Does the Dutch Model Really Exist?

The policy that has led from the ‘Dutch disease’ (in the 1980s) to the ‘Dutch miracle’ (in the 1990s) consists of three tracks: 1) wage moderation, 2) retrenching public expenditure and reducing the tax burden, 3) slimming the welfare system. The wage moderation track seems to have been the most important one. The term ‘Dutch model’ refers to the socioeconomic system of the Netherlands. Most observers point in particular to the relatively low unemployment rate to indicate the success of this model. However, the economic inactivity rate in the Netherlands is not lower than in neighboring countries. This suggests that open unemployment in the Netherlands has partly been replaced with hidden unemployment. In particular the disability scheme seems to contain a large component of hidden unemployment. Another feature of the Dutch model is its consensus seeking nature, which is fostered by its institutional structure.Dutch model, Dutch disease, Netherlands, polder model

Does the Dutch Model Really Exist?

The policy that has led from the ‘Dutch disease’ (in the 1980s) to the ‘Dutch miracle’ (in the 1990s) consists of three tracks: 1) wage moderation, 2) retrenching public expenditure and reducing the tax burden, 3) slimming the welfare system. The wage moderation track seems to have been the most important one. The term ‘Dutch model’ refers to the socioeconomic system of the Netherlands. Most observers point in particular to the relatively low unemployment rate to indicate the success of this model. However, the economic inactivity rate in the Netherlands is not lower than in neighboring countries. This suggests that open unemployment in the Netherlands has partly been replaced with hidden unemployment. In particular the disability scheme seems to contain a large component of hidden unemployment. Another feature of the Dutch model is its consensus seeking nature, which is fostered by its institutional structure.Dutch model, welfare system, Dutch disease, Dutch miracle

An Incomes Policy for the Professions: the Dutch Experience

In 1951 the United States began moving toward an incomes policy, an attempt to end postwar wage and price inflation by linking changes in these prices to gains in productivity. Other countries later followed suit; some countries had already adopted wage and price control policies. The Netherlands moved toward an incomes policy immediately after World War II. Initially, the Dutch program involved wages only, but in the 1970s it became an accepted principle that private professional income should be comparable with the salaries of government officials and civil servants with comparable training and responsibilities. In the Netherlands (as in the United States and, before medicine was socialized, the United Kingdom) health professionals operate on a fee-for-service basis and their incomes escalated as a result of both inflation and monopoly power. So they were subjected to the incomes policy. The policy's effectiveness in curbing income escalation cannot be determined with certainty—reliable data are lacking. However, the evidence indicates that the policy failed to achieve its original purpose.Incomes policy, Netherlands

Romania and European Union Enlargement

This paper looks at the position of Romania in the run-up to European Union membership. It starts by comparing the EU’s 2004 Eastern enlargement with previous enlargements. It ap-pears that the EU became poorer by every single enlargement. The EU’s GDP per capita decreased each time relative to GDP per capita of the six founding member states (Belgium, France, Germany, Italy, Luxembourg and the Netherlands). Also, there appear to be good economic reasons for the postponement of Romania's accession until 2007 (or 2008). Romania did not achieve macro-economic stability as fast as the other countries in the region, its welfare level is lower and its progress in establishing a market economy is slower compared to the countries that joined the EU in 2004. In addition, it has realized little progress in the fight against corruption. Finally, the paper looks at the situation created by the rejection of the draft constitu-tional treaty by the French and Dutch voters in 2004. It presents five options. The most likely seems that the EU will proceed on the basis of the Nice Treaty and political agreements. Fur-ther enlargements will be much more difficult to realize than in the past. This does not apply to Bulgaria and Romania, as they will join the EU in 2007 or 2008. It does apply, however, to Turkey and the former Yugoslav republics.European Union, enlargement, Romania

Local public procurement: how to deal with a creative bidder? A case study from the Netherlands

This paper presents an analysis of the procurement of transportation services for the disabled by the town of Ridderkerk. The method used consisted of a study of the town’s files and interviews with 11 persons involved. The tender specifications were peculiar in that they required bidders to submit a schedule with prices per ride for seven classes ranging from 100,000 to over 600,000, whereas the real number of rides amounted to 270,000. One of the bidders quoted high prices for the first classes and very low prices for the last classes. On the basis of all seven classes, he quoted the lowest costs and won the contract. However, on the basis of the real number of rides he was the second most expensive bidder.Public procurement; local government; Netherlands; transportation services for disabled

Europe: the 1990s and beyond

Europe’s borders are not defined and the European Commission rejects a static definition. This paper looks at the Eastern enlargement of the European Union. It applies a political economy of reform based on a World Bank analysis tracing the paths of winners and losers from the transition. Most of the applicant countries have adopted a part of the necessary legislation to bring their monetary system in line with the requirements of the EMU acquis and the Maastricht conditions. Enlargement of the Economic and Monetary Union will most likely offer both static and dynamic prosperity benefits that are comparable to the long-term advantages of the introduction of the euro. The economic implications for the applicant countries tend to be significant, but the European Union will hardly be affected by the Eastern enlargement from a strictly economic point of view. Thus, the enlargement process seems more important politically than economically. The rationale behind the Eastern enlargement is not the economic effect, but the preservation of stability in Europe.European Union enlargement, transition

The Economies in the Black Sea Region: How Did They Fare after the Collapse of the Soviet Union?

This paper analyzes the economic developments in countries bordering the Black Sea. Of the three former soviet republics bordering the Black Sea, Georgia showed the best economic per-formance, in particular in the late 1990s. The economic performance of Russia and Ukraine is poor. Their economies shrank severely in the 1990s. Though the transition depression seems to have bottomed out, it is far from certain that the economic recovery is sustainable. The Russian economy might still have been shrinking without the support of high oil prices. Of the European Union candidate member-countries bordering the Black Sea Bulgaria’s eco-nomic performance is considerably better than Romania’s. However, the high unemployment rates and the corruption problem still pose big problems in both countries. They will have a long way to go before accession to the European Union can be realized. Turkey combined high economic growth with high inflation in the 1990s. The stabilization program does not meet its objectives and accession to the European Union is still far away.Black Sea region, former soviet republics

Enlarging the European Union: Taxation and Corruption in the New Member States

This paper addresses the run up to the recent European Union enlargement. It considers the accession of 10 Eastern European countries in view of the pre-existing economic conditions. The paper also raises the question how the new member states can tackle their deficit problems. In particular, the paper pays attention to the question at what point the emphasis should be placed on cutting expenditure rather than raising revenues. Furthermore, the paper addresses tax capacity and tax effort in the new member states. Finally, the paper looks at possible negative relationships between corruption and tax effort on the one hand and corruption and foreign direct investments on the other.EU enlargement, transition economics, tax effort, tax capacity

INCOME DISTRIBUTION POLICY IN THE NETHERLANDS: A PARADIGM SHIFT

This paper investigates which different views have occurred on the main lines of the Dutch incomes policy. To this end the implications of the incomes policies pursued by different cabinets have been analyzed, mainly since 1973. It appears that distributive policies are heavily influenced by a paradigm shift. In the 1970s, the Dutch government replaced its keynesian oriented economic policy making with a neoclassical framework. As a result, the government not only moved from an interventionist approach in the 1970s to a restrained attitude in the 1980s and 1990s, but also altered the institutional framework of its distributive policies by abolishing a number of policy instruments that had been created to influence the size distribution of incomes.Incomes policy, Netherlands