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EU Spending and Well-Being
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Throughout the history of European integration, economic wealth has increased to the benefit of citizens in the European Union (EU). However, inequalities in well-being persist within and between Europe’s regions, undermining the legitimacy of the EU in the eyes of citizens. This book investigates how the EU can use its regional funding programmes in ways that increase citizen well-being.

The book shows that while EU social investments improve labour market performance in rich regions, they exacerbate income inequality in poor regions. Based on this insight, the book presents a theory on the conditions under which EU funding will enhance well-being. Crucially, it argues the case for enhancing the inclusivity of EU growth, which yields the promise of a more legitimate and stronger union.

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Well-being is at the forefront of an ongoing debate about economic growth and the distribution of wealth in modern societies. It is widely believed that it is the responsibility of political decision makers to enhance the well-being of citizens. Even in the highly industrialized economies, however, as any careful observer of politics can attest, we face severe shortfalls in well-being. Since the global economic collapse of 2008, deteriorations in well-being in Europe – and how these inflame political conflict – have become increasingly visible and debated. This book argues that problems of well-being, such as income inequality, poverty and unemployment, are transboundary in today’s more globalized and interconnected world, and no longer amenable to resolution by national governments acting alone. There is now a clear need to better understand how the EU can help to enhance well-being within its borders.

The EU is currently struggling with a number of progress paradoxes. Despite unprecedented rates of economic growth in the 2000s and then again during the years of recovery from the 2007–12 global financial and economic crisis,1 we continue to see deep socio-economic divisions. Severe material deprivation leaves many citizens unable to afford basic goods such as a washing machine, to heat their home adequately or to take a one-week holiday away from home. In 2017, one in three Bulgarians and one in five Greek or Romanian citizens was severely materially deprived, as were about one in ten citizens of Croatia, Cyprus, Latvia, Lithuania, Hungary and Italy.

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EU regional policy appears to be a fertile ground for the integration of social goals such as poverty alleviation and social inclusion. It has a long history of pursuing social cohesion and an emphasis on active labour market policies, such as supporting vocational training schemes and micro-entrepreneurs, that resonates well with the idea of social investment. However, social investment is widely seen as a part of domestic welfare state policy, and there is strong pressure for this to remain in the hands of national governments (de la Porte and Natali, 2018).

Against this background, this chapter provides an in-depth analysis of the integration of social goals into EU regional policy, in terms of both formal rules and practice. A growing number of scholars have called for a more integrated approach by the EU that promotes growth and social goals at the same time (Vandenbroucke et al, 2011; Hemerijck, 2013; Heins and de la Porte, 2014; Aranguiz, 2019). Nonetheless, there has been no comprehensive analysis of the degree to which social goals have really been integrated into EU regional policy, which after all is the EU’s main tool to enhance growth.

This chapter fills that gap. It provides an overview of how the regional fund implementation processes function and analyses social ‘mainstreaming’ in EU regional policy. The concept of mainstreaming is useful here as it refers to the integration of issues into the institutions and policies of a particular organization.

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The time could not be more propitious to examine how EU spending can be used to promote well-being. More and more people in Europe are debating what the EU can do for the citizens of its member states, and what benefits it has really generated on their behalf. We live in an era of increasing public debate about the EU (Hooghe and Marks, 2009), where populist rhetoric is regularly deployed to exacerbate people’s anxieties and threat perceptions linked to economic insecurity (Hameleers et al, 2017). The UK’s decision to leave (so-called Brexit) has shown how economic divides have contributed to an erosion of favourable attitudes towards the EU, underlining that citizens care deeply about distributional issues (Algan et al, 2017).

Little is known about the extent to which EU spending actually improves people’s lives, despite notable evaluation studies (Bachtler et al, 2013, 2019). Most research on EU regional funding effects focuses on gross domestic product (GDP) growth or convergence. This approach is attractive insofar as it expresses a society’s wealth in a single measure. However, it neither considers the distribution of wealth nor the well-being and future prospects of individual people. The central argument in this chapter is about the effects of EU social investment in individuals at different stages of the life course on regional well-being. I argue that where EU spending reaches poor and otherwise disadvantaged people, by strengthening capabilities, it will enhance regional well-being.

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Almost ten years after the 2007–12 global financial crisis, EU citizens are still feeling the effects of social and economic insecurities to the detriment of perceived distributive justice (Eurofound, 2018).* This underlines the need for an analysis of patterns of well-being that takes into account whether people live in poor or rich regions in the EU. In this chapter, I will analyse well-being by comparing poor and rich regions, drawing on the distinction in EU regional policy between relatively poor Objective 1 or Convergence regions, which have a GDP below 75 per cent of the EU average, and the richer regions outside of Objective 1 or Convergence.

Progress in the study of subnational well-being in the EU has to date been hampered by the absence of comprehensive datasets. This chapter therefore introduces a novel quantitative dataset that includes various measures of regional well-being as conceptualized in Chapter Three. I discuss how the well-being indicators were created and which data sources were used to compile the dataset, which is unique in its regional coverage over the period from 1994 to 2013. The dataset has been collated at the NUTS 1 and 2 levels, since it is at these levels that regional fund payments are appropriated and administered (see Table A.1). This allows me to examine the various well-being problems encountered in regions that EU funding is intended to ameliorate.

After presenting the dataset, the chapter provides an analysis of patterns of well-being. This descriptive analysis reveals strong variations over time at the regional level both within and between EU member states, which underlines the importance of using regions as a unit of analysis in order to gain a nuanced understanding of well-being.

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This chapter explores a central argument of this book: that EU social investments will enhance well-being if they improve the capabilities of poor and otherwise disadvantaged people. Under the current legal framework and given domestic funding practices, however, positive well-being effects are only likely in rich regions.* Rich areas typically constitute the powerful urban centres around which most wealth has historically accumulated. Much of the inequality in the EU has resulted from the richest people and places pulling away from more rural parts of a region (Collier, 2018). The richer areas tend to have a more skilled regional workforce and better-functioning institutions (Charron, 2016), and their relatively high stock of human and social capital makes them attractive project partners for governments.

In this chapter, I show that this dynamic tends to work to the benefit of labour markets but works to the detriment of distributive justice. That EU funding of human capital can have positive effects on employment is known (Coelho, 2019; Mohl, 2016), but it is not sufficiently recognized that people in poor regions typically cannot take advantage of the related employment growth. Drawing on the Regional Well-Being Dataset introduced in Chapter Four, this chapter shows that EU social investments have positive effects on employment growth and unemployment, but that these effects are small and only hold in rich regions. Moreover, I find no robust effects of EU social investments on youth activity, infant mortality and self-reported health; adverse effects are found on income inequality in poor regions.

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The analysis in Chapter Five has given EU social investments a mixed bill of health: EU social investments foster employment in rich regions, which should be unsurprising given the strong focus on improving education, training and employment prospects. However, young people, who have been a key focus of the ESF over almost 30 years and are one of the most vulnerable groups to social exclusion in society, do not appear to benefit. In addition, EU social investments are found to have adverse effects on income inequality in poor regions, for which EU regional funding is mainly intended, and where people face pervasive inequality and extensive loss of opportunities.

This chapter seeks to provide a deeper understanding of why EU spending fosters employment but harms distributive justice. It explores the argument developed in Chapter Three that richer regions are more likely to capitalize on the effects of EU social investment on well-being, due to their superior endowments of human and social capital compared to poor regions. Consistent support for skilled labour in wealthy areas within regions implies that the already better off benefit the most from social investments. Building on this argument, this chapter identifies five main barriers to obtaining well-being effects from EU social investments. These barriers were identified based on an inductive analysis of news media evidence gathered from the daily bulletins provided by Agence Europe, qualitative and standardized interviews with domestic and EU policymakers conducted during and in the aftermath of the 2007–12 crisis (see Appendix A), and insights from previous literature on EU regional and social policy (e.g., Pierson, 1996; Chalmers, 2013; Schraff, 2014).

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This concluding chapter provides a brief summary of the overall argument of the book, as well as an initial discussion of how it can be applied more broadly to improve inclusive growth and the EU’s legitimacy in the eyes of citizens. The book closes by sketching areas for future research on the causes and consequences of well-being in the EU.

This book argues that EU regional development should be conceptualized in terms of regional well-being, which emphasizes the distribution of wealth within regions. Regional well-being refers to a condition of distributive justice in a region, whereby poor and otherwise vulnerable people are provided with the capabilities needed to achieve the good quality of life they are striving for.

A firmer grasp of the ability of the EU to use its funds to improve regional well-being in its member states could help to remove the current barriers to achieving lasting well-being effects. Especially since the early 2000s, the EU’s social goals have been increasingly mainstreamed into its legal framework governing regional development funding, and lifelong social investments in human capital have comprised about one fifth of the total structural and investment budget (Chapter Two). EU social investment co-finances domestic investment in education, healthcare and human capital, such as the renovation of university buildings and educational infrastructure, the provision of technical equipment, the building of medical centres and hospitals and support for vocational training projects or projects that integrate migrants into the labour market.

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This article focuses on transnational intermediary organizations in higher education and research. We conceive of intermediaries as organizations that are actively involved in transnational university governance without having formal access to or control over policy or governmental funding. Such intermediary organizations have in previous research been shown to play central roles in the development and circulation of new themes and ideas for how to manage universities and measure university performance. Intermediaries link different types of actors and act as translators of global themes. In this respect, they are decisive in policy formulation.

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This chapter focuses on transnational intermediary organizations in higher education and research. We conceive of intermediaries as organizations that are actively involved in transnational university governance without having formal access to or control over policy or governmental funding. Such intermediary organizations have in previous research been shown to play central roles in the development and circulation of new themes and ideas for how to manage universities and measure university performance. Intermediaries link different types of actors and act as translators of global themes. In this respect, they are decisive in policy formulation.

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