Thursday, 31 May 2012

Competitiveness is Good for Social Welfare!

The most competitive countries in Europe (i.e. UK, Finland, Germany, Denmark) are also the ones with the highest social welfare spending, according to a report prepared by INSEAD and Booz & Company at the State of Europe conference in Brussels. Report co-author Ludo Van der Heyden says this means that as Europe grows together, it has more to share. But these same countries did not spend more than their competitiveness could support (see graph below).

"This shows there is no trade off between competitiveness and social spending; there are just bad allocations," he concluded, however, most respondents believed that social spending should NOT be centralized at the EU level but should remain a national priority.

There were some extremes at the country level regarding perceptions of competitiveness and social expenditures. In Poland more than 80% of respondents said they thought social systems were a deterrent to competitiveness, but the Hungarians strongly disagreed.

"Europe is not about the average," said Van der Heyden. "While the EU tries to raise the average, this is not to say that every country is to be 'average'."

Copyright INSEAD Knowledge 2012

No comments:

Post a Comment