DP2371 Social Europe: Dramatic Visions and Real Complexity

Author(s): Tito Boeri
Publication Date: February 2000
Keyword(s): Monetary Union, Race To The Bottom, Social Europe
JEL(s): H53, I38, J68
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2371

Many social policy reforms have been carried out in Europe in the last fifteen years. Most of these reforms are marginal. Often they are mutually inconsistent. Yet, something is changing in the European social policy landscape and not in the direction implied by the presence of a 'race to the bottom' in social welfare provision. There are no signs of convergence of social policy models across Europe. Further reforms will have to be respectful of the initial conditions, that is, they necessarily have to adapt to the various Social Europes. By imposing the same pattern of reforms to the different European social policy models there is a high risk of jeopardizing reform efforts altogether. An additional reason for not imposing a single European social policy model is that social policy reforms need to be comprehensive, hence they should necessarily work on country-specific institutional clusters. All this makes a strong case for maintaining EU-level decision-making on social policy reforms under unanimity rule. Majority voting on these issues is likely to involve strong pressures to harmonize institutions, while some countries will always be in a minority. One country may receive the worst of each welfare system and make the furthering and broadening of the scope of reforms even more difficult.