S5 Ep28: Backstage: Policy principles for a new social contract

This episode of The Sound of Economics features Bruegel
senior fellow Zsolt Darvas in conversation with Maurizio Bussolo
and Bernadette Ségol about income inequality in Europe and
Central Asia, and the policy principles underpinning a possible
new social contract. 


Although income distribution in Europe and Central Asia reaches a
fairly egalitarian standard relative to the rest of the world,
the current levels of inequality among individuals and households
are a major cause of dissatisfaction. In the time of
globalisation and rapid technological change, when income
inequalities heavily affect people's security and well-being, the
demand for a new social contract (and hence welfare state) is
apparent. But what would a renewed social contract look like?


In this episode of Bruegel Backstage, senior fellow Zsolt Darvas
talks to Maurizio Bussolo, the lead economist for Europe and
Central Asia at the World Bank, and Bernadette Ségol, the former
secretary general of the European Trade Union Confederation.


The document that brings them together is the recently published
World Bank report, “Towards a New Social Contract: Taking on
Distributional Tensions in Europe and Central Asia”, co-written
by Maurizio Bussolo. It highlights the shortcomings of the
current systems both for taxes and transfers and for
labour-market regulation. The report sketches out the policy
principles to guide a potential new social contract, principles
that assume universal social assistance and insurance, labour
protection, and more progressive taxation. If implemented, the
report suggests, these measures would improve mobility and
flexibility, helping to overcome the inequality traps and provide
a broader, more just access to opportunities.


For further reading, you may consider Zsolt Darvas' blog post on
the EU income inequality decline, as well as a publication on the
hardships of achieving the EU's poverty target by the same
author.


This podcast was recorded following a Bruegel event, "Towards a
new social contract" on January 24th 2019.