From Competition to Constitution: Races to Bottoms and the Rise of ‘Shadow’ Social Europe
Center for European Studies Working Paper Series
Harvard University Press
Center for European Studies Working Paper Series : 137
In this paper, I examine how the specific nature of economic integration in the European Union has affected member states’ redistribution policies over the last two decades. More precisely, I attempt to detail the effect of social-tax competition between member states within social mod-els, processes that I label “races to bottoms.” In this framework, I identify the emergence of an informal set of rules effectively constraining national redistribution policies in different ways, given the diversity of tax-social compacts in the EU. Because these rules are implicit and their ef-fect generally underestimated, I gather them under the notion of “shadow” social Europe. Hav-ing empirically assessed the impact of this dynamic on the “continental,” the “Nordic,” the “eastern” and the “liberal” social-tax compact, I finally try to present a normative perspective and some policy options on this matter.