Cultural Diversity, European Integration and the Welfare State
According to the “Neoclassical” approach, stemming from the Tiebout model, the main advantage of federalism lies in the possibility that individuals with similar tastes, including those related to risk-aversion and the provision of public goods, can cluster in the same jurisdictions. The starting point of this paper is a criticism of this approach. While the main advantage of federalism is related to the possibility of clustering heterogeneous individuals, the assumption of costless movement from one State to the other implicitly implies that individuals are homogeneous in some of other important characteristics. For instance, individuals, facing low mobility costs must have very minor cultural and linguistic differences. This hypothesis may approximate the U. S. situation but clashes with the case of European Union. Since Cultural-linguistic standardisation and the social protection can be regarded as two alternative insurance devices (one increasing the probability of alternative employment and the second providing some assistance in case of dismissal from the present employment) a culturally diverse Europe must necessary rely more on the Welfare State than the United States. The comparison with the U. S. clarifies the paradoxical problem of European integration. On the one hand, social protection is more necessary when cultural-linguistic differences make it expensive to cultural standardisation as a substitute for it. On the other hand, social insurance among different regions is more unlikely to be accepted when these cultural differences prevail. We argue that a possible way out of this dilemma is a system of mutual insurance among the European national welfare systems
|Date of creation:||Dec 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.deps.unisi.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pagano Ugo & Samuel Bowles, 2003.
"Economic Integration, Cultural Standardization,and the Politics of Social Insurance,"
wp64, Political Economy Research Institute, University of Massachusetts at Amherst.
- Samuel Bowles & Ugo Pagano, 2003. "Economic Integration, Cultural Standardization and the Politics of Social Insurance," Department of Economics University of Siena 408, Department of Economics, University of Siena.
- D'Antoni, Massimo & Pagano, Ugo, 2002. "National cultures and social protection as alternative insurance devices," Structural Change and Economic Dynamics, Elsevier, vol. 13(4), pages 367-386, December.
- Alberto Alesina & Enrico Spolaore, 1995.
"On the Number and Size of Nations,"
NBER Working Papers
5050, National Bureau of Economic Research, Inc.
- Pagano, Ugo & Rowthorn, Robert, 1994. "Ownership, technology and institutional stability," Structural Change and Economic Dynamics, Elsevier, vol. 5(2), pages 221-242, December.
- Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June.
- Giampaolo Arachi & Massimo D'Antoni, 2004. "Redistribution as Social Insurance and Capital Market Integration," International Tax and Public Finance, Springer, vol. 11(4), pages 531-547, 08.
When requesting a correction, please mention this item's handle: RePEc:usi:wpaper:414. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fabrizio Becatti)
If references are entirely missing, you can add them using this form.