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The Open Method of Coordination (OMC) as an Evolutionary Learning Process

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  • Ania, Ana B.
  • Wagener, Andreas

Abstract

We interpret the Open Method of Coordination (OMC), recently adopted by the EU as a mode of governance in the area of social policy and other fields, as an imitative learning dynamics of the type considered in evolutionary game theory. The best-practise feature and the iterative design of the OMC correspond to the behavioral rule "imitate the best." In a redistribution game with utilitarian governments and mobile welfare beneficiaries, we compare the outcomes of imitative behavior (long-run evolutionary equilibrium), decentralized best-response behavior (Nash equilibrium), and coordinated policies. The main result is that the OMC allows policy coordination on a strict subset of the set of Nash equilibria, favoring in particular coordination on intermediate values of the policy instrument.

Suggested Citation

  • Ania, Ana B. & Wagener, Andreas, 2009. "The Open Method of Coordination (OMC) as an Evolutionary Learning Process," Hannover Economic Papers (HEP) dp-416, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    • Handle: RePEc:han:dpaper:dp-416
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    1. Ania, Ana B. & Wagener, Andreas, 2016. "Decentralized redistribution in a laboratory federation," Journal of Urban Economics, Elsevier, vol. 93(C), pages 49-59.
    2. Grégoire Rota-Graziosi, 2016. "Implementing Tax Coordination and Harmonization through Voluntary Commitment," Working Papers halshs-01332058, HAL.
    3. Creutzig, Felix & Goldschmidt, Jan Christoph & Lehmann, Paul & Schmid, Eva & von Blücher, Felix & Breyer, Christian & Fernandez, Blanca & Jakob, Michael & Knopf, Brigitte & Lohrey, Steffen & Susca, Ti, 2014. "Catching two European birds with one renewable stone: Mitigating climate change and Eurozone crisis by an energy transition," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 1015-1028.
    4. Fei Shi, 2015. "Long-run technology choice with endogenous local capacity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(2), pages 377-399, June.
    5. Verena Hachmann, 2011. "From Mutual Learning to Joint Working: Europeanization Processes in the INTERREG B Programmes," European Planning Studies, Taylor & Francis Journals, vol. 19(8), pages 1537-1555, August.
    6. Sebastian Strunz, Erik Gawel, and Paul Lehmann, 2015. "Towards a general Europeanization of EU Member States energy policies?," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    7. Ana B. Ania & Andreas Wagener, 2021. "Laboratory federalism with public funds sharing," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1047-1065, July.

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    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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