The political economy of subsidiarity in labour market reforms: the United Kingdom and Italy in times of crises

ABSTRACT

This article seeks to contribute to the literature centred on the principle of subsidiarity by highlighting the way in which political actors apply different dimensions of subsidiarity, horizontal versus vertical, in the field of labour market policy. It compares labour market reforms in Britain and Italy in the wake of international economic crises, shedding light on the role of subsidiarity dimensions. It shows that Britain applied the principle of horizontal subsidiarity in quasi-market mechanisms while Italy chiefly resorted to the vertical dimension that helped shifting labour market policies from income replacement to welfare-to-work. Additionally, the article explores how the principle of subsidiarity may affect the relationships between the European Union on one side and Britain and Italy on the other in the field of labour market policies.

KEYWORDS:

• Subsidiarity
• labour market
• Europeanisation
• Great Britain
• Italy

Disclosure statement

No potential conflict of interest was reported by the author.

ORCID

Rosa Mulé http://orcid.org/0000-0003-2506-6850

Notes

1. The general philosophy behind these changes can be traced back to the New Public Management School, which developed in the UK in the 1980s and then spread to other industrialised countries in the 1990s.

2. The functioning of social protection at European and national level is characterised by an asymmetric structure (Scharpf, 2010). Under the principle of subsidiarity, social policy remains within the competence of the member states, whereas economic policy has shifted significantly towards the European level. The principle recognises that action in the social policy domain is the responsibility of member states, but within a framework of common objectives.

3. For arguments considering regions as spaces for politics see the Special Issue of Regional and Federal Studies, 3, 2010.

4. National responses to the economic crises were wide ranging. For responses in the European Union, see Quaglia, Eastwood, & Holmes, 2009.

5. These measures are also known as shock absorbers in derogation from the ordinary and extraordinary Wage Guarantee Fund, mobility and unemployment schemes (Cassa Integrazione Guadagni in Deroga). The measure is also called in the literature Short-Time-Working (STW) Scheme.

6. In a footnote the authors remark that in a comprehensive discussion of the Italian labour market, the self-employed should also be considered among the ‘mid-siders’ (endnote 2, 581).

7. Istituto per lo Sviluppo della Formazione professionale dei Lavoratori – Institute for the professional training of workers.

8. The literature adopts a narrow and a broader definition of the term ‘activation’. Narrowly, it involves developing links between unemployment benefits and active labour market policies, making benefits conditional upon participation in job search programmes. More broadly, activation refers to policies and instruments that increase labour market entry. With the term ‘activation’ we mean social and labour market services necessary to promote the active inclusion of working age individuals.