Abstract
The objective of this article is to analyse the recent evolution of European neighbouring countries in different dimensions related to economic performance (measured in a broader sense), social progress and institutional reforms. With this aim, we design and build a composite indicator to measure these different dimensions. Next, the index is used to characterise the relative evolution of neighbouring countries compared to a wide sample of developed and developing economies. We also test whether a convergence process has taken place in these different dimensions controlling for the potential effect of the European neighbourhood policy. The obtained results show different trends according to the considered dimensions and heterogeneous effects at the country level. From a policy perspective, these results reinforce the validity of the bilateral action plans that have characterised ENP recognising the different starting point and particular characteristics of each neighbouring country.
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Notes
Groh and Wich (2012).
As noted by an anonymous referee, equal weighting together with the linear aggregation rule imply that all indicators are perfect substitutes. This means that a decrease of one point in a sub-index can be compensated by a similar increase in another sub-index. The implications of the assumption of compensability have been in-depth analysed by Munda and Nardo (2009).
The correlation of the ISEPI index with GDP per capita for the 76 analysed countries is 0.73, with the Human Development Index 0.82, with the World Economic Forum Global Competitiveness Index is 0.89 (common sample of 75 countries) and with the IMD Competiveness index is 0.84 (common sample of 54 countries).
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Acknowledgments
The research leading to these results has received funding from the European Community’s Seventh Framework Programme (FP7/2010-2.2-1) under Grant Agreement No. 266834.
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López-Tamayo, J., Ramos, R. & Suriñach i Caralt, J. Economic performance, social progress and institutional reform in European neighbouring countries. Ann Reg Sci 60, 613–636 (2018). https://doi.org/10.1007/s00168-016-0785-2
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DOI: https://doi.org/10.1007/s00168-016-0785-2