Breaking the link? How European integration shapes social policy demand and supply

ABSTRACT

How does European integration affect the welfare state? This paper argues that European integration has non-complementary consequences for the political economy of welfare spending: European economic integration increases popular demand for social spending, whereas European political integration decreases the supply of social spending. Thus, the conflicting implications of European integration essentially break the link between social policy preferences and social policy. Using statistical models that deal with the multilevel structure of the theoretical argument, we find a positive relationship between economic integration and support for social policy. In the second part of the empirical analysis, dynamic model specifications at the country level show that higher levels of political integration are associated with lower levels of social spending. Furthermore, we provide evidence that social policy responsiveness declines as political integration increases.

KEYWORDS:

• European integration
• social spending
• policy responsiveness
• political economy

Acknowledgments

We thank Lucio Baccaro, Jason Beckfield, Michael Becher, Jane Gingrich, Anke Hassel, Daniel Höhmann, Konstantin Käppner, Miquel Martinez Pascual, Jonas Pontusson, Richard Traunmüller, participants at the EPSA Annual Conference 2018 in Vienna, and the editors and reviewers at the Journal of European Public Policy for their very helpful comments on previous versions of this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Supporting data and materials for this article can be accessed at https://doi.org/10.7910/DVN/IA2KHW.

Notes

1 Beyond EMU, political (i.e., institutional) manifestations of negative integration – especially those that reduce cross-border transaction costs and exchange rate fluctuations – should generally have a constraining effect on fiscal spending because they induce tax competition between member states and decrease corporate tax rates (Genschel et al., 2011).

2 See the appendix for detailed descriptive statistics on all variables.

3 ESS main income variable lacks comparability over time as its coding was changed after the third wave. Therefore, we use a subjective measure of income that was included in all waves (see variable ‘hincfel’). A value of 1 indicates that respondents are living comfortably or coping on their present income, whereas 0 indicates that life is difficult or very difficult on present income.

4 For economic integration, this is Ireland in 2004 (lowest) and Belgium in 2008 (highest). For political integration, this is Spain in 2008 (lowest) and Estonia in 2012 (highest).

5 Our measure of institutional participation exhibits within-country changes in the following countries: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia (see Figure A5). The finding corroborates extant research that has shown the same relationship for longstanding EU members and earlier time periods (e.g., Busemeyer & Tober, 2015; Filippin & Nunziata, 2019).

6 Aggregated social policy preferences enter the models lagged by one year, accounting for the fact that preferences should not turn immediately into policy (cf. Brooks & Manza, 2006a, 2006b, 2007).

7 The results do not change when we include both income groups separately.

Additional information

Notes on contributors

Tobias Tober

Tobias Tober is a Postdoctoral Researcher at the Chair for Empirical Theory of Politics at the LMU Munich.

Marius R. Busemeyer

Marius R. Busemeyer is a Full Professor of Political Science at the University of Konstanz.