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

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

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 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

ASPECTS OF GLOBALISATION More intense trade Foreign direct investment Upsurge in Migration Délocalisations Technology flows and transfers >>>> 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

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 EUs most social economies Notably the Nordics –Other indicators: gender; minimum wages

Today, Lisbon is increasingly the EUs 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

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

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 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

HOW WELL ARE THE DIFFERENT EUROPEAN SOCIAL MODELS ADAPTED TO GLOBALISATION? Iain Begg European Institute, LSE Well enough, but they have to continue to adapt and adjust!