Philippe Poinsot (p), Nadine Levratto

Anna Matas

Since the mid-1990s, the priority of public spending cuts and supply-side policies based on wage control and production cost reduction have taken hold, accentuating criticism of taxation. The result of this movement is evident for firms. After having experienced a continuous rise of taxes during the 2009-2013 period, they have since undergone a significant and rapid reduction that contrasts with the uninterrupted and marked rise in household rates. Despite this situation, the various French business organizations, more so than those in other OECD countries, have helped to reinforce this trend by arguing that the burden of corporate taxation is among the highest in Europe.

In response to these criticisms, the 2023 French Finance Act has adopted the cancellation of one of these taxes, a local one in particular: the Cotisation sur la Valeur Ajoutée des Entreprises (CVAE) by 2024. This measure represents a loss of revenue of 10 billion euros a year and will mainly weigh on local governments. While the production of an impact study in support of each bill has been mandatory since the constitutional revision of July 23, 2008, this cancellation has not been the subject of any prior impact study, and the distributive effects have not been assessed. This research aims to shed light on this subject by proposing an analysis of the impact of the cancellation of the CVAE. It consists in identifying the companies benefiting from the measure and the territories where they are located, in order to highlight the expected effects of the reform. Existing literature on the subject is still relatively limited, except Chtioui (2021), Chtioui & Levratto (2021), Urvoy (2019), and very recently Rexecode (September 2023). By mobilizing various databases that provide detailed information, this article goes further focussing on the CVAE only. It proposes a precise snapshot that identifies the characteristics (size, age, form of capital control) and location of the main contributors.

Abel Polese (p)

Philippe Poinsot

In addition to the almost 2bln workers already active in the informal sector, World Bank and ILO estimate that the pandemic might have put at risk of precarious employment 500mln-1.5bln more. These losses, and related consequences, are not evenly distributed given that Africa, Asia and Latin America is where 93% of the world’s informal employment is located and where post-pandemic crisis is likely to hit harder (especially women, migrants and young people). Yet, the concern is global. Indeed, besides vulnerability and precariousness at individual and community levels, informality also eventually reduces state capacity and the ability of institutions to design and implement policies that properly address social, economic and environmental issues (i.e. SDGs) in a long term perspective. Accordingly, informality-related challenges have been devoted a great deal of attention and political statements. But seldom have these statements been followed by concrete instructions, guidelines or evidence-based policies to tackle informality across the world.

Starting from this gap, our presentation uses case studies from Africa, Asia and Latin America to explore the extent to which the informal sector can be redirected into formal business and therefore invite informal business actors out of the shadow. The paper will offer an overview of the preliminary results of the MSCA-DN project: PRESILIENT (https://www.presilient-dn.eu/) with evidence from 15 countries on the state of the informal economy in Africa, Asia and Latin America as well as an interpretative framework to tackle informality at a global level.

This will be used as a starting point for a discussion on the function of informality in governance and to argue that informality is not always obnoxious or harmful but can be used to foster cooperation between local realities and national and international actors.

Vinko Mustra (p)

Abel Polese

Severe external shocks and highly heterogeneous territorial impacts of great volatility have increased importance of regional economic resilience concept in last fifteen years. While there are different concepts of regional economic resilience, almost all approaches allow looking on specific region as a complex system characterized by the interdependence of time and place-specific socio-economic characteristics (Cellini and Cuccina, 2019). Consequently, regional ability to be resilient has been established as a complex multidimensional property and generating different reactions and different levels of resilience on shocks (Martin et al., 2016).
Empirical studies have resulted with the different groups of regional economic resilience determinants. Macroeconomic conditions (Crescenzi, Luca &Milio, Webber, 2016; Healy & Bristow, 2018; Rios & Gianmoena, 2020), human capital endowment (Di Caro, 2015; Crescenzi, Luca & Milio, Webber,2016; Annoni, Dominicis, & Khabirpour, 2019), intensity of innovation activities ( Bristow, & Healy, 2018; Filippetti, Gkotsis, Vezzani & Zinilli, 2020; Muštra, Šimundić, Kuliš, 2020); socio-demographic characteristics (Giannakis & Bruggeman, 2019) economic structure composition (Martin et al, 2016; Cainelli, Ganau, & Modica, 2018) and institutional conditions (Fratesi & Rodríguez-Pose, 2016; Ezcurra, & Rios, 2019: Rios, & Gianmoena, 2020).
However, despite increased interest and rapid theoretical development, a common sentiment in the literature is that the regional economic resilience concept is still fuzzy concept requiring greater conceptual clarity (Sutton et al, 2023). On this matter, there is especially gap in understanding the role of decentralization on regional economic resilience.
By implementing panel data for NUTS 2 regions in EU for period 2000-2016, paper seeks to expose insights into the role of decentralization, shedding light on optimal levels of regional autonomy to strike a balance between local responsiveness and national cohesion during the periods of great external shocks and economic volatility.
Empirical findings confirm previous findings on the positive role of institutional quality (Annoni et al., 2019; Ezcurra & Rios, 2019; Farole et al., 2011; Rios & Gianmoena, 2020; Rodriguez-Pose, 2013; Rodríguez-Pose & Garcilazo, 2015, among others) but also provide evidence on decentralization as a fundamental driver of economic prosperity and on regional resilience in Europe. These findings provide important puzzle in understanding role of decentralization in navigating complex terrain of regional economic resilience.

Anna Matas (p), Albert Gragera, Jordi Perdiguero

Vinko Mustra

Public transport plays a pivotal role in urban mobility and subsidies are justified to transit provision scale economies, its externalities relief effect and contribution to social equity. The relationship between fares and transit ridership plays a central role in the policy debate about transport supply, investments, and financing, where price reductions cyclically pop up in the policy arena and even more so now with the application of country-wide discount schemes in Germany and Spain.
However, it is still unclear whether broad fare discounts are the most effective way to promote modal shift, as evidence suggests the sign of the net effect of massive fare discounts is not yet clearly stablished and depends on what modes this increased ridership is shifting away from. Moreover, fare discounts have heavy budgetary implications as increasing the cost coverage ratio bore by the public sector can increase the risk of quality deterioration, service cuts and political backlash for any price increase back to previous fare levels.
This paper analyzes the causal impact of transit fare on transit ridership and travel mode substitution. We focus on the specific fare discount scheme introduced in Barcelona and its metropolitan area, relying on daily ridership figures for the stations access turnpikes and road traffic counts for the period 2018 - 2023. Our research strategy combines fixed effects and regression discontinuity, taking advantage of the exogeneity in the date of implementation of discounts for the whole transit network. Our models flexibly account for other potential confounding factors like COVID-19 restrictions, relative changes in multi-ride ticket prices, and gas price discounts introduced by the Government.
Results indicate a nuanced impact of fare discounts on ridership levels. While fixed effects models show mixed effects, regression discontinuity models suggest a 7-15% increase in ridership levels. Exploring car substitution effect suggests that discounts’ ability to shift drivers away from their cars is difficult, and potential shifts from more sustainable modes and transit crowding effects due to induced demand make it hard for discounts to yield a positive welfare impact. The findings underscore the need for nuanced policy considerations and highlight the challenges in achieving modal shift through fare interventions.