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Title:Anatomy of policy complementarities PDF Logo
Authors:Orszag, Jonathan Michael
Snower, Dennis J.
Issue Date:1999
Series/Report no.:Discussion paper series / Forschungsinstitut zur Zukunft der Arbeit 41
Abstract:The analysis provides a new explanation for two widespread problems concerning European unemployment policy: the disappointingly small effect of many past reform measures on unemployment, and the political difficulties in implementing more extensive reform programs. We argue that the heart of these problems may be the failure of many European governments to implement broad-based reform strategies. Our analysis suggests that major unemployment policies are characterised by economic complementarities (in the sense that the effectiveness of one policy depends on the implementation of other policies) and political complementarities (in that the ability to gain political consent for one policy depends on the acceptance of other policies). Under these circumstances, incremental, small-scale adjustments of existing policy packages are doomed to failure. Our analysis suggests instead that the European unemployment problem should be tackled through “broad” reforms that exploit the salient economic and political complementarities among individual policy measures.
Subjects:Labor market policy
Economic complementarities
Political economy
Unemployment
Unemployment benefits
Taxation
Inequality
JEL:E61
H21
J64
J68
H23
E62
H55
H61
I30
H53
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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