New ways of steering and governance in the public sector – and the impact of EU on welfare Lecture 5

How to manage the welfare state? Classical approaches based upon rational actors has shown not to be satisfactory Decision on buying things we know (food, for example) is one thing – another is personal care and welfare services in general Incentives (economic and others) can have a certain impact, but not in all areas and not always as strong as they used to be

Information as steering mechanism If individual’s are fully rational they could be influenced by information – however not all see all available information, and, others are not able or willing to grasp the content, for example, campaigns to live a better life Target groups can have different capacity – cf. distribution of influence and economics So considerations of managing the welfare state must include differences in different areas – and not necessarily be the same within all sectors of the welfare state

Governance forms Source of Rationality Forms of control Service delivery focus Procedural governance LawRulesUniversal Corporate governance ManagementPlans Target groups Market governance CompetitionContractsPrice Network governance CultureCo- production Clients

Evidence hierarchy Systematic Reviews Evidence Synthesis Randomized Controlled Trials (RCTs) Cohort Studies Case-control Studies /Reports Bacground Information - Expert Views

A new way to steer: nudging Pushing on method Make the right choice the easy choice Libertarian Paternalism Central is to create a model that promotes, for example, a healthy life style – good default options shall support this Can be used in the private as well as public sector

Discuss in small groups 1) Where can nudging be used 2) What might the problem be with the use of nudging?

A simple model for Europeanization and social protection EU- level development: Policy process, internal market, EMU, Enlargement Variable which might have an impact on how EU-policy influence nation states: Country size, Welfare state regime, EU –history, Political tradition, Competitiveness Member states reaction and changes: Welfare reform, Agenda for changes, Government’s answer to EU’s development

Growing de- and interdependency Development of supra-national institutions – and increasing strength Learning effects across countries Economic interdependency and collaboration among countries has increased – cf. the financial crisis

The historical development in the EU a few illustrations : Schuman, Coal- and Steel Treaty, Rome-treaty 1962 Common agricultural policy 1987 Internal market 1999 Amsterdam treaty – social charter – employment strategy 2009 Lissabon treaty 2010 Euro crisis 2020 Goals

Positive and negative integration Positive integration – willingness to create common solutions – including new institutions and power to supranational institutions Negative – especially seen done through the market and European Court of Justice Breadth or depth in collaboration ?

EU or national responsibility? Welfare state policies in principle a national task However: Free movement of labour Equality between men and women Health and safety at the workplace Reduce risk of social dumping – and guarantee the internal market – EU-directive on, for example, leave It is a question whether EU-implies a race to the bottom and/or social dumping What is welfare service and is this a task for nation states or the market? This opens for an increased role of the EU on welfare policies

Free-movement of workers 883/204 – shall ensure and support the free mobility of workers – and indirectly help in creating EU wide flexible labour markets There is a right to social security benefits when working in another EU-country, including familiy allowances and proportionate pension Laval-case 2007 – showed that it is important to know the minimum wage foreign companies will have to pay for workers in a country

Service directive - the Bolkenstein directive and debate The impact of the court has been increasing – Watt- case – Medical service is now part of the free- movement of goods and service– cf. also the Kohl- and Decker case Service direktive where originally very encompassing – ended although so that service of general interest has been left out However, one exception being if an operation not without reasonable delay can be offered then it is possible to have it in another country paid by the home country (the amount paid in the home-country)

A European understanding of how to conduct social policy? EU-level: For the time being especially use of the Open Method of Co-ordination Although there is programs to support vulnerable, including also regional support and common agricultural policy National level? National initiatives is still the most important with regard to welfare benefits and services

Open Method of Co-ordination Decide guidelines Establish indicators Nation states uses guidelines to implement national practice Peer-review process to monitor development Monitoring, evaluating and learning processes The effectiveness in changing welfare policy through the OMC can be discussed

Tendencies towards convergence At the overall level on social spending – yes, however still considerable differences within the EU ”Welfare tourism” should –all other things being equal – be expected to decline if there is economic convergence Depends on level for analysis how equal the welfare states are and can be

Summing -up New ways of steering is emerging – including use of evidence and nudging Governance forms seems increasingly to use different kinds of market elements EU’s impact and influence on national welfare states has been increasing in recent years