Abstract
This paper explores the relationship between the rhetoric of the Lisbon Goal of the EU and key insights from trade theory and growth theory. It argues that the policy initiative as such is valid, but the paradigm of international competitiveness is potentially misleading. The focus should, instead, be on productivity. Industrial policies, while potentially valid against the backdrop of recent developments in growth theory, are subject to pitfalls in practice. Policies focusing on institutions are more promising. The paper offers a framework for discussing the role of different types of institutions with respect to the Lisbon Goal.
Similar content being viewed by others
References
Acemoglu, D., “Root causes: A historical approach to assessing the role of institutions in economic development.” Finance and Development, vol. 40, pp. 27–30, 2003.
Acemoglu, D., Johnson, S., and Robinson, J.A., “The colonial origins of comparative development: An empirical investigation.” American Economic Review, vol. 91, pp. 1369–1401, 2001.
Agell, J., “On the determinants of labour market institutions: Rent-seeking versus social insurance.” German Economic Review, vol. 3, pp. 107–135, 2002.
Aiginger, K. and Landesmann, M., “Competitive Economic Performance: The European View.” Vienna: WIFO Working Paper 179, 2002.
Alesina, A. and Glaeser, E., “Fighting Poverty in the US and Europe: A World of Difference.” Oxford University Press: Oxford, 2004.
Baily, M.N. and Kirkegaard, J.F., “Transforming the European Economy.” Institute for International Economics: Washington, District of Columbia, 2004.
Bardhan, P., “Institutions matter, but which ones?” Economics of Transition, vol. 13, pp. 499–532, 2005.
Bayoumi, T., Laxton, D., and Pesenti, P., “Benefits and Spillovers of Greater Competition in Europe: A Macroeconomic Assessment.” NBER Working Paper 10416, 2004.
Bhagwati, J., Panagariya, A., and Srinivasan, T.N., “The muddles over outsourcing.” Journal of Economic Perspectives, vol. 18, pp. 93–114, 2004.
Blanchard, O., “The economic future of Europe.” Journal of Economic Perspectives, vol. 18, pp. 3–26, 2004.
Blanchard, O., “European Unemployment: The Evolution of Facts and Ideas.” Economic Policy, pp. 5–59, January 2006.
Blanke, J., Paua, F., and Sala-i-Martin, X., “Global competitiveness index: Analyzing key underpinnings of sustained economic growth.” in Michael E. Porter et al. (eds.), Global Competitiveness Report 2003–2004 of the World Economic Forum. Oxford University Press: Oxford, pp. 3–28, 2004.
Broadbent, B., Schumacher, D., and Schels, S., “No Gain Without Pain—Germany’s Adjustment to a Higher Cost of Capital.” Goldman Sachs Global Economic Papers, vol. 103, 2004.
Carr, N.G., “It Doesn’t Matter.” Harvard Business Review, pp. 41–49, May 2003.
Cotis, J.P., “Growing pains: Dissecting the causes of Europe’s lagging economic performance.” Finance and Development, vol. 41, pp. 16–19, 2004.
Daly, K., “Euroland’s Secret Success Story.” Goldman Sachs Global Economic Papers, vol. 102, 2004.
Deardorff, A.V. and Stern, R.M., “EU Expansion and EU Growth.” Research Seminar in International Economics Discussion Paper No. 487, The University of Michigan, 2002.
Directorate-General for Economic and Financial Affairs, “The Economic Costs of non-Lisbon.” European Economy. Occasional Papers. Nr. 16, European Commission, 2005.
Felbermayr, G., “Specialization on a Technologically Stagnant Sector Need Not Be Bad for Growth.” Eberhard Karls University Tübingen, mimeo, 2006, Oxford Economic Papers (in press).
Freeman, R.B., “Single-peaked versus diversified capitalism: The relation between economic institutions and outcomes.” in Drèze J.H. (ed.), Advances in Macroeconomic Theory. London (Palgrave Macmillan), 2002.
Gordon, R.J., “Two Centuries of Economic Growth: Europe Chasing the American Frontier.” CEPR Discussion Paper 4415, 2004a.
Gordon, R.J., “Why was Europe Left at the Station when America’s Productivity Locomotive Departed?” CEPR Discussion Paper 4416, 2004b.
Grossman, G.M. and Helpman, E., “Innovation and Growth in the Global Economy.” MIT: Cambridge, Massachusetts, 1991.
Jorgensen, D.W., Mun, S.H., and Stiroh, K.J., “Lessons for Europe from the U.S. growth resurgence.” CESifo Economic Studies, vol. 49, pp. 27–47, 2003.
Krugman, P.R., “Competitiveness: A dangerous obsession.” Foreign Affairs, vol. 73, pp. 28–44, 1994.
Krugman, P.R., “Making sense of the competitiveness debate.” Oxford Review of Economic Policy, vol. 12, pp. 17–25, 1996.
Lewis, W.W., “The Power of Productivity.” University of Chicago Press: Chicago and London, 2004.
Lindert, P., “Growing Public: Social Spending and Economic Growth since the Eighteenth Century, 2 vols.” Cambridge University Press: Cambridge, 2004.
Llewellyn, J., “Tackling Europe’s competitiveness.” Oxford Review of Economic Policy, vol. 12, pp. 87–96, 1996.
Lucas, R., “On the mechanics of economic development.” Journal of Monetary Economics, vol. 22, pp. 3–42, 1988.
Maddison, A., “The World Economy: A Millennial Perspective.” OECD Development Centre: Paris, 2001.
Maddison, A., “The World Economy: Historical Statistics.” OECD Development Centre: Paris, 2003.
McGiven, A., “European Potential: A Research Paper.” UBS, Global Asset Management: London, 2002.
Nicoletti, G. and Scarpetta, S., “Regulation, productivity and growth: OECD evidence.” Economic Policy, pp. 9–72, April 2003.
O’Mahony, M., and van Ark, B., “EU Productivity and Competitiveness: An Industry Perspective. Can Europe Resume the Catching-up Process?” DG Enterprise, European Union: Luxembourg, 2003.
Pisani-Ferry, J., “Speeding up European reform: A master plan for the Lisbon process.” CESifo Forum, vol. 6, pp. 21–35, 2005.
Porter, M.E., “Building the microeconomic foundations of prosperity: Findings from the business competitiveness index.” in Porter, M.E. et al. (eds.), Global Competitiveness Report 2003–2004 of the World Economic Forum. Oxford (Oxford University Press), pp. 29–56, 2004.
Rodrik, D. and Subramanian, A., “The primacy of institutions (and what this does and does not mean).” Finance and Development, vol. 40, pp. 31–34, 2003.
Rodrik, D., Subramanian, A., and Trebbi, F., “Institutions rule: The primacy of institutions over geography and integration in economic development.” Journal of Economic Growth, vol. 9, pp. 131–165, 2004
Sachs, J., “Institutions matter, but not for everything.” Finance and Development, vol. 40, pp. 38–41, 2003.
Samuelson, P.A., “Where Ricardo and Mill Rebut and confirm arguments of mainstream economists supporting globalization.” Journal of Economic Perspectives, vol. 18, pp. 135–146, 2004.
Sapir, A. et al., “An Agenda for a Growing Europe—The Sapir Report.” Oxford University Press: Oxford, 2004.
Seabright, P., “National and European champions—Burden or blessing?” CESifo Forum, vol. 6, pp. 52–55, 2005.
Van Ark, B. and Inklaar, R., Catching up or Getting Stuck? Europe’s Trouble to Exploit ICT’s Productivity Potential. Groningen Growth and Development Centre, Research Memorandum GD-79, 2005.
Van Ark, B., Inklaar, R., and McGuckin, R.H., “ICT and productivity in Europe and the United States: Where do the differences come from?” CESifo Economic Studies, vol. 49, pp. 295–318, 2003.
Author information
Authors and Affiliations
Corresponding author
Additional information
This paper goes back to a joint presentation with Mario Nava at the Diplomatic Academy of Vienna—40th Anniversary Symposium “A Changing Europe in a Changing World” June 24–25, 2004.
Rights and permissions
About this article
Cite this article
Kohler, W. The “Lisbon Goal” of the EU: Rhetoric or Substance?. J Ind Compet Trade 6, 85–113 (2006). https://doi.org/10.1007/s10842-006-9473-8
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10842-006-9473-8