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Governance Convergence Among the EU28?

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Abstract

The paper attempts to detect trends of convergence in terms of governance among the EU member-states. This is an issue that has not hitherto been examined. The empirical analysis provided utilizes the worldwide governance indicators, employs the methodological approach of convergence clubs and covers the period 1996–2012. Findings reported herein point to clear trends of convergence. With the notable exceptions of some lead countries, the vast majority of EU member-states tend to form one convergence club in each of the six governance indicators considered. Yet, there are still appreciable differences. By and large, the northern and the western EU member-states exhibit significantly larger values compared to the southern and the eastern ones. This means that despite the convergence trends detected, notable divisions among the EU member-states still remain.

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Notes

  1. Intuitively, the term ‘convergence’ suggests a process whereby poor(er) countries catch-up to rich(er) ones (Abreu et al. 2005).

  2. See, the neoclassical model of exogenous growth (Solow 1956; Swan 1956, inter alia), the neoclassical theory of trade (Heckscher 1919/1991; Ohlin 1933/1966, inter alia) and the neoclassical theory of factor movement (Borjas 1989; Greenwood et al. 1991, inter alia).

  3. Broadly speaking, institutions encapsulate the set of legal and social norms that underlie economic activity and human behavior, in general (Huntington 1965). Formal institutions refer, primarily, to written rules (such as constitutions and laws) enforced by impersonal (i.e., State) mechanisms, whereas informal institutions refer, primarily, to unwritten rules (such as traditions and norms) enforced by personal (i.e., social) mechanisms.

  4. Acquis communautaire refers to the corpus of EU laws and policies.

  5. This is especially so after 2004. Indeed, in the case of the new EU member-states (i.e., acceded after 2004) EU accession goes-in-hand with institutional harmonization (Grabbe 2001).

  6. Not disregarding the fact that institutional harmonization is a necessary step towards political unification (Lindberg 1963).

  7. Though such an effort may be hindered by local elites (Acemoglu and Robinson 2006, 2008).

  8. World Bank (1989, 1992) defined governance as ‘the exercise of political power to manage a nation’s affairs’ and as ‘the manner in which power is exercised in the management of a country’s economic and social resources for development’. OECD (2001), accordingly, defined governance as ‘the exercise of authority in government and the political arena’.

  9. Even though there is a highly-related body of literature that stresses out the convergence-inducing role of processes highly-related to governance (such as lesson-drawing, imposition, harmonization, emulation, policy promotion, corporate governance, pubic spending and government quality) (Dolowitz and Marsh 2000; Simmons and Elkins 2004; Drezner 2005; Skidmore et al. 2004; Jordan 2005; Knill 2005; Cao 2012; Matos and Faustino 2012, Ezcurra and Rios 2013; Heckelman and Mazumder 2013, inter alia).

  10. See http://info.worldbank.org/governance/wgi/index.aspx#home.

  11. Composite indicators are increasingly recognized as useful tools in analysis and public communication. This is because they are able to capture and describe complex concepts with a simple measure that can be used to benchmark performance and to assist comparisons. Composite indicators, however, do stir controversy, since their use presents advantages and disadvantages (Saisana and Tarantola 2002; Nardo et al. 2005; Saisana et al. 2005). It is out of the scope of the paper to delve into questions regarding the usefulness and reliability of the WGI as well as into the discourse concerning theoretical issues associated with the notion of governance (Kooiman 2003; Treib et al. 2007).

  12. The value for the EU is the average of annual average values that correspond to each EU member-state.

  13. Unconditional β-convergence is the outcome of the negative and statistically significant relation between the initial value of the variable under consideration and the corresponding subsequent growth rate of the countries considered. Conditional β-convergence is the outcome of the negative and statistically significant relation between the initial value of the variable under consideration and the corresponding subsequent growth rate of the countries considered, ceteris paribus. σ-convergence is the outcome of the diachronic decrease of the dispersion in terms of the values of the variable under consideration of the countries considered.

  14. Including the lead country.

  15. Empirically, there is a variety of convergence clubs methodological approaches (such as transition matrices, Markov chains, regression trees and threshold regressions). The methodological approach employed in the present paper provides a generalization of the β-convergence methodological approach.

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Authors and Affiliations

  1. Department of Economics, University of Thessaly, Volos, Greece

    Ageliki Anagnostou & Christos Kollias

  2. Department of Planning and Regional Development, University of Thessaly, Volos, Greece

    Dimitris Kallioras

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  1. Ageliki Anagnostou
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Anagnostou, A., Kallioras, D. & Kollias, C. Governance Convergence Among the EU28?. Soc Indic Res 129, 133–146 (2016). https://doi.org/10.1007/s11205-015-1095-2

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