Documents Journal of Economic Policy Reform 3 results

"We position “smart specialization” (SS) as the third external and conditionality-based reform of economic policy rationales – after Washington Consensus and Europeanization – in Central and Eastern Europe (CEE). We discuss what kind of state, policy, and administrative capacities, or routines, SS presumes. We show that over the years CEE economies have built very different routines, especially for policy coordination and public–private interactions. Design and implementation of functional SS strategies requires critical attention and development of these routines through contextual policy experimentation in all CEE regions. We provide some general guidelines for this."

"The regional innovation paradox is the greater need of lagging regions to invest in innovation and their relatively lower capacity to absorb funding compared to more advanced regions. Using data on regional public spending, industry composition and economic performance, we test empirically whether there is a differential impact of European funding on regional economic growth between Eastern and Western European regions. We conclude that the paradox is proven and consider the extent to which smart specialisation strategies may help to improve the quality of governance of regional innovation systems."

"The Washington Consensus reform resulted in economic collapse and stagnation in many transition economies and “lost decades” in other developing countries in 1980s and 1990s. The paper provides a new structural economics perspective of such failures. The Washington Consensus reform failed to recognize that many firms in a transition economy were not viable in an open, competitive market because those industries went against the comparative advantages determined by the economy's endowment structure. Their survival relied on the government's protections and subsidies through various interventions and distortions. The Washington Consensus advised the government to focus their reforms on issues related to property rights, corporate governance, government interventions, and other issues that may obstruct a firm's normal management. Without resolving the firms' viability problem, such reforms led to the firms' collapse and an unintended decline and stagnation of the economy in the transition process. This paper suggests that the viability assumption in neoclassical economics be relaxed when analyzing development and transition issues in socialist, transition, and developing economies."