon process” from the very beginning. We concluded that in reality we are faced with four underlying and contradictory processes of the Lisbon reality
1 a Lisbon productivity factor
2 the avoidance or existence of a high eco-social exclusion
3 the employment performance
4 the neo-liberal European model, which is not clearly and positively linked to the other factors
These factors interact in an often contradictory fashion with one another, exactly analyzed in the paper.
We then proceeded to analyze with multiple regression techniques the recent European Commission data on regional growth in Europe. Patterns of discrimination against the young and the elderly on the labor market are incompatible with long-run economic growth.
Schumpeter’s observations about the destructive creation inherent in the process of capitalist development, his observations about the sociological limits, which the formation and continuity of capitalist elites encounter in the long-run development of the “market economies” as well as his strong belief in the cyclical nature of capitalist development, are all relevant for the interpretation of our other empirical results. To this end, we analyzed economic growth and development patterns in the world system with UNDP data, using SPSS XIV advanced multiple regression techniques. For one, economic growth in the long run is today strongly determined by the long-run positive effects of foreign direct investments per GDP of the host countries. At the same time – and contrary to the traditional expectations of neo-classical economics – the more short-term effects of heavy foreign direct investment inflows on the host countries of FDI are – ceteris paribus – negative. Transnational corporations do not like an environment of instability, and rather prefer the high-wage, high quality, and high-price economies of the typical West European countries, where their penetration rates of the host countries are highest. The critique in the spirit of Stanford economist Pan Yotopoulos and other social scientists of the drive to lower the comparative international price level, which we discuss at length in this study, is strongly vindicated by our empirical results.
Low comparative international price levels, ARE ceteris paribus one of the most important impediments against long-run economic growth.
At the same time, it is clear that state sector influence on the economy finds its limits in the post 1989 political economy of the world.
Our empirical, cross-national analysis, based on UNDP data, is also confirmed by our micro-analysis of University performance on a global scale.
