What to Reform in the European Budget? Some Reflections on the Stakes of the Current Budget Review Process
The EU budget is the financial tool supporting European integration. The way it has developed over decades, both as concerns revenues and expenditure, superposed to a complex decision-making process, where member states retain veto rights in crucial respects, means that it currently displays a significant inertia, while its size and structure are not the most appropriate for endowing the Union with the means allowing it to best react to the present-day challenges. Tensions are also rising between the national interests of individual members and the common interest, which previous attempts to reconcile by way of special treatments granted to some countries are clearly unsustainable, while inducing additional rigidities to the budgetary construction. This obviates the need for a comprehensive reform, which the 2008/2009 budget review that the Commission was mandated to undertake may set in motion. The following paper attempts at taking stock of the most significant problems in need of a solution and to explore the most appropriate ways available for tackling them.
INTEGRATING THE MACRO-ECONOMIC DIMENSION INTO THE EU BUDGET: REASONS, INSTRUMENTS AND THE QUESTION OF DEMOCRATIC LEGITIMACY SEBASTIAN DULLIEN and DANIELA SCHWARZER
The EMU has been designed without an instrument for automatic fiscal stabilization on the European level. We argue that the macro-economic dimension should be taken into account more strongly in the debate on EU and EMU budgetary governance in order to contribute to the development of a coherent and efficient budgetary system. Based on new empirical data, this article suggests that fiscal stabilisation on the national level has likewise worked insufficiently in the EMU. This is suboptimal if the EU seeks to reach its self-defined targets of the Lisbon Agenda. Recent theoretical contributions suggest that a positive macroeconomic environment is key to productivity growth and structural reform. There are hence strong economic arguments for rethinking the set-up for fiscal stabilization policies in the EMU. We assess the major weaknesses of the current EU and EMU budgetary systems and suggest three remedies to the underperformance of automatic stabilisers: making EU-expenditure sensitive to the cyclical situation of the recipient country, introducing an EU corporate tax upon the upcoming revision EU budget before 2013 and setting up a European unemployment scheme. The paper likewise discusses the legitimatory and institutional requirements of such a new EU
The effect of family size on parents' labor supply and occupational prestige: Evidence from Taiwan and Mainland China
Abstract This paper studies the effect of family size on parents' labor supply and occupational prestige, using the censuses of both Taiwan and Mainland China. We rely on the exogenous increase in child quantity that results from having twins at the first birth. Our results indicate that an increase in family size has negative effects on the labor supply of mothers, but not of fathers, in both Taiwan and Mainland China. In addition, we find that in Taiwan fathers tend to switch to occupations with lower prestige scores in response to an increase in family size. However, the negative effect of family size on occupational prestige is not observed in Mainland China, where the occupational mobility is low.