HOW WELL ARE THE DIFFERENT EUROPEAN SOCIAL MODELS ADAPTED TO GLOBALISATION?

1. HOW WELL ARE THE DIFFERENT EUROPEAN SOCIAL MODELS ADAPTED TO GLOBALISATION? Iain Begg European Institute, LSE

2. PRESUMED SOCIAL RISKS • Social dumping; tax competition • Job losses – especially the unskilled • …but needs more subtle analysis • Aggravation of poverty and inequality • Regional disparities • Social stresses from migration • A matter of perception more than reality? • Cultural hegemony & related “Bové” effects

3. WHAT YOU (PROBABLY?) EXPECT TO HEAR FROM ME • There are the three Esping-Andersen ‘ideal’ types, plus a southern (& maybe eastern) one • Some good at security and/or solidarity • Some good at flexibility • But only Nordic model achieves both NO • Instead, as seen from most of the rest of the world, much more unites us: • Values, scale of spending, focus of policies… • But distinctive features in all national models: SE vs DK • Inadequate recognition of changes – UK recently

4. ASPECTS OF GLOBALISATION Establishing where comparative and competitive advantage lie: increased specialisation in ‘tasks’ as well as products Making host economy more attractive to investors: the productive role of social protection and enhancing ‘investability’ – e.g. health systems Promoting social integration of migrants and re-calibrating social systems to deal with the phenomenon of ‘ageing’ Europe Resist or succumb? Which tasks still make sense, which ones to abandon? Emphasis has to be on social policies that facilitate re-deployment Receptiveness to new technologies: which skills are needed and how should education & training systems adapt to emerging demands More intense trade Foreign direct investment Upsurge in Migration Délocalisations Technology flows and transfers >>>> >>>> >>>> >>>> >>>>

5. A RACE TO THE BOTTOM? POSSIBLE EVIDENCE • Inequality increasing a bit, but selectively • Demands for reform of social protection • But because of…? • Délocalisations YET CONTRADICTED BY… • Stability of outlays on social budgets • Success of EU’s most ‘social’ economies • Notably the Nordics • Other indicators: gender; minimum wages

6. Today, ‘Lisbon’ is increasingly the EU’s framework for responding to globalisation. The original Lisbon ambition was, over the decade from 2000:‘to become the most competitive and dynamic knowledge-based economy in the world’ But recall that it continues [same sentence!]: ‘capable of sustainable economic growth with more and better jobs and greater social cohesion’

7. TIMING OF EFFECTS Benefits curve well-adjusted EFFECTS Benefits curve slow-adjusters Costs of adjustment TIME Initial dislocations  Reaping long-run benefits

8. SOME CONCLUSIONS • Globalisation has positive effects...eventually • But gains cannot be taken for granted • Necessity of reform is now broadly accepted • Social policy is under scrutiny across the EU • Even in France, even in cherished social areas   • Core aims of social justice remain central • But solutions will be national and specific • Main challenges about the details,not the social model(s) in aggregate • Hence, openness to policy learning is vital

9. HOW WELL ARE THE DIFFERENT EUROPEAN SOCIAL MODELS ADAPTED TO GLOBALISATION? Well enough, but they have to continue to adapt and adjust! Iain Begg European Institute, LSE iain.begg@lse.ac.uk