(OXFORO REVIEWOF ECONONIG POLICY, VOL 12.NO.3 THE ASSESSMENT: isms nase cpr er ecy {fom CANCOPY. Resale or turer ee Fis mai wt pea INTERNATIONAL COMPETITIVENESS ANDREABOLTHO ‘Mogdelen College, University of Oxfordt {INTRODUCTION “The concept of iterational competitiveness, as applied to national economies, is « popular one. Politicians businessmen, and economist alike, re- {fertoltinday-o-day discussion when lookingatthe ‘external (export, import, market share, of trade balance) performance of different countries. Indi- ators are produced shoving changes i, or levels ‘of, various countries’ competitiveness (e.g. the Telativepriceorcostindices regularly published by the IMF and the OECD. or the absolute measures produced by organizations such as the Geneva ‘World Economic Forum andthe Lausanne Institute for Menagement Development). Governments of- ten instigate research on the mater as, fr instance, inthe eae ofthe 1993 US Competitiveness Policy Councilor the 1995 EU Competitiveness Advisory Group. Yet, it has recently been argued by Paul ‘Krugman that ‘competitiveness is a meaningless ‘word when applied to national economies. And the obsession with competitiveness is both wrong and dangeroas (Krugman, 1994,p. 4, aposton Krugman foreefll refine inbis contribution othsissueof the Oxford Review of Economic Policy. “The next two sections explore this issue: they ‘examine the problem of defining competitiveness. lookatwhetheritmaters foracoustry and whether insistonce on itis as dangerous as argued by Krugman, Sections V and V then dseussthe shor rum infractions between competitiveness and ex- {emal balance, while section Vitackles the longer rhnonesbetween competitiveness and productivity frowth-Theconclusionslock rieflyatsome impli- ations for policy Ml. WHAT IS COMPETITIVENESS ? ‘There reno agreed definitions of competitiveness andthe term seems to mean different things to * chs lap, Ande. Tim ins ani oshpidetmany hepsi bl canna bebet espensle 1 1998 OXFORD UNIVERSITY PRESS AND THE OXFORD REVIEW OF ECONOMIC POLCY LIMITED 1aa oe ‘OXFORD REVIEWOF ECONOMIC POLICY, OL. 12.NO.3 ferent people—somemay stress acounty'slow costs oF the level ofits exchange rate, others 2 country’ steeinologcal leadership orevenits growth rate. In some cases the arguments are not about a stat ofaffai, butabout behaviour with theidea of ‘compettivenss beingassociated with rivalry. Given such differen starting poits, itis inevitablethatthe ‘debate ha ofen been confused. Atherisk fover- ‘impliscetog the following willtrtoprovigesome