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Defining Moments of European Integration for the Expansion of the Tourism Industry

Defining Moments of European Integration for the Expansion of the Tourism Industry

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Article
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Despite being one of the world's major internationally traded services, tourism remains neglected within debates on European integration and growth models. We highlight the rise of tourism-led growth in Southern Europe. We argue that the process of European integration has been a double-edged sword, simultaneously incentivizing and forcing Southern...

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Context 1
... TFEU). Yet, tourism has indirectly benefited from the process of European integration in multiple ways (see Table 1). ...
Context 2
... World Travel and Tourism Council (WTTC). competitiveness appears less price-sensitive (Tables A1-A4 and Figure A1 in the Online Appendix). This may be due to Portugal already being a much cheaper travel destination than Italy, Spain and Greece. ...

Citations

... Furthermore, the restrictions imposed on national governments as a result of EMU integration -particularly in terms of maintaining a strong currency regime and limiting fiscal and industrial policies as tools for development strategies -have left these economies with few alternatives. As a result, specialization in the tourism sector has emerged as one of the limited viable options for export-led growth that aligns with the EMU regulatory framework (Bürgisser and Di Carlo 2023;Celi et al. 2018). Bürgisser and Di Carlo (2023) contend that, following the European sovereign debt crisis, peripheral member states have relied more on international tourism for economic growth and to derive export revenues that contribute to balance current account deficits. ...
... As a result, specialization in the tourism sector has emerged as one of the limited viable options for export-led growth that aligns with the EMU regulatory framework (Bürgisser and Di Carlo 2023;Celi et al. 2018). Bürgisser and Di Carlo (2023) contend that, following the European sovereign debt crisis, peripheral member states have relied more on international tourism for economic growth and to derive export revenues that contribute to balance current account deficits. In the post-crisis era, while core member states have enjoyed current account surpluses from exporting manufactured goods or high-tech products, peripheral member states have exhibited rising surpluses in their services balance, primarily due to a surge in tourism exports, which have more than offset goods balance deficits. ...
... (retrieved from https://napsintl.com/manufacturing-in-mexico/theimmex-program-manufacturing-in-mexico/). 16 Specifically, the expansion of low-cost airlines and the ongoing political instability in North Africa following the Arab Spring (Bürgisser and Di Carlo 2023;Martins and Mamede 2022). Nadal (2007a, 2007b) investigated whether the tourism exports of Spanish territories over-specialized in tourism activities, such as the Balearic and Canary archipelagos, could act as the booming tradable sector inducing Dutch disease model spending and resource movement effects. ...
Article
This study analyzes explanations identified in the literature for the subpar economic performance of the so-called peripheral member states of the Euro Area since the mid-1990s, comparing it to those of the core, catch-up, and financial hub member states. It argues that a key factor in the peripherals’ malaise was a financial Dutch disease-like mechanism, as the adoption of the euro led to large and sustained capital inflows. This resulted in a structural shift in the productive structure of peripheral economies away from technologically advanced manufactured goods, which are characterized by higher productivity growth. Consequently, peripheral member states specialized in non-tradable sectors, and in low-technology and labor-intensive tradable goods and services sectors, which largely explains the peripherals’ low economic growth, low productivity growth, and growing macroeconomic imbalances. Furthermore, this study argues that the economic underperformance of catch-up member states can also be explained by a financial Dutch disease mechanism.
... During the last decade, there has been increasing interest within the field of comparative political economy (CPE) in the study of national growth models (Baccaro and Pontusson 2016;Stockhammer and Kohler 2022) and growth regimes (Hassel and Palier 2021). Various related topics have been analyzed, ranging from growth models' varieties across countries (Baccaro and Höpner 2022;Bürgisser and Di Carlo 2023;Schedelik et al. 2020;Vukov 2023), the economic and fiscal policies underpinning growth models (Haffert and Mertens 2021), or growth model-specific patterns of inequality (Behringer and van Treeck 2022), financialization (Ban and Helgadóttir 2022), and comparative advantages in the green transition (Driscoll 2023). ...
Research
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Comparative political economy scholarship struggles to categorize Italy’s model of capitalism between a mixed-market economy and a hybrid, stagnant economic system. To enhance our understanding of the Italian political economy, this paper employs the analytical framework of growth regimes to study Italy’s regional economic systems. Our analysis indicates that Italy can hardly be defined as a “national growth regime” due to the presence of two diametrically opposed regional growth regimes: northern regions conform to a manufacturing-based, export-led growth regime supported by competitiveness-enhancing territorial institutions; southern regions conform to a particular variety of the consumption-led growth regime, that is, an administrative Keynesianism regime, which we theorize to typify a regime where growth and employment are systematically dependent on the state’s role as employer of last resort, the state’s consumption-enhancing social policies, and economic forbearance of labor and corporate tax regulations. The paper suggests that studying regional growth regimes is desirable when marked internal diversity in economic outcomes or productive structures exists across regions within (generally larger) countries, and when subnational governments have powers to develop their own major institutions/policies in support of regional growth regimes.
... Services play a pivotal role in both cases. While emphasis is often placed on the specialization in low-level services linked to labor deregulation, tourism (Bürgisser & Di Carlo, 2023), and the wealth effects, high-level services also constitute a significant source of job creation. Another common feature between these economies is that construction has been a major employment driver, especially in Spain, where a speculative bubble boosted the sector excessively, resulting in significant job destruction later on. ...
... This suggests that other explanations not included in our estimates (i.e., among our independent variables) have contributed to the surplus of balance of goods and services from 2012 to 2019 and in 2023 and to the surplus of balance of current account from 2013 to 2019 and in 2023, respectively. During that time, the greater dynamism of the tourism sector in Portugal, particularly due to the liberalisation of airlines and the consequent emergence of low-cost air companies and low-cost flights, could be one of the main reasons behind this improvement in the Portuguese external imbalances during that time(Bürgisser and Di Carlo, 2023). Third, the Portuguese external imbalances tend to be highly persistent primarily because the lagged values of the balance of goods and of the balance of goods and services exert a positive influence on the contemporaneous values of that balance. ...
Research
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Portugal has historically displayed strong external imbalances, which have already resulted in three requests for international financial assistance from the International Monetary Fund, the European Commission and the European Central Bank. Stemming from the framework of mainstream economics literature, these institutions imposed demanding austerity measures based on internal devaluation, huge wage restraint policies and strict control on government balance in order to contain the Portuguese domestic demand and to promote Portuguese external competitiveness. Accordingly, Portuguese labour costs have registered a general decreasing trend, and government balance has substantially improved in the last four decades, but the Portuguese external imbalances remain unsolved, which suggests that we need to go beyond the conventional economic literature in order to better ascertain the right determinants of external imbalances. This paper aims to contribute to the current theoretical debate about the determinants of the external imbalances by relying on the post-Keynesian economics literature and performing a time series econometric analysis for Portugal from 1988 to 2023. Results evidence that the fall of labour costs and the surge of both stock and housing prices are the main drivers behind the Portuguese external imbalances over the last four decades.
... La campagne itinérante avec un campingcar, représentative de la principale innovation symbolique et médiatique de Turismo Sottosopra, s'inscrit donc dans cette approche plus large, en incarnant spécifiquement la stratégie consistant à amener le syndicat physiquement vers les travailleurs pour surmonter la dispersion et la fragmentation qui caractérisent le travail dans le secteur.Le tourisme est donc devenu un domaine d'intervention clé pour le syndicat dans la période post-pandémique. Au lendemain de la crise financière de 2007-2008, la reprise économique italienne avait été principalement tirée par les services -parmi lesquels le tourisme joue un rôle très important en termes de création d'emplois et de croissance du PIB (cf.Bürgisser et Di Carlo 2023). Cependant, les services en général, et l'hôtellerie et l'hébergement en particulier, sont caractérisés par une dynamique de stagnation des salaires et de détérioration de la qualité des conditions de travail, alors même que les difficultés de renouvellement des conventions collectives arrivées à échéance ont de plus en plus miné l'efficacité protectrice des institutions de la négociation collective. ...
Technical Report
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Dans un contexte marqué par des défis sans précédent, les syndicats européens ont su faire preuve de capacités de résistance et d'adaptation remarquables pour sauvegarder et renforcer les droits des travailleurs. Ce rapport passe en revue diverses stratégies mises en œuvre par les syndicats en Allemagne, en Belgique, au Danemark, en Espagne et en Italie. Il examine comment les syndicats de ces pays évoluent dans un environnement socio-économique et politique de plus en plus complexe. Le choix de ces cinq pays est dicté par la volonté de rendre compte des trois grandes variétés de syndicalisme et de systèmes de relations industrielles présentes en Europe. Le rapport analyse également le répertoire des actions d'une fédération syndicale européenne, UNI Europa, afin d'évaluer la dimension européenne de l'activité syndicale.
... En este sentido, Herrero & Rial (2023) sostienen que la mayor parte del crecimiento de las exportaciones en los países mediterráneos se debe al crecimiento de la demanda mundial, seguido en menor media por el efecto positivo de los servicios empresariales intensivos en conocimientos (KIBS, en inglés) y un efecto muy reducido de los CLUs y precios relativos. Adicionalmente, Bürgisser & Di Carlo (2023) señalan que las exportaciones de servicios en la periferia europea se han incrementado principalmente a través de la exportación de servicios turísticos, los cuales difieren notablemente de las características habituales de los modelos exportled. ...
Research
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This article deals with the growth drivers of Mediterranean economies (Italy, Greece, Portugal and Spain) by focusing on their business cycle dynamics since the 90s. Based on the estimation of a Kaleckian model with single equations, we combine the demand regime literature with that on growth models. We find the four economies to be wage-led, while the redistribution in favour of capital has had a significant impact on growth dynamics. This is found to be mirrored in a fall in the multiplier throughout the period, and consequently a reduction in the contributions to growth of private aggregate demand components. Regarding growth drivers, internal variables still explain most of the growth dynamic, whereas financial variables intensify rather than modify the business cycles and fail to compensate for the deceleration of economic growth.
... Then, the implementation of structural adjustment programmes comprising wage devaluation and fiscal austerity restrained domestic demand, thus implying profound job losses concentrated in those sectors that participated in the speculative bubbles of the previous expansionary period. In the post-crisis expansionary period, Mediterranean countries exhibit a more balanced growth model that continues being heavily grounded in services, particularly in those related to tourism (Bürgisser and Di Carlo 2023), and has proven to be inefficient to achieve convergence with core Europe. ...
Article
This paper empirically explores occupational change in Europe after the 2008-crisis (the Great Recession). During this period, which has remained relatively unexplored by the literature so far, many European economies have implemented profound institutional changes in their labour markets and transformed their growth models. Using individual-level data of 18 economies, I build three indicators of job quality -the average educational attainment, the median earnings and an index of job instability based on the contractual characteristics of the job- and analyse relative employment growth of jobs. The findings suggest that there is not just one pattern of occupational change in Europe, in opposition to the mainstream view of pervasive polarisation. On the contrary, I detect a variety of occupational change profiles, which even differ within the same country depending on the indicator employed.
... While some scholars have focused on demandside weaknesses and the impact of European monetary integration (Baccaro and D'Antoni 2020;Guarascio, Heimberger, and Zezza 2023), others have emphasized supply-side structural inconsistencies (Simoni 2020). Other scholars have instead highlighted long-term political and/or economic factors such as the dominance of narrow vested interests, or persistent under-development of the Mezzogiorno (Capussela 2018), as well as a generalized restructuring of Southern European economies towards low value-added sectors and productive specializations, such as tourism (Bürgisser and Di Carlo 2023). ...
Article
This article examines recent developments in Italy's economic and fiscal policymaking. It does so by contextualising the 2023 changes in the Italian National Recovery and Resilience Plan (NRRP) within three broader aspects which have characterised the Italian political economy: (1) the country's conservative fiscal trajectory inside the monetary union (EMU); (2) the expansionary economic policies pursued in the face of both the pandemic and energy crises; (3) the peculiar characteristics of Italy's 'dual-hybrid economy'. The article posits that, since the EMU, Italy has continuously run primary budget surpluses higher than its EMU peers. Only since Covid-19, and with the relaxation of EMU constraints, has Italy's fiscal stance turned expansionary. This has allowed space for various socioeconomic policies to partially shield households and firms from the crises' fallout. However, with a return to fiscal conservatism, the NRRP now represents the only game in town to try and address Italy's dual hybridity characterised by weak state capacity and supply-side institutional inconsistencies as well as two diametrically opposed regional growth regimes in the North and the South.
... During the last decade, there has been increasing interest within the field of comparative political economy (CPE) in the study of national growth models Pontusson 2016, Stockhammer andKohler 2022) and growth regimes (Hassel and Palier 2021). Various related topics have been analysed, ranging from growth models' varieties across countries (Bohle and Regan 2021, Baccaro and Höpner 2022, Bürgisser and Di Carlo 2023, Schedelik et al. 2021, Vukov 2023, the economic and fiscal policies underpinning growth models (Haffert and Mertens 2021), or growth model-specific patterns of inequality (Behringer and van Treeck 2022), financialisation (Ban and Helgadóttir 2022) and comparative advantages in the green transition (Driscoll 2023). ...
Article
Full-text available
Comparative political economy scholarship struggles to categorise Italy’s model of capitalism between a mixed-market economy and a hybrid, stagnant economic system. To enhance our understanding of the Italian political economy, this article employs the analytical framework of growth regimes to study Italy’s regional economic systems. Our analysis indicates that Italy can hardly be defined as a ‘national growth regime’ due to the presence of two diametrically opposed regional growth regimes: Northern regions conform to a manufacturing-based, export-led growth regime supported by competitiveness-enhancing territorial institutions; southern regions conform to a particular variety of the consumption-led growth regime, that is, an administrative Keynesianism regime, which we theorise to typify a regime where growth and employment are systematically dependent on the state’s role of employer of last resort, the state’s consumption-enhancing social policies and economic forbearance of labour and corporate tax regulations. The article suggests that studying regional growth regimes is desirable when marked internal diversity in economic outcomes or productive structures exists across regions within (generally larger) countries, and when subnational governments have powers to develop major own institutions/policies in support of regional growth regimes.
... Pattullo (2005) documents the contradictions of exploitative tourism with little longterm economic gains and no human or cultural benefits. Along similar lines, Bürgisser and Di Carlo (2023) argue that excessive reliance on international tourism for growth comes with additional severe pitfalls. Tourist-dependent countries are highly vulnerable to exogenous shocks such as the recent outbreak of COVID-19, and the sector continues to rely on precarious seasonal forms of employment. ...
Article
Full-text available
This article argues that Croatia's economic performance over the past two decades is deeply related to the dynamics of international trade. Under the premise that what is bought and sold in international markets reflects the economy's fundamentals, we show that the rate of growth compatible with equilibrium in the balance-of-payments, i.e. the dynamic Harrod trade multiplier, is a good predictor of the country's actual long-run growth rate. For this purpose, we apply a state-space model and the Kalman smoother to obtain time-varying parameter estimates of the exports and imports functions. We proceed by using these estimates to investigate the determinants of international non-price competitiveness. Bayesian Model Averaging (BMA) and Weighted Average Least Squares (WALS) techniques are combined to tackle model selection uncertainty. It is shown that R&D investments and human capital accumulation are the most important explanatory variables. We conclude by highlighting the policy relevance of our findings to the evaluation of Croatia's catching-up performance as part of the European Union.