Nauro F. Campos

Brunel University London · Department of Economics and Finance

This paper provides new estimates of Okun's unemployment-output relationship in euro area countries between 1979 and 2019. We find our structural estimates are stable but substantially lower than the reduced-form estimates that tend to characterise the literature and that the responsiveness of output to unemployment is driven by idiosyncratic facto...

This paper contributes to the study of the income-democracy relationship in three ways: it argues that the causal relation is U-shaped, not linear as often stated; it uses night-lights (in addition to official GDP statistics) to address measurement concerns; and it strengthens causal identification by implementing novel advances on differences-in-d...

This paper studies the unemployment-output relationship from 1979 to 2019 in advanced countries. The paper offers three main contributions: it reports (i) structural and (ii) dynamic estimates that (iii) account for idiosyncratic and common shocks in a Structural Panel-VAR framework. The main results show that unemployment responses to output (Okun...

This paper studies the productivity effects of integration deepening. The identification strategy exploits the 1995 European Union (EU) enlargement, when all candidate countries joined the Single Market but one — Norway — did not join the EU. Our synthetic difference-in-differences estimates on sectoral and regional data suggest had Norway chosen d...

This paper studies the productivity effects of integration deepening. The identification strategy exploits the 1995 European Union (EU) enlargement, when all candidate countries joined the Single Market but one — Norway — did not join the EU. Our synthetic difference-in-differences estimates on sectoral and regional data suggest had Norway chosen d...

Argentina is the only country in the world that was developed in 1900 and developing in 2000. Although there is widespread consensus on the occurrence and uniqueness of this decline, an intense debate remains on its timing and underlying causes. This paper provides a first systematic investigation of the timing of the Argentine debacle. It uses an...

Despite numerous studies about core-periphery in monetary unions, few focus on their dynamics. This paper (i) presents new theory-based, continuous and dynamic measures of the probability of a country being classified as core or periphery; (ii) estimates the determinants of the changes in this probability over time and across countries; and (iii) u...

This paper addresses two main questions: (a) Has European integration hindered the implementation of labour, financial and product market structural reforms? (b) Do the effects of these reforms vary more across sectors than across countries? Using more granular reform measures, longer time windows and a larger sample of countries than previous stud...

This paper explores the impact of EU membership on foreign direct investment (FDI). It analyses empirically how the effects of such deep integration differ from other forms and investigates what drives these effects. Using a structural gravity framework on annual bilateral FDI data for almost every country in the world, over 1985-2018, we find EU m...

It has long been argued that structural reforms constitute a remedy for getting countries out of the low-growth environment that Europe has experienced in the last decade. Many recent studies show long-term benefits of such reforms in cross-country settings, but ignore the heterogeneity across different country experiences. To address this gap in t...

Economic Growth and Structural Reforms in Europe - edited by Nauro F. Campos April 2020

Economic Growth and Structural Reforms in Europe - edited by Nauro F. Campos April 2020

Economic Growth and Structural Reforms in Europe - edited by Nauro F. Campos April 2020

Economic Growth and Structural Reforms in Europe - edited by Nauro F. Campos April 2020

Economic Growth and Structural Reforms in Europe - edited by Nauro F. Campos April 2020

Economic Growth and Structural Reforms in Europe - edited by Nauro F. Campos April 2020

Cambridge Core - Economic Development and Growth - Economic Growth and Structural Reforms in Europe - edited by Nauro F. Campos

The two key events expected to mark the year 2019 were the 20th anniversary of the euro and Brexit. This paper examines the role of the United Kingdom on the stability of the euro area. We study stability from the perspective of synchronisation of economic activity in a core and periphery framework. We show the UK, since 1990, has become significan...

We investigate whether and how economic integration increases state capacity. This important relationship has not been studied in detail so far. We put together a conceptual framework that highlights what we call the Montesquieu, Weber and Smith channels to guide our analysis. Each of these corresponds to a series of mechanisms in three distinct in...

Labour market liberalization is certainly one of the most important structural reforms but it is also one of the least well-understood. In part, this is because empirical evidence is largely confined to OECD countries and to the post-1990 period. This chapter introduces a new index of labour market regulation rigidity covering 140 countries from 19...

The literature on the growth effects of European integration remains inconclusive. This is due to severe methodological difficulties mostly driven by country heterogeneity. This paper addresses these concerns using the synthetic control method. It constructs counterfactuals for countries that joined the European Union (EU)from 1973 to 2004. We find...

Purpose This paper aims to conduct a systematic meta-analysis on emerging economies to summarize these effects and throw light on the strength and heterogeneity of these conditionalities. Design/methodology/approach This paper proposes a new methodological framework that allows country- and firm-level effects to be combined. The authors hand colle...

A defining feature of the British performance is its relative decline: After 1945, the six founding members of the European Union grew faster than (and some effectively overtook) the UK, yet there is a turning point when this relative decline stops (although it does not revert). The conventional view is that this occurs in the mid-1980s and the rea...

This paper investigates whether and to what extent foreign direct investment inflows into the United Kingdom are caused by its membership in the European Union (EU). It reports two main sets of econometric estimates: (a) synthetic counterfactual method with annual data for large sample of developing and developed countries over 1970–2014 and (b) gr...

“The UK-EU economic relationship has never been more important but also more uncertain. For anyone seeking perspective, this book is the essential guide.” Barry Eichengreen, George C. Pardee and Helen N. Pardee, Professor of Economics at the University of California, Berkeley “Brexit is an earthquake for the UK and EU. This timely book helps us un...

This paper presents a dissonant view on post-war British economic performance. A defining feature is the decline of the UK relative to the six founding members of the European Union after 1945. However, this relative decline stopped. The conventional view is that a turning point occurs in the mid-1980s when Mrs Thatcher implements far-reaching stru...

Although firms use various strategies to try to influence government policy, with lobbying and corruption chiefly among them, and political institutions play an important role in determining policy choices, very little research has been devoted to these topics. This paper tries to fill this gap. Using cross-country enterprise-level data, it investi...

This note argues that one should lay the focus of future European growth policy on integration and technology. This focus should be on maximising the growth effects of their interaction, with an emphasis on the importance of deep integration. The note provides three examples that show how deep integration has contributed to stop the relative econom...

Does corruption grease or sand the wheels of economic growth? This paper provides a systematic evaluation of the effect of corruption on growth, using metaanalysis techniques for 460 estimates from 41 studies. We find that publication bias, albeit acute, does not dissipate the genuine and negative effect of corruption on growth. Among the main fact...

Bayoumi and Eichengreen (1993) establish a EMU core–periphery pattern using 1963–1988 data. We use same methodology, sample, window length (1989–2015), and a novel over-identifying restriction test to ask whether the EMU strengthened or weakened the core–periphery pattern. Our results suggest the latter.

It remains under-appreciated that deep economic integration (which goes beyond free trade agreements) can induce powerful actors to support increasing general state capacities in less-developed countries. In this paper we ask: under what conditions can deep economic integration yield increases in state capacity? We measure institutional change in 1...

Argentina is the only country in the world that in 1900 was ‘developed’ and in 2000 was ‘developing’. Although economic historians have identified and explored various possible explanations (chiefly institutions, political instability, financial development, inflation, trade openness and international financial integration), no study so far has att...

The New Structural Economics and (neo)Schumpeterian approaches aspire to be new paradigms in development policy, while Transition Economics has de facto been operating as such a paradigm in the context of Eastern Europe and FSU. They all represent powerful heuristics with farreaching implications on different policy areas. In policy terms, Eastern...

RESUMO Este artigo investiga os mecanismos específicos pelos quais instituições jurídicas e o chamado Estado de Direito afe-tam o desempenho das empresas. Os dados foram obtidos por meio de questionário aplicado a uma amostra de apro-ximadamente 100 empresas no Brasil, atuantes nos setores têxtil e eletrônico. Foram analisadas as percepções das emp...

What are the factors that explain reversals in the implementation of structural reforms? Our main hypothesis is that reversals in different reforms are driven by different factors. This paper uses new reform indicators and presents novel evidence showing that (a) FDI inflows reduce the likelihood of privatization reversals, (b) worsened terms of tr...

This paper examines both the determinants and the effects of changes in the rigidity of labor market legislation across countries over time. Recent research identifies the origin of the legal system as being a major determinant of the cross-country variation in the rigidity of employment protection legislation. However, the supporting evidence is l...

What accounts for the dynamics of financial reforms? This paper identifies the political regime as one of the main factors. Focusing on democratization and financial reform, it puts forward novel evidence for a U-shaped relation, across countries and over time, for different reform measures and a wide range of estimators. Partial democracy is a mai...

The effects of structural reforms have come under intense scrutiny lately. One important reason is the contrasting findings from the literature, driven in large part by measurement issues. In this paper, we put forward improved measures of economic liberalization across countries and over time. We show that structural reforms, according to these ne...

Nearly two decades after the start of economic and political reforms in the former communist countries, the economic and political outcomes are very diverse. On the one hand, the countries of Central Europe and the Baltics were able, for the most part, to stabilize their economies after a few years of output fall and to recover their pre-1989 outpu...

This paper provides cross-country econometric evidence on lobbying using data for about 3,500 firms in 22 transition countries in the late 1990s. We show that firm size, firm ownership and national political institutions are important determinants of lobbying membership, and that lobbying is the most effective medium of influence (vis-à-vis corrupt...

Previous studies suggest that the higher is the level of political instability (PI), the lower is the investment rate. Yet, some paradoxical findings have been left unanswered, in particular concerning the Middle East and North Africa (MENA) region, where conventional measures of PI are extremely low and positively rather than negatively related to...

There is still an intense controversy about the empirical support for the effects of structural reforms on economic growth. This paper uses data from 46 studies and more than 500 estimates to: (a) document the variation in these estimated effects and (b) identify the main factors that help explain it. We put forward evidence, based on the general-t...

In their survey of the literature on ethnic fractionalization and economic performance, Alesina and La Ferrara (2005) identify two main directions for future research. One is to improve the measurement of diversity and the other to treat diversity as an endogenous variable. This paper tries to address these two issues: it investigates the effects o...

How effective is foreign direct investment in supporting economic performance in low-income countries? This paper assesses this question using meta-regression-analysis techniques on a set of 550 and 554 estimates of the impact of FDI on economic performance from 103 micro and 72 macro-studies, respectively. The results suggest that (a) the estimate...

Does corruption grease or sand the wheels of economic growth? This paper uses meta-analysis techniques to systematically evaluate the evidence addressing this question. It uses a data set comprising 460 estimates of the effect of corruption on growth from 41 empirical studies. We find that the main factors explaining the variation in these estimate...

Crises beget reforms is a powerful hypothesis. But which type of crises - economic or political - are the main drivers of structural reforms? To answer this question, we construct measures of labour market and trade liberalisation and the two types of crises for a panel of about 100 developed and developing countries between 1960 and 2000. We find...

Conventional wisdom depicts corruption as a tax on incumbent firms. This paper challenges this view in two ways. First, by arguing that corruption matters not so much because of the value of the bribe ("tax"), but because of another less studied feature of corruption, namely bribe unavoidability. Second, we argue that the social costs of corruption...

The relationship between structural reforms and foreign direct investment (FDI) inflows is complex because different reforms have different impacts and because their complementarities have important yet imperfectly understood effects on FDI inflows. The objective of this paper is to try to extricate these effects, focusing on the dynamics of privat...

This paper examines the relationship between differences in civil society development under communism and divergence in the nature and pace of political and economic reform and transformation after 1989. We put together a unique data set on dissident activities for the 27 former centrally planned economies of Central and Eastern Europe and the form...

What accounts for the dynamics of financial reforms? This paper identifies the political regime as main factor. Focusing on democratization and financial reform, it puts forward novel evidence for a U-shaped relation, across countries, over time as well as in a panel setting for different reform measures and a wide range of estimators. Partial demo...

The relationship between economic and political liberalization has received a great deal of attention lately, yet the possibility of a nonlinear relationship and the role of reversals remain largely neglected. Focusing on democratization and financial reform, this paper offers evidence for a U-shaped relationship across countries, over time as well...

Why do workers change occupations? This paper investigates occupational mobility and its determinants following a large unexpected shock (communism's collapse in 1989.) Our calculations show that from 1989 to 1995 between 35 and 50% of Estonian workers changed occupations (classified at one- and four-digits, respectively.) Among the main determinan...

What are the main causes of international terrorism? The lessons from the surge of academic research that followed 9/11 remain elusive. The careful investigation of the relative roles of economic and political conditions did little to change the fact that existing econometric estimates diverge in size, sign and significance. In this paper we presen...

Although the theoretical literature has identified a large number of sizeable benefits from foreign direct investment (FDI), the empirical literature has failed to establish a significant unconditional positive impact of FDI inflows on economic growth. One reason for this inconsistency is that theory tends to equate FDI to technology transferred, w...

In their survey of the literature on ethnic fractionalization and economic performance, Alesina and La Ferrara (JEL 2005) identify two main directions for future research. One is to improve the measurement of diversity and the other to treat diversity as an endogenous variable. This paper tries to address these two issues. We study the effects of e...

In their survey of the literature on ethnic fractionalization and economic performance, Alesina and La Ferrara (JEL 2005) identify two main directions for future research. One is to improve the measurement of diversity and the other to treat diversity as an endogenous variable. This paper tries to address these two issues: it investigates the effec...

Argentina is the only country in the world that was �developed� in 1900 and �developing� in 2000. Although various underlying reasons have been identified (chiefly political instability, financial development, inflation, trade openness, and international financial integration), no study has quantitatively assessed their relative importance. This pa...

This paper investigates the effects of financial development and political instability on economic growth in a power-ARCH framework with data for Argentina from 1896 to 2000. Our findings suggest that (i) informal or unanticipated political instability (e.g., guerrilla warfare) has a direct negative impact on growth; (ii) formal or anticipated inst...

This paper uses a unique data set of Latin American paintings auctioned by Sotheby's between 1995 and 2002 to investigate several puzzles from the recent auctions literature. Our results suggest that: (i) the reputation of an artist and the provenance of the artwork, often omitted variables in previous studies, seem to be more important determinant...

This paper investigates the role of structural reforms – privatization, financial reform and trade liberalization – as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main finding is a strong empirical relationship from reforms to...

We investigate the growth volatility-political instability relationship in a power-ARCH framework (for Argentina, 1896-2000). Main finding is that while "informal" political instability (e.g., assassinations) has a direct negative effect on economic growth, "formal" instability has an indirect impact (through growth volatility).

This paper calculates indices of central bank autonomy (CBA) for 163 central banks as of end-2003, and comparable indices for a subgroup of 68 central banks as of the end of the 1980s. The results confirm strong improvements in both economic and political CBA over the past couple of decades, although more progress is needed to boost political auton...

What are the main barriers to firm entry and exit in developing countries and how do they differ from barriers to firm operation and growth? How important is the institutional and regulatory framework in this respect? This paper examines such questions using case-study evidence from the Brazilian textiles and electronics industries. We find that no...

Does fractionalization change over (short periods of) time? If so, are there any substantial implications for economic performance? To answer such questions, we construct a new panel data set with measures of ethnic, linguistic, and religious fractionalization for 26 former communist countries covering the period from 1989 to 2002. Our fractionaliz...

How does the relationship between earnings and schooling change with the introduction of comprehensive economic reform? This article sheds light on this question using a unique data set and procedure to reduce sample-selection bias. The evidence is from consistently coded, nonretrospective data for about 4 million Hungarian wage earners. Returns to...

Conventional wisdom is that lobbying is the preferred mean for exerting political influence in rich countries and corruption the preferred one in poor countries. Analyses of their joint effects are understandably rare. This paper provides econometric evidence on lobbying, corruption and influence using data for almost 4000 firms in 25 transition co...

We examine the effect of political [`]institutions' on economic growth volatility, using data from more than 100 countries over the period 1960 to 2005, taking into account various control variables as suggested in previous studies. Our indicator of volatility is the relative standard deviation of the growth rate of GDP per capita. The results of a...