Work

Bringing Macroeconomics Back into the Political Economy of Reform: the Lisbon Agenda and the ‘Fiscal Philosophy’ of EMU*

Year: 2007

Type: article

Abstract: The Lisbon Strategy supports reform of Member States' tax‐benefit systems while the ‘fiscal philosophy’ of the EMU postulates that governments should allow only automatic stabilizers, 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 stabilization, we complement a political economy literature that asks whether fiscal consolidation fosters or hinders structural reforms. Using EUROMOD, a tax‐benefit model for the EU‐15, we identify the connections between specific tax and benefit reforms and the size of the stabilizers. We conclude that Lisbon‐type reforms may worsen the stabilizing capacity of tax‐benefit systems.

Source: JCMS Journal of Common Market Studies

DOI: 10.1111/j.1468-5965.2007.00704.x

Authors: DEBORAH MABBETT, WALTRAUD SCHELKLE

Institutions: Birkbeck, University of London, London School of Economics and Political Science

Language: English

Topic: Social Policy and Reform Studies

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

Open Access status: green

Funder: European Commission

OpenAlex ID: W1982420182