American and European Economic and Political Studies – serie

Professor Paul Welfens offers a unique and timely approach to the major task of stabilizing and integrating the Balkans. His book is one of the first to assess in depth the progress of reconstruction and to evaluate the success of coordination on the part of various Western governments and international organizations. Professor Welfens sees an intimate connection, in the sense of equal responsibility, between internal reform, restructuring, and revitalization in the region and Western financing, ideas, and programs. Professor Welfens has coined the term "networked approach" to capture the strategy of Western cooperation among multiple actors, particularly through the mechanism of the Stability Pact for Southeastern Europe. In addition to demonstrating where the Stability Pact works well, he identifies problem areas, with respect to both inconsistencies in donor policies and coordination and significant structural variations among Balkan countries and entities. He also flags concerns about EU enlargement overstretch. This book has emerged from a bi-national, cross-disciplinary research project at the American Institute for Contemporary German Studies on "Cooperation and Competition: American, European Union, and German Policies in the Balkans" that explores the opportunities and obstacles regarding cooperation in the political, economic and military realms. The project - financed by a grant from the DaimlerChrysler-Fonds im Stifterverband fur die Deutsche Wissenschaft ­ examines the implications of lessons learned in the Balkans for transatlantic relations, an area Professor Welfens discusses with some concern about potential conflicts. Additional individual and collective products from the AICGS research project will be forthcoming during 2001.

The New Economy in Europe and the US poses many unexplored issues. The authors present innovative theoretical and empirical analysis on Internet dynamics, productivity growth and organizational changes in selected OECD countries. New empirical findings related to telecommunications, Internet and growth also are presented. Based on the theoretical and empirical analyses various policy options are developed. Policy measures, both at the regional and national levels, can stimulate structural change, knowledge diffusion and economic growth. Different governance strategies for the Internet and e-commerce are identified from a global perspective.

The strong productivity growth of the US and Scandinavian countries in Europe in the 1990s has raised the question whether the ICT sector - information and com­ munication technology (that is computers plus telecommunications plus digital services)-is the new driving engine of high growth in leading OECD countries. Judging by the empirical evidence for the US, including a new study by McKinsey which gives mixed evidence, it is still too early to clearly dismiss Robert G. Gordon's hypothesis that the acceleration of US output growth is (dis­ regarding quality problems of price measurement) exclusively due to cyclical factors and increased productivity growth in the computer sector. The counter­ hypothesis is associated with research by Stiroh and others who argue that there are positive productivity spillover effects from ICT to other sectors. Indeed, it is not clear ex ante whether mainly the Old Economy or the so-called New Economy stands to benefit most from high innovation rates and strong productivity shifts associated with the spreading of digital services. Interestingly, the increased eco­ nomic role of the internet also contributes to the internationalization of the econ­ omy since more services have become tradable, and growing import competition itself could stimulate productivity growth and thus contribute to higher growth. If ICT plays a key role in the new economy, there are important implications in the differential degree to which Germany and the US have implemented ICT.