Breaking the link? How European integration shapes social policy demand and supply

Abstract

How does European integration affect the welfare state? This paper argues that European integration has non-complementary consequences for the political economy of welfare spending: European economic integration increases popular demand for social spending, whereas European political integration decreases the supply of social spending. Thus, the conflicting implications of European integration essentially break the link between social policy preferences and social policy. Using statistical models that deal with the multilevel structure of the theoretical argument, we find a positive relationship between economic integration and support for social policy. In the second part of the empirical analysis, dynamic model specifications at the country level show that higher levels of political integration are associated with lower levels of social spending. Furthermore, we provide evidence that social policy responsiveness declines as political integration increases.