Foreign fighters – Member State responses and EU action

European Parliamentary Research Service Blog

Written by Piotr Bąkowski and Laura Puccio,

Foreign fighters: Member State responses and EU action © Nomad_Soul / Fotolia

As the hostilities in Syria and Iraq continue, and terrorist activities worldwide appear to be on the rise, EU Member States are increasingly confronted with the problem of aspiring and returning ‘foreign fighters’. Whereas the phenomenon is not new, its scale certainly is, explaining the wide perception that these individuals are a serious threat to the security of both individual Member States and the EU as a whole.

International fora, including the United Nations, have addressed the problem, with the UN adopting a binding resolution in 2014 specifically addressing the issue of foreign fighters. The EU is actively engaged in international initiatives to counter the threat.

Within the EU, security in general, and counter-terrorism in particular, have traditionally remained within the Member States’ remit. The EU has, however, coordinated Member State activities regarding the prevention of radicalisation, the detection…

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Red tape: Another Brexit red herring

Flip Chart Fairy Tales

As soon as the EU referendum was called, it was inevitable that someone would start banging on about red tape. It costs £8.6 billion, no, £18 billion, no, £33 billion, no, £80 billion. Oh well, it’s loads and loads anyway. Getting rid of it would, apparently, free Britain up to become a super-competitive world-beating economy.

The trouble with all this, though, is that the UK is already one of the least regulated countries in the world. The OECD’s product market regulation index rates the UK as the second least regulated economy in the developed world (or perhaps the third least as the US didn’t participate in the most recent study).

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When it comes to employment legislation, the picture is very similar, for both permanent and temporary workers.

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Charts via OECD Employment Outlook 2013

Even this isn’t the whole story, though, as it has become much more difficult in…

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Tom Sargent on how jobs are always available

Source: How Sweden’s Unemployment Became More Like Europe’s, Lars LjungqvistThomas J. Sargent 2010.

Crime Deterrence: Evidence From the London 2011 Riots

Source: Crime Deterrence: Evidence From the London 2011 Riots – Bell – 2014 – The Economic Journal – Wiley Online Library.

@BernieSanders there is no other side to Cuba – a totalitarian dictatorship

The Scandinavian welfare states are mooching off the USA

The welfare states in Scandinavia do not make their societies any less unequal than most other welfare states once you take into account taxes and transfers – after-tax redistributions.

Source: Why Can’t America Be Sweden? – The New York Times.

Absolute poverty from 1820 to 2015

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Big bills left on the #livingwage sidewalk?

Living wage activists believe that businesses can profitably pay their low-paid workers a lot more. The living wage pay increase will not jeopardise the survival of the business or jobs because their workers will be more productive because of the living wage increase. Morale will be higher and job turnover will be lower. Both of these will increase productivity perhaps enough to offset the increase in labour costs.

In a nutshell, living wage activists have discovered a hitherto untapped entrepreneurial opportunity for profit. These living wage activists are happy to disclose this secret to lower costs to the world at no fee.

What they are arguing is businesses do not notice a profit opportunity that these political activists have noticed and are now publicising widely. Entrepreneurs are leaving money on the table that could easily be snapped up simply by paying their low-paid employers higher wages.

Source: Mancur Olson (1996) “Distinguished Lecture on Economics in Government: Big Bills Left on the Sidewalk: Why Some Nations Are Rich, and Others Poor.” Journal of Economic Perspectives 3-24.

This money on the table metaphor is similar to the big bills left on the sidewalk metaphor. There is easy money to be had from paying low-paid workers more because these workers will quickly become more productive because of the higher wages.

Living wage activists do not address why entrepreneurs had not discovered this insight into cost saving themselves. After all, every entrepreneur, every employer knows that if they pay more, they will get a better class of job applicant.

Of course, if this insight by the living wage activists is true, all workers should be given a similar increase in their pay because their productivity will go through the roof as well.

Entrepreneurs profit directly from spotting every new opportunity for profit. They have no reason to turn money down particularly when it is obvious and straight under their nose.

The modern theories of the firm focus, in part or in full on reducing opportunistic behaviour, cheating and fraud in employment relationships. The cost of discovering prices and making and enforcing contracts and getting what you pay for are central to Coase’s theory of the firm put forward in 1937.

The profits of entrepreneurs for running a firm is directly linked from their successful policing of the efforts of employees and sub-contractors to ensure the team and each member perform as promised and individual rewards matched individual contributions (Alchian and Demsetz 1972; Barzel 1987). Alchian and Demsetz’s (1972) theory of the firm focused on moral hazard in team production. As they explain:

Two key demands are placed on an economic organization-metering input productivity and metering rewards.

The main rationale in personnel economics from everything ranging from employer funding of retirement pensions to the structure of promotions and executive pay including stock options is around better rewarding self-motivating employees who strive harder and reducing the costs of monitoring employee effort.

At bottom, the efficiency wage hypothesis is entrepreneurs are unaware of the higher quality and greater self-motivation of better paid recruits for vacancies but wise bureaucrats and farsighted politicians notice these gaps in the market. Bureaucrats and politicians notice these gaps in the market before those who gain from superior entrepreneur alertness to hitherto untapped opportunities for profit do so and instead leave that money on the table.

% employees working more than 50 hours per week in the USA, UK, Japan, France, Germany, Canada, Italy, Australia, New Zealand, Denmark and Sweden

Them Continentals certainly are a bit work-shy especially the Nordics. All of them are pretty much afraid to put in a long week. Then again they do face rather high taxes on labour so what would you expect? The Japanese are still working themselves to death.

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Data extracted on 09 Mar 2016 22:25 UTC (GMT) from OECD.Stat – OECD Better Life Index 2015.

The gender pay gap for high school leavers and graduates aged 35-44 in the US, UK, Canada, Denmark, Sweden, Australia and New Zealand

The USA, the gender pay gap gets worse if you go to college. By contrast, in Sweden and especially Canada the gender pay gap is much less for graduates than for those with a high school education.

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Data extracted on 09 Mar 2016 22:28 UTC (GMT) from OECD.Stat.

In most countries in the chart above, going on to university and graduating does not reduce the gender pay gap by the time you reach your late 30s and early 40s. Best explanation for that is that part of the graduate wage premium is traded for work-life balance.

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