Welfare Policy Integration Inconsistencies

What purposes should social and labor market policy serve in increasingly interrelated economic systems, and do current arrangements serve them well in the European framework? This paper reviews historical experiences and theoretical issues, focusing in particular on assignment of decision power at different levels of governance and on theoretically clear and empirically apparent sources of incoherent and ineffective policy structures. It discusses proposals of “delayed integration” welfare provision, argues that organization of basic redistributive benefits is obsolete, and concludes that reform efforts should be better focused on reappraisal and modernization of social responsibilities at all levels of governance in the European Union’s economic system. _________________________________ This draft benefits from comments made on a differently titled version of the paper by the discussant, the editors, and other participants at the CESifo Delphi Conference, June 4-5, 2004.