2006 AAnnualnnual RReporteport CASE - Center For Social And Economic Research Warsaw May 2007 LLetteretter ffromrom tthehe BBoardoard As we look back on 2006, we reflect upon a year of rigorous research and insightful analysis. Our work in all of the main European economic policy areas continues to gain a reputation for insightfulness, thoroughness and innovativeness and our publications and conferences attract the attention of policy-makers, journalists, and informed citizens across Europe. Furthermore, European and national institutions, such as EU directorates- general and national ministries, continue to draw on our expertise and experience to conduct specific studies on key policy trends and issues. We would like to share with you one example of how our research has directly contributed to the development of better policies in Brussels. In 2006, European Union policy-makers continued to debate the arrangement of economic relations with the states to the east of the EU (the so-called “Eastern Letter from the Board from Letter Neighbourhood”). CASE has emerged as a critical resource in this debate as a result of our vast experience and our extensive network of daughter and partner organizations in the region. This experience and contacts were applied in 2006 to a large, CASE- led, multi-institute, multi-year research project under the working title of “EU Eastern Neighbourhood: Economic Potential and Future Development,” with the task of producing a stream of critical results on trade, migration, foreign investment and institutions, as well as providing an analytical background for the design of European policies. This work is complemented by recommendations from our work on bilateral EU relations with key Eastern Neighbourhood countries that were presented to policy-makers in several national capitals and which were presented in Berlin during the German Presidency and at the European institutions in Brussels and Strasbourg in early 2007. Many areas of our operations and activities have evolved and are continuing to evolve, but our core belief remains unchanged – we continue to work toward the development and implementation of the best possible policies, leading to the improved economic well- being and freedom of citizens and societies in the European Union member states, the Commonwealth of Independent States and across the developing and developed worlds. We also strive to see these challenges in a global perspective. In September 2006, we began to prepare for our 2007 international conference on the economic impact of a rising Asia on Europe and the rest of the world. This event, which is being held in Kyiv in March, 2007, promises to be an excellent opportunity for scholars from around the world to exchange viewpoints and to engage in productive discussion. From an institutional perspective, in 2006 we continued the process of expanding, developing and “internationalizing” our researchers and staff. Our endowment continues to grow and we expect it to grow even faster in 2007, not in the least thanks to a generous second donation from the Stefan Batory Foundation. Similar to 2006, 2007 will be a year of growth and transformation, as we continue to meet the evolving needs of policy-makers and citizens for clarity and a deeper understanding of how the economy works. Even as we look forward, however, we invite you to look back at our activities and achievements in 2006 in the pages that follow. 20 April 2007 Ewa Balcerowicz Artur Radziwiłł James Cabot 2 TTableable ofof ContentsContents ABOUT CASE 4 KEY INSTITUTIONAL ACHIEVEMENTS IN 2006 6 RESEARCH PROGRAM IN 2006 8 Macroeconomics and public fi nance 8 Labor markets, human capital and social policy 8 Innovation, competitiveness and entrepreneurship 9 EU enlargement, European Neighborhood Policy and EU external trade 10 Reforms, growth and poverty reduction in developing and transition countries 11 ONGOING PROJECTS IN 2006 12 EVENTS AND MEDIA 21 Key Events 21 BRE Bank – CASE Seminars 24 Study tours 25 Biannual Conferences 25 Media 26 PUBLICATIONS 27 CASE Reports 27 CASE Studies and Analyses 27 BRE Bank – CASE Series 28 Polish Economic Outlook: Trends, Analyses, Forecasts (PEO) 28 Books and Book Chapters 29 Journal Articles 29 CASE PEOPLE 30 FINANCING OF CASE ACTIVITIES 33 Total Revenue in 2006 33 Sources of Financing 34 Endowment 36 3 AboutAbout CCASEASE CASE - Center for Social and We seek to maintain full transparency Ec onomic Re searc h is an indep endent with regard to our sources of funding, non-profi t institute founded on the our participation in projects and other idea that research-based policy- institutional activities. making is vital for the economic About CASE About welfare of societies. Established in We seek to be characterized by Warsaw in 1991, CASE today is an diversity in the projects we tackle, the internationally renowned think tank experts we contract, the partners drawing on the talents of prominent with whom we work, and the donors economists and driving the creation who support us. of a network of partner institutions in Finally, we seek to maintain a strict transition countries. CASE carries sense of non-partisanship in all of out policy-oriented research and our research, advisory and development assistance projects, educational activities. specializing in questions of European integration, post-communist transition, and the global economy. AActictivvitiesities CASE relies on its pool MMissionission of internationally rec- ognized economic Our mission is to provide objective experts and War- economic analysis and to promote saw-based staff to constructive solutions to the carry out the fol- challenges of transition, reform, lowing activities: integration and development in order to improve the socio-economic well- being of societies. • Conduct independent, VValuesalues high-quality research and We defi ne ourselves by our values analysis – integrity, quality, transparency, diversity and non-partisanship and, • Advise governments, above all, by a commitment to the international pursuit of excellence in all areas of organizations and the our activities. NGO sector We seek to be an institution defi ned • Inform and encourage by both institutional integrity as well public debate as by the integrity of our experts and • Disseminate economic knowledge staff. and research results We seek to be a group of scholars • Support the growth and and experts defi ned by the quality of independence of the NGO sector our research outputs and our advisory in post-communist countries and technical assistance activities. 4 CCASEASE NNetworketwork increase public awareness of the European dimension of national CASE has capitalized on its economic policy issues. institutional experience by helping to co-found a network of independent EUROFRAME – The European research institutes across post- Forecasting Network (EFN) comprises CASE About communist countries: 10 of the most respected economic forecasting and research institutes in CASE Kyrgyzstan Europe. They have been selected by CASE Moldova the EC to produce bi-annual reports on the euro area covering economic CASE Transcaucasus forecasts, regular policy monitoring and special policy topics. CASE Ukraine ERAWATCH was conceived to IPM-CASE Research Centre support policy making in the European (Belarus) research fi eld. It is a long term initiative Institute for the Economy in jointly carried out by the EC’s Transition (Russia) Directorate-General for Research and the Joint Research Centre - This network represents Institute for Prospective Technological CASE’s continual ef- Studies (IPTS). Its aim is to provide a forts to increase the better understanding of national and range and quality of regional research systems and of the economic informa- environment in which they operate. tion available to de- cision-makers FEMISE is a Euro-Mediterranean across the post- network, supported by the EC, uniting communist world, more than 70 independent economic and to foster vibrant institutes and conducting socio- civil sectors in these economic analysis of the Euro- societies. Mediterranean Partnership. CASE joined FEMISE in the fall of 2006. EExternalxternal RResearchesearch ARETT (Association of Russian NNetworksetworks Economic Think Tanks) - CASE has In 2006, CASE was a observer status in this network. participating institution in six In 2006, we continued to support the international networks: Association of Polish Non- ENEPRI - European Network of Governmental Organizations known Economic Policy Research Institutes as ‘Grupa Zagranica’. This is a group brings together 22 leading national of 40 Polish organizations which are economic policy research institutes united by the international scope of from most of the EU-27 countries. their work and their aim to educate The goals of the network are to foster and inform Europeans about the the international diffusion of existing needs of people living in developing research, conduct joint research and countries. ▄ 5 KeyKey InstitutionalInstitutional AchievementsAchievements BBecomingecoming a tthoughthought lleadereader onon EUEU relationsrelations wwithith tthehe EEasternastern NNeighbourhoodeighbourhood In 2006, we solidifi ed our position at the forefront of research, particularly on questions of Eastern Neighbourhood relations and labour markets in Central Europe. CASE was selected to lead an 11-member consortium of European research institutes within the Sixth Framework program of the European Commission entitled “ENEPO - EU Eastern Neighbourhood - Economic Potential and Future