A Daily Outsider Property
Working to Help transform our Conversation About Our World:
Monday, November 19, 2018
On Our World On This #Thanksgiving2018
As we go dark in our properties thru Thanksgiving here in the United States, we wanted to wish all the most joyous as we take stock of all that we're thankful for as we leave you all with this courtesy of the team at the World Bank:
October 2018. 246 pages. English Version. Paperback. ISBN: 978-1-4648-1353-5. Price: $45.00
Taking on Distributional Tensions in Europe and Central Asia
By Maurizio Bussolo, Maria Eugenia Davalos, Vito Peragine, and Ramya Sundaram
The growing economic fissures in the societies of Europe and Central Asia between generations, between insiders and outsiders in the labor market, between rural and urban communities, and between the super-rich and everyone else, are threatening the sustainability of the social contract. The institutions that helped achieving a remarkable degree of equity and prosperity over the course of several decades now face considerable difficulties in coping with the challenges presented by these emerging forms of inequality. Public surveys reveal rising concerns over inequality of opportunity, while electoral results show a marked shift to populist parties that offer radical solutions to voters dissatisfied with the status quo.
Figure 1. The social contract as a dynamic equilibrium
Figure 2. Distributional tensions along four dimensions are explored
There is no single solution to relieve these tensions, and attempts to address them will vary considerably across the region. However, this publication proposes three broad policy principles: (1) promote labor market flexibility while maintaining protection for all types of labor contracts; (2) seek universality in the provision of social assistance, social insurance, and basic quality services; and (3) expand the tax base by complementing progressive labor-income taxation with taxation of capital. These principles could guide the rethinking of the social contract and fulfil European citizens’ aspirations for growth and equity.