Welfare regimes and the incentives to work and get educated

This paper examines whether differences in welfare regimes shape the incentives to work and get educated. Using microeconomic data for more than 100 000 European individuals, we show that welfare regimes make a difference for wages and education. First, people-based and household-based effects (internal returns to education, and household wage and education externalities) generate socioeconomic incentives for people to get an education and work which are stronger in countries with the weakest welfare systems, that is, those with what is known as ‘residual’ welfare regimes (Greece, Italy, Spain and Portugal). Second, place-based effects and, more specifically, differences in regional wage per capita and educational endowment and in regional interpersonal income and educational inequality, also influence wages and education in different ways across welfare regimes. Place-based effects have the greatest impact in the Nordic social-democratic welfare systems. The results are robust to the inclusion of a large number of people-based and place-based controls. Keywords:  welfare regimes, wages, education, incentives, regions, EU

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The global trend towards devolution and its implications

Globalisation has been accompanied by an equally global tendency towards devolution of authority and resources from nation-states to regions and localities that takes on various forms, depending upon which actors are driving the decentralisation efforts. The existence of a general trend towards devolution also has significant implications for efficiency, equity, and administration. The authors outline first the general drive towards devolution and then proceed to examine which countries are experiencing which forms of decentralisation. A theoretical argument emphasising the role of governmental legitimacy across various tiers of government is used to explain the diversity of devolution initiatives, drawing on examples that include Brazil, Mexico, India, China, the USA, and some European countries. Having supported their model of decentralisation, the authors then examine the implications of the widespread downward transfer of power towards regions. Some of the less widely discussed pitfalls of decentralisation are presented; caution in promoting devolutionary efforts is the prescription of this paper.

Is there a global link between regional disparities and devolution?

In this paper we present an examination of the possible correlation between rising income inequalities at the regional level and widespread devolutionary initiatives worldwide. When the responsibility and resource-based facets of decentralisation are taken together a marked congruency is evident between the two trends. Various spatial economic forces promote the emergence of core and peripheral regions, and devolution, by establishing the autonomy of these regions, allows these forces a greater impact. We argue that this is because decentralisation initiatives carry with them implicit fiscal, political, and administrative costs, which fall more heavily upon those regions with limited adjustment capacities, resulting in differential rates at which regions can capitalise upon the opportunities offered by devolution. The global tendency towards devolution therefore reflects a subtle, but profound, renunciation of the traditional equalisation role of national government in favour of conditions fostering economic and public competition and leading to greater development of initially rich and powerful regions to the detriment of poorer areas.

From identity to the economy: analysing the evolution of the decentralisation discourse

Few global phenomena have been as pervasive over the lifetime of Government and Policy as the drive towards decentralisation. The number of countries transferring authority and resources to subnational tiers of government has multiplied over the last twenty-five years. Yet the motives behind this trend remain relatively unknown. We explore these motives by analysing changes in the decentralisation discourse across a number of countries. We find that, while arguments about democracy and good governance have been at the heart of the reasoning for decentralisation, identity has progressively been relegated in favour of the economy and the promise of an economic dividend as the other main motivating factor. However, this shift from identity to the economy is highly contingent on who is driving the process. Despite noticeable shifts towards economic arguments in the discourse of nationalist and secessionist movements, identity remains strong in bottom-up discourses. In contrast, it has almost disappeared—if it ever existed—when the process of decentralisation is undertaken by the state or is encouraged by international organisations.