Suzana Bastos (p), Fabio Gama Gama, Guilherme Cardoso

In the theory of economic growth, Harrod (1939) and Domar (1946) relate growth on the supply side to growth on the demand side, with investment (physical capital) and labor power as the main determinants. Solow (1956) adds the rate of growth of technology and labor and technology would grow at constant and exogenous rates over time. Moreover, the author includes the decreasing marginal productivity of the factors of production, which would smooth the shocks of demand in the economy by the variation of the interest of capital and wages. In this way, there would be a tendency for economies to grow at a constant rate over time. According to Mankiw, Romer and Weil (1992), Solow's model implies that higher savings rates lead to higher product growth and conversely, increasing population growth rates reduce per capita output, impoverishing the country. For the authors such variables may have their effects leveraged by the level of human capital of the society (Enhanced Solow Model) contributing to a new perspective of economic growth and convergence among nations, once the explanation for the economic disparity between them was found. Acemoglu, Gallego and Robinson (2014), however, consider the determinants of economic growth based on North and Thomas (1973) between the approximate determinants and the fundamental determinants. The approximate determinants, which include factors of production, innovation, accumulation of physical and human capital; would not be the source of the prosperity of nations and their differences, but would characterize prosperity itself. The key determinants would be the responsible for such issues as "why some countries are far more innovative than others?"; "why do they invest more in their educational system?", "why do people save and invest in physical capital?" Having institutions as the fundamental determinants, they would allow the growth by raising the level of Total Productivity of Factors (technological progress), human capital and physical capital; factors whose evolution characterizes the process of economic development. Thus the work proposes to verify if institutions, omitted by the Solow Model and the Increased Solow Model, can be considered specificities of the countries and, thus, be a differential factor for the human capital effect in the GDP per capita. To this end, it uses the methodology of panel data regression for 86 countries with information for the years 2000, 2005 and 2010. And also uses interactive terms to observe the effect of the conditional human capital on Institutions of the countries.

Debora Cardoso, Edson Domingues, Gustavo Britto

The debate about inequality and income distribution has gained focus in the recent economic discussion, especially due to an income concentration trend verified in developed countries and the repercussion of "Capital in the twenty first century", by Thomas Piketty. In Brazil, data and studies have pointed out to an inequality decrease in the first decade of the 2000s. In addition to real minimum wage gains, the cash transfer program called “Bolsa Família” has been pointed out as one of the causes of the inequality decrease observed in the 2000s in Brazil. The “Bolsa Família” is a cash transfer program to poor and extreme poor households created in 2004 by the Brazilian Federal Government. The cash benefits are based on the household profile, considering besides per capita monthly income, number of members and the existence of children, teenagers and pregnant. The program is associated to conditionalities related to health and education and benefited 14 million of households in 2015. Since the program has potential to affect the income distribution and this process may bring many interconnected economic impacts, their implications deserve an investigation. Therefore, the aim of this paper was to analyze the impacts of the “Bolsa Família” Program on income distribution, consumption and productive structure in the Brazilian economy. An original dynamic recursive computable general equilibrium model, modified to consider issues related to income distribution and their impact on households consumption levels as well as on sectoral output was applied. The results suggest that the program also generates income gains for classes which do not receive cash transfers from Government by its indirect effects on labor and capital income, but has effects on labor income inequality decrease and on productive structure. Moreover, consumption and production oriented to domestic market would be encouraged by the program. The results also suggest that cash transfers policies and their impacts on income distribution have the potential to modify the productive structure for its effects on consumption, diversifying productive structure and investment, which may reduce long-term income concentration. We conclude that cash transfers policies have important impacts over the process of development of the country, even though its effect on growth is small.

Nuray Colak (p), Sevkiye Sence Turk

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Nino Javakhishvili-Larsen (p)

Institutionalisation of European border regions is associated with the European Cohesion Policy and territorial integration and aims to create a common European mentality and culture as well as common norms. EU regional governance emphasises the role of institutions implementing local joint initiatives and maintaining a sustainable development in the European regions. Institutional cross-border interactions support the development of the EU goals for regional development by creating local joint initiatives and cross-border institutional cooperation networks. This paper aims to develop a conceptual argument for how such cross-border institutional interactions can be studied through the components of institutional thickness, elaborated in the mid-1990s. According to Ash Amin and Nigel Thrift, the institutional thickness concept is defined as a local condition that supports any specific regional development goals. This paper elaborates the Cross-Border Institutional Thickness (CBIT) framework and offers a quantitative approach to empirically study and analyse the CBIT in EU cross-border regions. The data are compiled from the INTERREG IV project database of 2007-2013, which includes all the institutions that engage in cross-border interaction and create inter-organisational networks. The empirical strategy for the CBIT model applies social network theories and analysis. The model is tested on a case study of the Danish-German cross-border region and replicated on the Rhine-Waal cross-border region (Dutch-German region) in order to test the transferability and compatibility of the results regardless of different sizes, characteristics and degrees of cross-border integration of similar cross-border regions.