It would be careless for the government to have to re-openbenefit indexation

As the government reportedly plans to freeze most social security benefits for two years, before uprating them in line with wages rather than prices, Professor Deborah Mabbett investigates the politics of indexation

The regulatory rescue of the Welfare State

The regulatory state and the welfare state can be described in terms of contrasting pairs of ‘types of policies’ and ‘types of politics’ following Lowi (1972). The paradigmatic regulatory type of policy is market coordination, and its type of politics is nonmajoritarian, technical and supranational. The welfare state has redistribution as its paradigmatic type of policy, and the dominant type of politics is majoritarian, party-political and national. This paper dissects these distinctions. Public sector reforms mean that regulatory types of policy can increasingly be found within welfare service provision. Different arrangements for labour market coordination are integral to different welfare state regimes, and at the same time these regulatory arrangements are concerned with combating market failure and promoting efficiency. There are abundant examples of technical, expertocratic policy-making within the welfare state and a high level of supranational policy exchange. Delegation is important to the institutionalisation of the welfare state, as are nonmajoritarian commitments to social rights, secured for example for migrants. These findings cast doubt on the characterisation of welfare state policy-making as political and partisan. It is suggested that the interpenetration of regulatory politics enhances the robustness of the welfare state in the face of international market integration, while at the same time biasing policy towards the promotion of efficiency and suppressing the importance of solidaristic political values

Bringing macroeconomics back into the political economy of reform: The Lisbon Agenda and the 'fiscal philosophy' of EMU

The Lisbon Strategy supports reform of member states’ tax-benefit systems while the ‘fiscal philosophy’ of the EU postulates that governments should allow only automatic stabilisers, built into tax-benefit systems, to smooth aggregate income. We ask whether these two pillars of EU economic governance are compatible. By exploring how structural reforms affect fiscal stabilisation, we complement a political economy literature that asks whether fiscal consolidation fosters or hinders structural reforms. We conclude, based on simulations in EUROMOD, that Lisbon-type reforms may worsen the stabilising capacity of tax-benefit systems

Social regulation through anti-discrimination law: the EU and the US compared

This paper seeks to derive insights into the effect of economic integration on social policy by looking at the application of anti-discrimination rules to social policy categories. The normative motivation for rules prohibiting discrimination in market transactions can be distinguished from the normative basis for nondiscrimination in the relationship between a government and its citizens in social policy. However, the two spheres are closely related. Judicial decision-making, which is of central importance in a federal or multi-level governance structure, mediates this relationship and creates processes of transmission and spillover from market norms to social policy. The paper traces how these spillovers are handled by reviewing cases that have come before the US Supreme Court and the European Court of Justice. It shows that there are some differences in the legal framework in the two polities but also many similarities. However, the spillover process creates more and harder problems in Europe because welfare provisions at the state level are more developed

The lack of monetary sovereignty is not the reason Eurozone countries struggled during the crisis

One of the most widespread arguments about the Eurozone crisis is that countries such as Greece, Spain and Italy have been hamstrung by their lack of monetary sovereignty and the ability to devalue their own currency. Deborah Mabbett and Waltraud Schelkle assess this perspective by comparing the experiences of Greece with Hungary, which does not use the euro, and Latvia, which previously pegged its currency to the euro before joining the single currency in 2014. They find that while there are real problems with the crisis management in the Euro area, monetary sovereignty is not the solution

Independent or lonely? Central banking in crisis

The financial crisis has called our understanding of central bank independence (CBI) into question. Central banks were praised for bold interventions but simultaneously criticized for overreaching their mandates. Central bankers themselves have complained that they are ‘the only game in town’. We develop the second generation theory of CBI to understand how independence can turn into loneliness when a financial crisis calls for cooperation between fiscal authorities and the central bank. Central banks are protected from interference when there are multiple political veto-players, but the latter can also block cooperation. Furthermore, central banks in multi-veto-player systems operate under legal constraints on their financial stabilization actions. They can circumvent these constraints, but this invites criticism and retribution. More surprisingly, central banks have strategically invoked their constraints in order to gain cooperation from political authorities

Hegemony Without Stability: The fiscal and political vulnerabilities of monetary union. ACES Cases No. 2011.2

The crisis has forced the Euro area to establish an emergency fund that supports member states experiencing a sovereign debt crisis. The difficulties of coming up with such a fund for Greece and other Euro area members stands in marked contrast to the balance of payments support that non-Euro members like Hungary received, swiftly and quietly. In order to solve this puzzle, we first establish the difference between EU interventions and IMF programs and, second, trace the evolution of crisis management with France and Germany in the lead. The lens of hegemonic stability theory suggests that the Franco-German leadership is too weak to provide stability and the extensive use of conditionality is one symptom of this weakness. Providing incentives for cooperation "after hegemony" (Keohane) is the unresolved issues troubling the monetary union. Its dominant powers must acknowledge that markets perceive monetary union to be already politically more integrated than its lack of fiscal integration suggests

Expertise in pension trusteeship

Book synopsis: State pensions are the largest item in the UK social security budget, costing £96.7 billion in 2017/18. In the same year, 45.6 million people were members of UK occupational pension schemes (out of a total population of 66.4 million) and the total amount saved into workplace schemes in 2018 was £90.4 billion. A consequence of the pensions sector's large size has been that pensions law and social security law have become increasingly specialised areas of practice. Yet despite their social and economic importance and the fascinating legal issues they generate, pensions have not been the subject of sustained academic attention. This book starts to fill this gap by initiating a dialogue between practitioners and scholars working on pensions law and policy, groups who have much to learn from one another