Volume 1, Issue 2

Eastern enlargement will be costly to incumbent EU countries, as the new members will all be net recipients of EU funds. A balanced view requires that the gains from integration be set against this cost. Drawing on established theories of economic integration, this paper first identifies typical fallacies present in policyoriented thinking about gains from trade liberalization and the role of preferential trading blocs like the EU. Using detailed data on east-west trade for each of the present member states, as well as the relevant trade barriers of the EU and applicant countries, it then presents empirical estimates on the likely orders of magnitude for integration gains. Comparing these to country-specific estimates of the fiscal burden from enlargement, it identifies likely winner and loser countries.

This paper measures the publishing activity and the impact of European economists, 1986±1996. The analysis of the number of publications in selected scholarly journals and the citations shows that, relative to population size, the British economists are in the lead. They publish much more than their German, French and Italian colleagues. At the same time, their work seems also to be cited more often. However, compared to the economists from the small western European countries, the British dominance is much less pronounced. The latter seem to be much more focused on the international academic market than scholars from the large continental countries. 160

First the transmission of information in direct and representative democracies is investigated. Because there is more supply and demand of information, citizens are better informed in direct democracies than in purely representative systems. Then, a survey is given about empirical studies of the economic consequences of direct democracy which show that these consequences are mostly positive. Finally we discuss some of the arguments which are often raised in Germany against the introduction of direct democratic rights on the federal level, especially the reference to `bad experiences' in the Weimar republic. It is shown that these arguments are not valid.

Fiscal competition is supposed to lead to the collapse of the welfare state because, first, it will become difficult for a single jurisdiction to levy a redistribution tax upon the rich and mobile, and second, such a policy, if undertaken in one jurisdiction, will attract poor individuals from other jurisdictions and erode the internal redistribution policy. In this paper, theoretical and empirical studies concerning the impact of taxes and transfer payments on residence decisions of taxpayers are reviewed. The relationship of fiscal competition and the erosion of the welfare state is illustrated with aggregate data on income redistribution in Switzerland.

There are substantial differences in the specialisation within the family, the economy and academics by sex. In order to explain such gender effects, the economic approach focuses on differences in the economic and political constraints and not on gender-specific dispositions and preferences. The division of labour in the family, the education decision and the wage gap, as well as the career choice concerning the occupational structure within the labour market and universities, are discussed using standard economic theory. The paper concludes with some tentative suggestions as to how these decisions by women and men could be influenced in a sensible way.

The paper discusses the economic policy concept of the annual report of the German Council of Economic Advisers 1999/2000 and the major structural problems in Germany. Addressed are the long-run allocative distortions of the tax reform, solutions to the issue of pension and to the institutional arrangement of the labor market. The paper describes the necessary steps to generate a more dynamic economy.

The situation on the German labour market is still a catastrophe. The institutional set-ups on the labour market and the welfare state obviously no longer fit the fundamentally changed economic environment. There is next to no competition on the labour market and unions and employers' associations use the generous welfare state to transfer the burden of adjustment to changes in the economic environment onto the public at large. Institutional mismatch is prevalent. The red-green coalition government has not only realized that persistently high unemployment inflicts tremendous economic damage but that it is also politically destabilizing. It has therefore announced that the performance on the labour market during its term of office shall be its own measure of success or failure. This paper discusses whether the regulatory steps taken by the red-green coalition government, like implementing stricter employment protection legislation, reintroducing full pay when sick, and changing the law concerning low-paid jobs, are suitable for reducing this institutional mismatch.

In his article ``Was bewirkt die Volkswirtschaftslehre?“ Bruno S. Frey has argued that economics and their ideas are not very influential in politics and society. While Frey is mainly focusing his analysis on the short-term impact of economic ideas such as economists in politics and in political advising, this commentary does, however, claim that ideas also have a long-term impact since they form worldviews, perceptions and agenda settings. An analysis must thus take into account how ideas are penetrating everyday life in politics, science, bureaucracy and society.