Entrepreneurship and employment

Jerzy Cieślik

Abstract:

The article discusses the issue that has been subject of a lively debate in the economic

literature since the late 1970s, namely the types of companies that generate new jobs, and thus

contribute to a decline in unemployment. This debate has been adversely affected by

methodological flaws: failure to account for indirect forms of economic activity, a simplistic

classification of enterprises according to their size and differences in measurement methods,

in particular with regard to solo entrepreneurs. The author proposes an alternative

methodological approach; the suggested concepts and measurement methods are reviewed on

the basis of statistical data on employment and demography in Poland. On this basis,

economic policy recommendations are formulated.

Keywords:

entrepreneurship, job creation, solo entrepreneurs, hybryd entrepreneurs, micro-employers

Bio:

Prof. Jerzy Cieślik graduated in 1971 from the Warsaw School of Economics. In 1976 he

obtained a PhD degree in economics (international economic relations) and habilitated in

1988. He served as Professor of the Warsaw School of Economics until 1990.

In the years 1983-1989 Prof. Cieslik was involved in a number of consultancy and advisory

projects, working both for companies in Poland as well as in a number of countries of Africa

and Asia as an expert for international organizations within UN system (UNIDO, UN Centre

on Transnational Corporations and World Tourism Organization). He assisted the government

institutions in developing countries in making more efficient the process of technology

transfer, strengthening their negotiating position vis-a-vis foreign investors and implementing

specialized information systems, supporting decision-making processes.

In 1990 he suspended his academic career in order to build the Ernst & Young organization in

Poland. During 1990 – 2003 he served as Board Member and Managing Partner of Ernst &

Young Poland. He is a licensed tax advisor.

In 2004 he became Professor at the Kozminski University, specializing in high-potential

entrepreneurship (international, technology-based entrepreneurship). Author of the

textbook (in Polish) “Ambitious Entrepreneurship. How to Start Your Own Business)", 2010

www.cieslik.edu.pl . Currently he serves as Director of the Center for Entrepreneurship at the

Kozminski University.

Prof. Jerzy Cieslik coordinates Academic Network of Entrepreneurship Educators in Poland

(SEIPA). He is a member of the National Entrepreneurship Council, appointed by the

Minister of Economy of Poland.

How to improve management education for the purpose of future socio-economic

development?

Eric Cornuel

Abstract:

This chapter discusses (1) how management education can support socio-economic

development, and (2) how management education can be improved. On the one hand, I claim

that management education actually contributes to socio-economic development by (a)

producing qualified managers, by (b) helping companies to better evaluate managers and by

(c) promoting inter-enterprise mobility. To illustrate my arguments, I build upon my extensive

experience where I could, both as a business school Dean and as a researcher, observe some

challenges to socio-economic development in Central and Eastern European countries. On the

other hand, I suggest that (a) cooperation among education institutions in sharing resources,

curricula or diploma as well as (b) a philosophical view of continuously improving the

existing systems and respecting individual autonomy and accountability – as emphasized by

the social Catholic thought – in fact aid to improve management education. While I build on

my experience as Director General at EFMD to emphasize the role of collaborations between

business schools, I develop some philosophical considerations by having a closer look at the

Catholic social thought and its relevance within organizations and management. Finally, I

conclude this chapter by developing some perspectives for management education in the

future and business schools in Europe.

Keywords:

Management education, socio-economic development, managers, mobility, cooperation

Bio:

Eric Cornuel is the Director General & CEO of EFMD in Brussels since 2000. He holds a

degree of Sciences Po from IEP Paris, an MBA from HEC Graduate School of Management,

Paris, and a DEA in strategy and management from Paris Nanterre University, together with a

Doctoral Certificate in Strategy from HEC Graduate School of Management Paris and a PhD

in management, written on international network organizations, from Paris Dauphine

University. He was awarded a honorary professorship for his achievements there. From 1996

to the present, Eric Cornuel has been affiliate Professor at HEC Graduate School of

Management, Paris. He has taught for 15 years at various management schools in Europe and

Asia, including the Catholic University of Louvain. He serves on the board of various

associations and companies.

A new political economy – for development

László Csaba

Abstract:

This essay is an attempt to offer some suggestions of how the post-transition ebbing out of

growth could be overcome. The diagnosis consists of four, the therapy of seven, theses.

Analyzing long term factors, the challenge of good governance and improved institutional

quality come to the fore. The ephemeral impact of EU and EMU accession is being

underscored.

Keywords:

new political economy, convergence, soft factors of growth, quality of governance, new

member states/of the EU

Bio:

Professor of international political economy/Central European Univerity and Corvinus

University of Budapest/ and full member of the Hungarian Academy of Sciences. This paper

is written for the 20th anniversary conference of the Kozminski Univerity of Management,

entitled Management and Economic Policy for Development’ Warsaw, 9-10 October, 2013.

Comments are encouraged and welcome, for availabilities and more on the author cf his

website: www.csabal.com

How does foreign direct investment affect domestice enteroreneurship

Saul Estrin

Abstract:

This paper explores how foreign direct investment (FDI) inflows affect domestic

entrepreneurship. The empirical work is based on a micro-panel of more than two thousand

individuals in each of seventy countries including both developed and developing economies.

The FDI literature has not yet determined whether spillovers from FDI to entrepreneurship

will be positive, because, for example, of technological and human capital dissemination, or

negative, because, for example, of crowding out of human and financial resources. Our

analysis covers the period from 2000 to 2009. The results indicate that the relationship

between FDI inflows and domestic entrepreneurship is in fact negative. Thus while FDI may

bring many positive benefits to the host economies, there is an unfortunate side effect, namely

that domestic entrepreneurial activities are reduced. Policy makers who are concerned to

encourage domestic entrepreneurship, for example to increase employment or to stimulate

economic growth, need to be aware of this danger when framing their foreign direct

investment policies.

Keywords:

foreign direct investment, entrepreneurship, spillovers

Bio:

Saul Estrin is a Professor of Management and Vice-Dean of the TRIUM Global EMBA

Programme. He was formerly Adecco Professor of Business and Society at London Business

School where he was the Research Director of the Centre for New and Emerging Markets and

Director of the CIS Middle Europe Centre. Saul was also Deputy Dean (Faculty and

Research) at London Business School for six years and a School governor for eight years. .

He has been a consultant to the World Bank, European Union and OECD, DfID and NERA.

He has taught executive programmes for a large number of major companies including BA,

BT, Lloyds TSB, Marks and Spencer, Vauxhall, Powergen, Deutsche Bank, ING Barings,

Swedbank and ABN-AMRO Bank.

Saul Estrin has been a visiting Professor at Stanford University, Michigan Business School,

Cornell University and the European University Institute. He is a Fellow of the Centre for

Economic Policy Research, the IZA and the William Davidson Institute. He has published

numerous papers in scholarly journals and edited, for several years, Economic Policy and

Business Strategy Review

Please access the attached hyperlink for an important electronic communications disclaimer:

http://lse.ac.uk/emailDisclaimer

The future of finance. Lessons from the crisis for banks and enterprises.

Stanisław Flejterski

Małgorzata Porada-Rochoń

Abstract:

The main aim of the study is to outline the relations between regulation, deregulation and

reregulation of the banking sector. Recently, the structure of banking and finance has changed

fundamentally. The events of the past few years have proven that risk-taking in banking can

bring about significant costs for the economy. A safer banking system would mean restricted

lending services and prove a stumbling block to economic growth. The study proves that a

change in the banking regulation paradigm is necessary. In the years to come, the

development of banking sectors and financial markets will depend on curtailing political

uncertainty, improving cooperation between regulators and banks, and introducing more

efficient regulations. It is of utmost importance for the economic future of businesses.

Keywords:

Finance, banking, business, crisis economics

Bio: Professor Stanisław Flejterski – PhD, University of Szczecin, head of the Department of

Comparative Banking and Finance, member of the Finance Committee of the Polish Academy

of Sciences

Małgorzata Porada-Rochoń - PhD, University of Szczecin, Faculty of Management and

Service Economics, Department of Business Economics

Russian Economy: Between Despair and Hope

Ruslan Grinberg

Abstract:

Russia's economy is beginning to stagnate. GDP growth slowed to 2 percent per year (2013).

And, apparently, downward trend will continue in the next year. But GDP in the last twelve

years grew rapidly (7 percent per year) with the exception of a recession in 2008-2009.

Today, the average monthly income of adult resident is U.S. $ 1,000. Compared with 2000

there has grown significantly middle class (from 10% to 25% of the population). In Russia

there is no deficit in the state budget. Public debt, unlike most countries in the European

Union is no longer a problem for the local economy (12% of GDP). Russia ranked third in the

world in foreign exchange reserves (about 600 billion dollars) and has a relatively low

unemployment rate – 6, 5%. However, the country faced with three major problems which

have seriously hampered its development. First, it is a primitivisation of the structure of the

new economy that has been growing mainly due to the export of energy resources and raw

materials and the high world oil prices. Secondly, it is scandalous for a civilized country to

put up with a huge personal income gap between the few rich (10%) and the poor majority of

the population (60 - 65%). Third, there is a insufficient control over the power structures of

the country – the lack of checks and balances, and as a result – a powerful bureaucratic

oppression of the economic agents and the high level of corruption.

To stop the trend of de-industrialization of the country is badly needed the active sustained

public industrial policy. In order to give the economy a "human face" there is need to abandon

the flat-rate personal income tax, restore a progressive tax system and to increase the level of

public funding of culture, science, education and health care. Lastly, we must overcome the

"atomization" of Russian society and block authoritarian trends in the country's governance

through developing institutions of political competition and civil society.

Keywords: Market fundamentalism; transformation; fuel and raw material orientation; institutional

failure.

Bio:

Director of the Institute of Economics оf the Russian Academy of Sciences, Corresponding

member of the Russian Academy of Sciences, Professor, Doctor in Economics

Impact of Basel III/CRD4 on the situation in the banking sector

Krzysztof Kalicki

Jan Antczak

Abstract: This article provides an overview of new regulatory initiatives in the banking sector in the

aftermath of the recession that started in 2007 in the real estate market in the United States.

The package of new regulations, known in the banking environment as Basel III, includes, in

particular, strengthening the capital base of banks, improving the liquidity profile of the sector

and reducing the leverage used by banks in their activities. In addition to Basel III package,

the additional regulations are being discussed: the introduction of clearing houses (EMIR

regulation), the introduction of taxes on banking activities, etc. Deep reformation of

regulatory solutions will undoubtedly have a significant impact on banks' operating costs,

results achieved and return on shareholders. Because of its special place in the economic

system, changes in regulations may have a significant impact on the economic development

of countries. This indicates a direct negative impact of Basel III package on the GDP growth

rates through the mechanism of the growth in interest margins and reducing the flow of

money into the economy. On the other hand, the new regulations are designed to reduce the

systemic risk generated by the activities of banks. Therefore, the advantage of the new

regulations will be the decrease in the probability of a banking crisis in the economy, thus

avoiding the costs associated with the recession. The article's summary includes an analysis of

the benefits and xcosts resulting from an increase in the equity relationships in the Polish

banking sector.

Key words: Banks, regulations in the banking sector, the capital ratio, the costs of regulation in the

banking sector, Basel 3 / CRD 4

Bio:

Krzysztof Kalicki, PhD is the CEO of Deutsche Bank Poland SA and a lecturer in the

Department of Finance of Leon Koźmiński Academy in Warsaw.

Jan Antczak PRM, CFA, risk management expert. Head of risk department at Deutsche Bank

Polska S.A.

The New Pragmatism, or Economics and Economic Policy for the Future

Grzegorz W. Kołodko

Abstract

Not only is economics a means of interpreting the past and analysing the present, but it must

become an instrument that can be used to read and shape the future. On the one hand, it should

show the development of inevitable future socio-economic processes, with their links to culture

and technology, politics and the environment, for which we need to be properly prepared well

in advance. On the other hand, the economics of the future must reveal the conditions and

mechanisms of the phenomena and processes that might occur. With theoretical knowledge of

this area, knowledge-based policies and strategies of economically, socially and

environmentally sustainable development can be put in place. In the future, heterodoxy is bound

to dominate, and economics itself is likely to become increasingly more interdisciplinary.

Future generations need economics of moderation and a theory describing it, as opposed to the

thus far prevailing economics of either deficiency or excess. We need the New Pragmatism.

Keywords:

New pragmatism, economic policy, growth, development, future

Bio:

Professor Grzegorz W. Kołodko, intellectual and politician, a key architect of Polish

economic reforms. Member of the European Academy of Arts, Sciences and Humanities.

Deputy Prime Minister and Minister of Finance in 1994-97 and 2002-03. Director of TIGER –

Transformation, Integration and Globalization Economic Research at Kozminski University.

Photographer, marathon runner, and globetrotter who’s explored 160 countries.

Managerial contribution to growth in transition economies

Andrzej K. Kozminski

Abstract:

The article explores the impact of management quality on economic growth in post-socialist

transition countries. The author refers to the results of the World Management Survey and

explains the place of Polish companies in this study. The article presents the sequence of

management development phases in transition economies. Cultural changes associated with

this process are subject to detailed analysis. Transitional leadership is presented as a major

factor inducing these changes. On the basis of his research, the author conceptualizes

transformational leadership.

Keywords:

Management quality, post-socialist system transformation, transformational leadership,

economic growth, stages of management development

Bio:

Professor Andrzej K. Koźmiński, the founder and the first Rector (1993-2011) and now the

President of Kozminski University, chairman of the Board of Trustees of KU, the President of

the Board of the International Business School in Warsaw. He is a corresponding member of

the Polish Academy of Sciences. Prof. Koźmiński is an elected member of the International

Academy of Management, of Academie Europeane and Academie des Commerciales in Paris,

as well as of the Scientific Society of Warsaw. He was a Deputy President of the Central and

the East European Management Development Association, he was a member of the Board of

the European Foundation for Management Development based in Brussels and a member of

the International Committee of the American Association of Collegiate Schools of Business.

He is a member of the Presidium of the Organization and Management Sciences Committee

of the Polish Academy of Sciences and a member of the President’s of the Republic of Poland

Advisory Council for Education and Scientific Research. Also, he is a Chairman of the

Supervisory Board of Telekomunikacja Polska SA and a member of the Supervisory Board

of Millennium Bank.

Development prospects for hyper-growth companies in Poland – the Silicon Valley

experiences

Dominika Latusek-Jurczak

Abstract:

The chapter debates the processes of creating hyper-growth ventures. It is based on a

qualitative long-term field study conducted among Polish entrepreneurs aspiring to join

Silicon Valley entrepreneurial environment. Characteristics of Silicon Valley, a home to many

technology start-ups, are described. Against this background the issue of for building similar

firms in Poland is being discussed.

Keywords:

Start-ups, entrepreneurship, technology, Silicon Valley, Poland.

Bio:

Dominika Latusek-Jurczak – associate professor at the Department of Management at

Kozminski University. She also is a visiting researcher at Institute for Research in Social

Sciences at Stanford University, and she previously conducted research as Fulbright scholar

(2007/2008) at Department of Sociology at Stanford. She also a laureate of scholarships for

outstanding young scholars funder by the Polish Minister of Science and Higher Education.

She has conducted qualitative field studies in companies in Poland, Germany, Sweden and

SIlicon Valley in the US. Her fields of interest include high-growth venture creation,

interorganizational relations and trust within and between organizations.

Systemic effects of internationalization of Polish companies

Prof. Krzysztof Obłój, Mariola Ciszewska-Mlinarič, Ph.D.

Abstract: Internationalization of Polish firms, both passive and active, is a relatively new phenomenon.

Since the beginning of the 1990s we are observing accelerated integration of the Polish

economy with the global economy, in terms of both international trade and Foreign Direct

Investment. The process is crucial and results in multidimensional implications on economic

and social development. The chapter begins with a discussion on multidimensionality of

development concept. Then we present the current state of internationalization of Polish

economy and main international business (IB) theories. The following part includes systemic

effects of this process.

On the basis of currently existing theories, we point out most important effects of

internationalization for socio-economic development, both at the firm level (efficiency

improvement, development of resources, and learning outcomes) and at the level of domestic

environment (diffusion - spillover effects). The overview of empirical research confirms the

existence of above listed effects among Polish companies, which is crucial in theoretical and

practical terms.

Keywords:

Internationalization of the Polish economy, systemic effects of internationalization,

efficiency, resource development, learning, spillover effects.

Bio:

Krzysztof Obloj, Ph.D., former president of European International Business Academy, is an

advisor to the President of Poland, B. Komorowski, and distinguished professor of Strategic

and International Management. He holds chairs of Strategic Management departments at

School of Management of University of Warsaw and Kozminski University. He has regularly

taught Bodo Graduate School of Management in Norway, ESCP-EAP in Paris, and Henley

Management College in UK. As a visiting professor he taught in the USA at University of

Illinois at Urbana Champaign, Yale University, Central Connecticut State University and

Duquesne University. Professor Krzysztof Obloj is a renown corporate speaker and consultant

in Poland and advises numerous Polish and international firms (e.g. LPP, PKN, Asea Brown

Boveri, LG, Benckiser, Beiesdorf) in the areas of strategy, structure and organizational

culture. He is a member of three supervisory boards of large joint stock companies listed in

Poland.

Mariola Ciszewska-Mlinarič is assistant professor of strategic management at Kozminski

University and visiting professor at foreign universities: MCI Management Center Innsbruck

in Austria and ESSCA – École de Management in France. Her research interests evolve

around the topic of organizational strategy, strategic decision making, adaptive capabilities,

and most recently - internationalization of SMEs. She has published a number of papers in

Polish and international journals and co-authored two monographies in the field of strategic

management. At present she works on her habilitation in the area of international business

strategy.

Austerity versus development

Dominico Mario Nuti

Abstract:

Between 2011-2013 IMF researchers have revised upwards earlier estimates of fiscal

multipliers, which throughout 1970-2009 were assumed by the IMF and other international

organisations to be on average about 0.5 for advanced countries. The revision applies from

2010 and was justified by: the ineffectiveness of countervailing monetary expansion close to

the zero floor of the interest rate, lack of opportunities for exchange rate devaluation

especially in the Euroarea, by fiscal multipliers being higher in a downturn than in a boom;

and by simultaneous recent consolidation across countries. Moreover, fiscal multipliers for

expenditure cuts – contrary to earlier findings - turn out to be up to ten times higher than for

tax rises.

This paper shows that, if the fiscal multiplier is greater than the inverse of the Public

Debt/GDP ratio, fiscal consolidation necessarily raises instead of lowering the Public

Debt/GDP ratio with respect to what it would have been without consolidation. This appears

to be the case for all or nearly all of advanced countries, assuming national multipliers equal

to the newly revised average. Fiscal consolidation reduces the Public Debt/GDP ratio only in

the least indebted countries that do not need such a reduction. Consolidation makes debt less

rather than more sustainable, consequently making necessary further fiscal consolidation,

activating a vicious circle. Finally, the maintenance and growth of a gap between potential

and effective income discourages investment and slows down both potential and actual

growth.

Thus austerity and economic growth (and development) can be and mostly are alternative,

conflicting objectives.

Keywords:

austerity, fiscal consolidation, economic development, public debt sustainability, economic

crisis

Bio:

D. Mario Nuti is Professor of Comparative Economic Systems at the Faculty of Economics,

La Sapienza University of Rome (1993-2010, now Emeritus). He graduated in Law (Rome

1962), was a Fellow of the Polish Academy of Sciences in 1962-63 where he studied with

Oskar Lange and Michal Kalecki, and obtained his PhD in Economics at Cambridge, England

(1970), under the supervision of Maurice Dobb and Nicholas Kaldor.

Formerly Fellow of King's College, Cambridge (1965-79); Professor of Political Economy

and Director of the Centre for Russian and East European Studies, University of Birmingham

(1980-82); Professor of Economics, European University Institute, Florence (1982-

90). Visiting Professor, London Business School (1993-2005).

Economic Adviser to the European Commission, DG II, on central eastern Europe (1990-93).

Consultant to the World Bank and other international economic organisations. Economic

Adviser to the Polish Government (1994-1997; 2002-2003), to the Presidential

Administrations of Belarus (1998-1999) and Uzbekistan.

Author of numerous publications mostly on comparative economic systems, in particular on

1) the reform of centrally planned economies and their post-socialist transition to market

economies; 2) corporate governance and employee participation in enterprise decisions and

results; 3) economic integration processes in Europe and in the global economy.

Blog “Transition”: http://dmarionuti.blogspot.com/

The Warsaw Consensus: The New European Growth Model

Marcin Piatkowski

Abstract:

The objective of the paper is to analyze the lessons from the impact of the global crisis on the

growth prospects of ten post- socialist new EU member states (EU-10) and to discuss whether

the region needs a new growth model. The paper argues that near-term economic growth will

be lower than before the crisis, but the region will nonetheless continue to converge with

Western Europe, albeit at a slightly slower rate. However, to ensure full convergence with

Western European levels of income, well-being and happiness and to successfully compete

with other high-achieving emerging markets, the EU-10 will have to adjust its post-crisis

growth model. This paper proposes a new growth model called the “Warsaw Consensus”,

based on economic theory and assessment of the most binding constrains to growth in the

region. Given that economics has difficulty with precisely pinpointing drivers of growth,

policies under the new growth model should be guided by a new policy approach based on

experimenting, evaluating and pragmaticizing (being pragmatic); the impact of these policies

should be assessed ex ante and ex post against its impact on economic growth, well-being and

happiness (what is called here the Golden Growth Triangle).

Keywords:

Economic growth, economic history, growth model, Central and Eastern Europe, policy

reforms.

Bio:

Dr. Marcin Piatkowski is a Senior Economist at the World Bank in Warsaw, Resident Scholar

at TIGER and Assistant Professor of Economics at Kozminski University. Prior to that, he

was Chief Economist of PKO BP, the largest bank in Poland, and an economist and advisor to

IMF's Executive Director (2004-08). He served as Advisor to Poland's Deputy Premier and

Minister of Finance (2002-03), contributing to the fiscal reform program. Between 1996 and

2000, he worked in corporate banking in Poland and in the US, becoming Senior Manager in

Citibank Poland. He authored a number of books and numerous academic papers on the

impact of ICT on productivity growth, tax competition and growth prospects of Central and

Eastern Europe. He conducted research studies at Harvard University, OECD Development

Centre, and London Business School. He has been a frequent contributor to the Polish and

international media, including Financial Times and the Economist. In his free time, he enjoys

running marathons and triathlons, dancing, and reading about the economic and political

history of the world. He writes a blog at http://mpiatkowski.blogspot.com/ and is close to

finishing a book on the new Golden Age of New Europe.

Hidden Champions – The Vanguard of Globalia

Hermann Simon

Abstract:

Global exports are growing more rapidly than national gross domestic products. Globalia, the

globalized world of the future, offers virtually unlimited growth opportunities to countries and

companies who actively participate in this development. Performance differences between

countries are staggering. Among the larger countries Germany is a distant top-performer in

per capita exports. This is not due to its large corporations but to the prevalence of mid-sized,

little known world market leaders, the so-called Hidden Champions. Germany has far more of

these firms than any other country. This prevalence has both historical and modern causes.

Traditional skills have been applied to modern sectors, fierce domestic competition abounds,

a strong manufacture base has been retained and the innovativeness of the Hidden Champions

is outstanding. In addition, unit labor costs have been kept under control in Germany.

The strategies of the Hidden Champions are characterized by extremely ambitious goals

related to growth and global market leadership. They focus on narrow markets and

competencies which is a precondition for achieving world class. The narrow market focus is

combined with global selling and marketing to achieve sufficient economies of scale. The

biggest strength of the Hidden Champions is their closeness to customer, a natural advantage

of smaller companies. Their leadership is long-term oriented and grants employees great

latitude in execution which in turn creates high motivation and low turnover.

Companies in both advanced and emerging countries can learn from the Hidden Champions.

Especially emerging nations should aim at developing a strong mid-sized sector rather than

devote their resources to create large corporations.

Keywords:

Globalization,Hidden Champions, Strategy, Mid-sized Firms, Emerging Countries

Bio:

Hermann Simon is chairman of Simon-Kucher & Partners Strategy & Marketing Consultants,

with 28 offices worldwide. He is an expert in strategy, marketing and pricing and was voted

the most influential management thinker in German-speaking countries after the late Peter

Drucker.

Simon was a professor of business administration and marketing at the Universities of Mainz

(1989-1995) and Bielefeld (1979-1989, and a visiting professor at Harvard Business School,

Stanford, London Business School, INSEAD, Keio University and MIT. From 1995 to 2009

he was CEO of Simon-Kucher & Partners.

From 1984 to 1986 he was the president of the European Marketing Academy (EMAC).

Simon is co-founder of the first Special Purpose Acquisition Company (SPAC) listed on the

German Stock Exchange in Frankfurt, which acquired Exceet Group S.E. in July 2011.

Fiscal Policy for Entrepreneurship and Equitable Growth

Vito Tanzi

Abstract:

Fiscal policy is a potentially important instrument for promoting entrepreneurship,

growth and equity. It is also an instrument that may have different meaning for different

people. A first section of the paper provides definitions of of these terms and discusses how

growth may differ from equitable growth, especially in recent years when growth became

progressively less equitable. A second part of the paper discusses the problem that, as

economies have become more complex, governments have relied more and more on precise

and more complex rules and less and less on general principles to guide the behavior of those

who operate in the market. As long as the operators do not break the rules, even when their

behavior is considered unethical by many citizens, they cannot be punished. This has tended

to make the playing field more favorable for people with higher means, because they are

better able to interpret the complex rules in their favor. The third section provides some

guiding principles for governments to follow in their policies. Finally the last section

concentrates on "equitable growth', discussing why taxation has become less effective in

promoting it. It discusses the potential role of the government emphasizing that , the role that

seems desirable, is often not feasible or difficult to pursue. So that when governments

intervene too much, they often tend to do more damage than good.

Keywords:

Fiscal Policy; Entrepreneurship; Growth; Equity; Government Role.

Bio:

PhD in Economics from Harvard University.He has been: Chief of Tax Policy(1974-1981)

and Director of the Fiscal Affairs Department (1981-2000) at the International Monetary

Fund, and Undersecretary for Economy and Finance (2001-2003) in the Italian Government.

In 1990-94 he was the President of the International Monetary Fund.

He has been a consultant for several international organization including the United Nations,

the World Bank, the European Commission, the European Central Bank, the Inter-American

Development Bank and others.He has received five honorary degrees and is the authors of

many books and articles in professional journals. His most recent books are: Government

versus Markets (Cambridge University Press:2011) and Dollars, Euros and the Fiscal Crisis

(Palgrave macmillan:2013).

Income inequality and the current phase of globalization

Jacek Tomkiewicz

Abstract:

Goal of the paper is to show that the major tendencies one can observe recently in the income

structure, should be considered as a major root of crisis which begun in 2007. Declining

wages share in the GDP and rising income inequalities in both developed and developing

countries, led to development of two major causes: global imbalance and unsustainable level

of household debt.

The paper is organized as follows. First, there are presented consequences of the

contemporary phase of globalization for income structure both in developed and developing

economies. High dynamic in foreign trade together with huge capital flows depressed wages

in mature countries and increased income inequalities in emerging economies. Second, there

are shown links between income structure and dynamics of household debt in US and EU

what led to uncontrolled growth of financial sector fuelled additionally by inflow of the

capital from emerging economies which accumulated trade surpluses. Finally, there are some

opinions that economic policy governments and central banks do not solve structural

problems and in the long term social cohesion can suffer even more.

Keywords:

Income inequalities, globalization, financial crisis, fiscal policy

Bio:

Jacek Tomkiewicz is Research Director at TIGER (Transformation, Integration and

Globalization Economic Research) – research center which operates within Kozminski

University (KU) in Warsaw. He graduated from Cracow University of Economics where he

also worked as a research assistant at Department of Finance. He holds Ph.D. in economics

and he is lecturer (economics, economic policy, public finance) at KU. He was also involved

in practical aspects of economic policy – in 2002 and 2003 worked as an Adviser to the

Deputy Prime Minister, Minister of Finance, and was a member of the team responsible for

public finance reform.

Dr Jacek Tomkiewicz spent time in foreign research institution like OECD (France),

University of Brighton (UK) and Hoover Institution at Stanford University (USA). His

research interests are mainly focused on macroeconomics and economic policy in emerging

markets, he has published some of his works on this issues.