Structural Reforms 0.0 – The case for strengthening institutions

My new blog on the urgent need to improve the quality of governance. Attempts to reform the euro zone, to expand the euro zone and indeed to expand the EU are stalled by an obtrusive lack of trust. We had argued here that this lack of trust comes, at least in part, from a divergence in the quality of governance and the quality of institutions. Good institutions matter for economic outcomes, willingness to reform and the smooth functioning of the economic and monetary union.

We show that perceptions of institutional quality in the EU are not only heterogeneous, they have also recently diverged. We look at the World Bank Governance Indicators for three country groups: those hit worst by the crisis in the euro area; central and eastern European (CEE) countries; and prospect countries that are on track to join the EU in the future.

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