Issue 52 – Spring 2022

This note summarizes the highlights of the eighth cohesion report, on report on the economic, social and territorial cohesion of the European Union, which has recently come to light.

This paper studies deprivation dynamics at the subnational level, introducing a Local Multidimensional Poverty Index (LMPI), and focusing on multidimensional poverty in Ecuador and Uruguay between the last two available censuses, 1990–2010 and 1996–2011, respectively. As a first step, we construct the LMPI at the municipal level using microdata from both counties. Subsequently, we explore spatial and temporal dynamics through a set of tools such as the salter graph, Moran’s I, Moran scatterplot, and spatial transition matrix. The results indicate that compared to Ecuador, Uruguay was initially in a better position in terms of the LMPI. However, Ecuador achieved a generalized reduction of the LMPI during the period of analysis, reaching levels close to that of Uruguay. Nevertheless, spatial persistence in the LMPI is observed.

The theory of fuzzy sets provides a referential framework for measuring poverty under a multidimensional approach. This theory replaces the poor or non-poor dichotomy, by the gradual belonging to the group of the poor. The objective of the research is to propose an alternative method for measuring multidimensional poverty in Ecuador. Three poverty rates are developed using fuzzy sets and the capabilities approach, in addition, a spatial analysis of poverty is carried out at the provincial level. The main results show that public policies must be prioritized towards housing and work, and no spatial dependency or multidimensional poverty clusters are identified.

This paper investigates the existence of specific patterns of survival in the case of the businesses created by self-employed immigrants compared to those driven by national self-employed. The analysis uses a database made up of all the businesses incubated by public support services developed by the Andalucía Emprende Foundation (Ministry of Employment, Training and Self-employment of the Regional Government of Andalusia) in the period 2009-14. The results show that the chances of survival of immigrant businesses are lower than that of national promoters even after controlling for territorial characteristics, the characteristics of the business projects and the personal characteristics of the self-employed. It is also observed that the educational level of promoters increases business survival, having a significantly larger effect in the case of the immigrant self-employed.

Since innovation is a productivity driver that leads to economic growth, the case of a developing country, Ecuador, is studied. The aim of this paper is to measure the causal effect of innovation on firms’ productivity by distinguishing the type of innovation, namely, in products, in process, in organization and in marketing. To do so, an endogenous switching model is estimated using the Science, Technology and Innovation Activity Survey. The results indicate that the productivity loss is higher for innovating firms if they stop innovating than the productivity gain of non-innovating firms if they engage in innovation. The difference between the productivity losses and gains depends on the type of innovation.

In most countries, measures are being implemented to reorganise the institutional structures through which public services are provided. These reforms seek to reconcile the increased pressure on protection systems with their sustainability, but also to improve their efficiency and proximity to citizens. Recently, Gipuzkoa has promoted the revision of the territorial governance model to improve care for people in situations of exclusion and vulnerability. This article looks at the main limitations of the new regional governance model for improving social inclusion, identifying some lessons that can be extended to other territories that carry out similar processes. These should especially include the need for a clear public commitment and leadership, and a commitment to professional figures and structures of a county and/or local nature that coordinate resources and social agents.

This paper presents evidence of the influence of political competition on the behavior of fiscal policy in argentine provinces from 1987 to 2015. Contrary to the predominant theory and empirical evidence from subnational districts my estimations of a dynamic panel data show that political competition is associated with increases in public outlays and changes in its composition. This finding is strongly related to the large vertical fiscal imbalances that characterize the argentine fiscal federalism. I conjecture that governors use the additional low-cost spending power given by federal transfers to feed clientelistic networks, increase public employment and direct subsidies to constituencies, thus enhancing their chances to remain in office.