The effects of immigration and integration on European budgetary trade-offs

ABSTRACT

What affects government policy-making continues to be an important question for researchers interested in political competition and policy priorities. In this contribution, we bring together a theoretical framework that focuses on the influence of globalizing forces on government policy decisions with a methodological emphasis on explaining dynamic budgetary trade-offs. While comparative public policy and budgetary scholars typically have focused on entire budgets or amounts spent on specific policies, we look at the political priorities embedded in budgets by modeling the budget as a pie. Then, we theorize about how governments respond to external shocks by altering the allocations to the various policy areas. Using this approach, we find that governments of different ideological types react to external shocks by altering their different policy priorities.

KEYWORDS:

• Budgeting
• compositional data
• globalization
• welfare state policy

Acknowledgements

An earlier version of this contribution was presented at the conference ‘Political Budgeting Across Europe,’ which was held at Texas A&M University, 10–11 December 2015. The authors thank the members of this audience, two reviewers, and the editors for their helpful comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Christine S. Lipsmeyer is associate professor at the Department of Political Science, Texas A&M University, United States.

Andrew Q. Philips is assistant professor at the Department of Political Science, University of Colorado at Boulder, United States.

Guy D. Whitten is professor at the Department of Political Science, Texas A&M University, United States.

Notes

1. Breunig and Busemeyer (2012) are one exception.

2. Exceptions include Citi (2013) and Epp et al. (2014).

3. We do not have theoretical expectations for all policy areas in a budget, since government ideology may not have different effects for all areas. For instance, research on education spending has highlighted a lack of influence from ideological divisions (Busemeyer et al. 2013; Garritzmann and Seng 2016). An advantage to using a compositional approach is that it will show the changes – or the lack thereof – in all budgetary categories.

4. Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, and the United Kingdom.

5. Details available at http://faculty.missouri.edu/williamslaro/govtdata.html (Seki and Williams 2014).

6. We address non-stationarity and autocorrelation issues in the Online Appendix.

7. For both immigration and integration shocks, we use two standard deviation increases that fall within our sample of country-years. Each ‘shock’ is a one-time, permanent increase in either immigration or integration in year five, all else constant. Since each variable is expressed as either the change in immigration or integration, this results in a permanent increase in the rate of change.

8. The changes depicted in Figures 1c and 2c are the expected total long-run change in each category. The changes that we observe in Figures 1a, 1b, 2a, and 2b are from 15 years of simulated changes. The long-run changes will be slightly larger in magnitude with tighter confidence intervals.

9. Confidence intervals are wider for the right government results since only about 20 per cent of the country-years of our sample were during right governments.