Weathering the Storm: Consociational Democracy and Crisis Management in the Netherlands
Berlin : Peter Lang
Comparative Regional Integration Studies ; 1
InKim, Y.; Széll, G. (ed.), Economic Crisis and Social Integration, pp. 71-94
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Kim, Y.; Széll, G. (ed.), Economic Crisis and Social Integration
SubjectDistributional Conflicts in a Globalizing World: Consequences for State-Market-Civil Society Arrangements
The Dutch response to the economic crisis emphasizes stabilizing the domestic financial system and mobilizing the labour market so that Dutch firms and workers are well-prepared to take advantage of the expanding economy when the current recession ends. This approach has been heavily conditioned by two central elements of the Dutch political economy. First, the existence of a mature, comprehensive welfare state provides ‘automatic stabilizers’ during economic downturns; even if governments ‘do nothing’, social policies (particularly unemployment insurance) are an important source of demand stimulus. Second, the norms of political and economic decision-making in a consociational democracy like the Netherlands dictate that any response to the economic crisis reuires time-consuming, detailed compromises that include the social partners. The government, backed by the social partners, announced a stimulus package in late March 2009 that provides €6 billion in additional spending in 2009 and 2010 for environmentally sustainable investments, including subsidies for energy-efficient cars and houses. The deal also includes extra funds (€220 million) for fighting youth unemployment. The government’s approach to fight the crisis is not limited to short-term goals. The crisis package announced in March 2009 relies on stimulating consumption in the short term, restoring budget balance 6 Abstracts and reducing public debt in the medium term, and working towards the sustainability of public finances in the long term. The latter specifically includes dealing with the health care and public pension costs associated with population ageing.
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