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The Netherlands: Transforming a Market Economy
Abstract and Figures
The striking turnaround in the Netherland's economic performance over the past decade and a half has attracted widespread attention. Emerging from deep recession and high unemployment in the early 1980s, the economy shifted to a pace of growth more rapid than that in neighboring economies, and posted a rise in employment close to that in the United States. Even adjusted for an increase in part-time work, job creation in the Netherlands has compared favorably with the experience elsewhere in Europe. This impressive performance was rooted in policy reforms that included a firm monetary anchor, tight control over public expenditure, and reduced intervention in the economy. With notable wage moderation, and broad 'ownership,' the reforms have been sustained over an extended period, exercising mutually reinforcing effects. Economic reform in the Netherlands is far from complete - with major challenges remaining in the area, among others, of long-term and low- skill unemployment. Nonetheless, this experience deserves to be studied in order to distill elements that may be relevant to other countries - and indeed to the task of improving further the performance of the Dutch economy.
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... In ruimere zin verwijst het beleidsmatige poldermodel naar een geintegreerd beleid van loonmatiging, lastenverlichting en terugdringing van de collectieve uitgaven, deregulering en koppeling van de gulden aan de Duitse Mark (zie Baartman en Van de Kerkhof, 1997;Pallada, 1999). Watson et al. (1999) merken terecht op over het gevoerde beleid dat dit geen Nederlands wonder is, noch uniek Nederlands is. Het is een standaardoplossing voor de bestaande problemen in de jaren tachtig, die in elk leerboek economie kan worden teruggevonden. ...
... De gunstige loonontwikkeling in de jaren tachtig kan worden verklaard uit de hoge werkloosheid, de daling van de sociale zekerheidspremies en de belastingen als gevolg van de ontkoppeling van de ambtenarensalarissen en de sociale zekerheidsuitkeringen. Daamaast hebben de snelle groei van de beroepsbevolking en de snelle stijging van de participatiegraad van vrouwen bijgedragen aan de loonmatiging ( CPB , 1991 ;Watson et al., 1999). De loonmatiging werd dus bevorderd door lastenverlichting en het achterblijven van de uitkeringen bij de loonontwikkeling en door de hoge groei van het arbeidsaanbod, die via de werking van de arbeidsmarkt de loonvorming onder druk zette. ...
... Per saldo zal de appreciatie een gunstige uitwerking op de economische groei hebben. Onderzoek toont evenwel aan dat de appreciatie van de gulden na 1985 de winstgevendheid van het N ederlandse bedrij fsleven en daarmee de werkgelegenheid in de exporterende bedrijven heeft aangetast (Knoester et al., 1995;Watson et al., 1999). Echter, in tegenstelling tot bijvoorbeeld Duitsland is in Nederland de koersstijging meer dan gecompenseerd door de matiging van de lonen (zie Van Riel en Metten, 1996;Vijselaar, 1996). ...
Waar heeft Nederland het succes aan te danken? Gaat het poldermodel aan haar eigen succes ten onder of komt de bedreiging vooral van buitenaf? Delsen concludeert dat het Nederlandse poldemodel haar einde nadert. De dijken van het poldermodel worde nsystematisch aangetast. De door Paars ingevoerde marktwerking betekent een verregaansde aanpassing van de unieke Nederlandse economische orde. Het primaat van de markt heeft onder meer geresulteerd in fl;exibilisering van de arbeidsmarkt, decentralisatie van de loonvorming, "modernisering" van de sociale zekerheid, meer concurrentie op de produktmarkten en liberalisering en competitie op de financiele markten.
Meer marktwerking binnen de Nederlandse sociaal-economische verhoudingen betekent eveneens dat de doelstelling van het bedrijfsleven verander: het streven naar resultaten op korte termijn (hofe beurskoersen) treedty in toenemende mate in de plaats van het overleg tussen management, aandeelhouders en werknemers, gericht op lange termijn doelstellingen, zoals continuiteit.
De ppolder-economie staat ter discussie. Delsen gaat na wat hiervan de economische en sociale implicaties zijn. Hij formuleert een aantal beleidsalternatieven. Naar zijn mening zijn sociale cohesie en stabiliteit bevorderlijk voor het ondernemingsklimaat en hebben de overlegeconomie en de verzorgingsstaat een rol te vervullen.
... se on employees' wages, the employers, on the other hand, accepted the decrease on working time and instruments like job sharing. The agreement was aiming at reducing the unemployment level by early retirement policies and part-time work opportunities. Up until this agreement, the workers' wages was increasing automatically according to wage index (Watson et. al. 1999). Therefore, Wassenaar Agreement is accepted as a cornerstone of Dutch labour market history. . ...
... Increased flexibility, moderate real wage growth and active support for job-seekers, all seem to help reduce unemployment and raise employment. Evidence from Ireland and the Netherlands suggests that making work relatively more rewarding helps to reduce inactivity and unemployment (Watson, Halikias, Bakker and Martijin, 1999). ...
Over the past three decades European countries have been coping with problems of high unemployment, and they need rigid labor market improvements. Countries tried to find strategies to decrease unemployment by using different methods, such as wage moderation, income tax cuts, tightening of unemployment benefits, reduction in barriers to part time work, and education programs. This paper examines methods which have been proven to be successful in Ireland and Netherlands. By looking at its implications it tries to give strategic solutions to countries as Bosnia and Herzegovina, since it is coping with the same problem. This paper analyzes problems of unemployment with special focus on the youth unemployment in Bosnia and Herzegovina.
The article analyses and compares the socioeconomic performance of Germany and the Netherlands over the passed two decades focussed on employment, income inequality and poverty. Policy makers in both countries consider a paid job the ultimate guarantee for social security and a remedy against poverty and social exclusion. The increased inequality of the primary and secondary income distribution resulted in a higher poverty rate in both countries. Moreover, a polarisation between the poor and the rich developed. In the Netherlands this was accompanied by strong employment growth, and in Germany by a drop in employment. This divergence is explained by Dutch wage cost moderation. It is concluded that the income policy adhered to pursues conflicting objectives: increasing the incentive to work also increases differences in income and poverty. Policymakers should not only occupy themselves with income distribution for political and social reasons, but also because of the long-term consequences of income distribution for economic growth, and hence employment. Policy should focus on more jobs and upward income mobility. In spite of the recommendations of the Hartz commission, promotion of part-time employment is a better route to create employment than temporary or agency work.
A number of advanced economies carried out a sequence of extensive reforms of their labor and product markets in the 1990s and early 2000s. Using the Synthetic Control Method (SCM), this paper implements six case studies of well-known waves of reforms, those of New Zealand, Australia, Denmark, Ireland and Netherlands in the 1990s, and the labor market reforms in Germany in the early 2000s. In four of the six cases, GDP per capita was higher than in the control group as a result of the reforms. No difference between the treated country and its synthetic counterpart could be found in the cases of Denmark and New Zealand, which in the latter case may have partly reflected the implementation of reforms under particularly weak macroeconomic conditions. Overall, also factoring in the limitations of the SCM in this context, the results are suggestive of a positive but heterogenous effect of reform waves on GDP per capita.
Since the mid-1980s, the Netherlands seems to have shifted from a European pattern of rapid wage growth and low employment creation, to a more Anglo-Saxon pattern of low wage growth and high employment growth. The shift towards moderate wage costs growth was partly the result of a change in union behaviour, but cuts of taxes and social security contributions, and the rapid increase of the labour force (driven in large part by increased participation of women) also played a role. However, while employment creation has been rapid, this has mainly benefited new entrants on the labour market; hidden unemployment remains very high and has fallen only recently.
The late 1960s and early 1970s can now be described as the heyday of demandmanaged macro-economic policy making. That certainly was the case in the Netherlands. The combination of Keynesian oriented demand management policies, the increasing relevance of the CPB1, the Dutch Bureau for Economic Policy Analysis, and the use of tailored macro-models had created a climate, within which many economists, policy-makers and civil servants believed they knew how the economic development could be steered in an optimal way. How disappointed it must have been during the 1970s and early 1980s, when it became clear that Keynesian-oriented demand management policies could not prevent the return of a long period with sluggish growth, rising unemployment, high inflation rates and increasing budget deficits. Whatever policy was applied in those years-more government expenditures, lower taxes, investment subsidies and the like-, they all failed in restoring economic development back to its stellar performance of the 1960s. The Keynesian paradigm did not work properly anymore, a message which was, at that time, difficult for many people to accept. For a long time, the old views were still prevailing but at the end of the 1970s new ideas burst through, thereby demolishing much of the confidence people had in economic policies and government interventions in general.
How capital openness influences the wage-setting process is a topic that has been discussed extensively in the literature on European industrial relations. One well-known hypothesis asserts that high capital openness induces employers to de-coordinate the wage-setting process, if wage costs have been under poor control. This article provides a critical review of the hypothesis, arguing that it holds only if governments can provide flexible accommodating policies for employers during the period of institutional transition. If such policy options are not available, which is true when governments are committed to European monetary integration, the hypothesis does not hold. This claim is tested with a Boolean qualitative analysis of 11 European countries, focusing on the periods from the 1970s to early 2000s.
In postwar Western Europe social policies in the wider sense relied in many countries on neo-corporatist policies of implementation. Since the 1980s such policies have ceased to be as dominant as they used to be, being associated with what has been called “policy communities” and “policy networks”. As far as the reforms pursued by many countries in order to readjust their economies and labour markets are concerned, significant shifts of such a kind were observed. Illustrations of these trends are presented in a comparative section. We attempt to demonstrate the dual structures of social policy formation and implementation, i.e. neo-corporatist and network/policy community policies, and to discuss the “how” of such policies, i.e. their “raison d’être” and their “real world” enforcement. Against a background of various semi-corporatisms and adversarial trade union politics, Greece is trying at the moment to adopt this pattern in several social policy areas, though this is not yet quite visible. Neo-corporatism is also enhanced. We attempt to show where neo-corporatism is tried (e.g. certain “social dialogue” structures) and where policy communities are encouraged (e.g. public health, local social policies, etc.). Sometimes the boundaries between the two systems are blurred, with some social dialogue committees appearing as quasi-policy communities. Finally we endeavour to examine the outcomes of such policies and to see their inner logic against the theoretical background. The concept of multilevel governance as a wider policy instrument which incorporates both the above systems is of special interest here.
This book focuses on describing policy instruments in different countries. Its purpose is not only descriptive but also, to some extent, advocatory. We believe that economic instruments can make an important contribution to an environmentally less disruptive path of development. The design of economic instruments is however a fine art and depends among other things on their political acceptability and this acceptability is of course influenced by experience. It is therefore important to provide information on the use of policy instruments in other countries. Policies are currently developing quite fast and thus a book such as this one can inevitably not capture more than a "snapshot" view at a single moment of time. We would hope that the book encourages more experimentation with economic instruments and that countries will make a fuller use of the whole arsenal of economic policy instruments. If the book does succeed in this sense then it will soon become dated as policies change -but that would be a price well worth paying! The book combines a dozen country monographs together with a few international surveys on particular topics (gasoline pricing, vehicle regulations, acid rain, deforestation and global warming). These papers are intended to illustrate the diversity of policy options available. The actual policies adopted depend on economic as well as ecological conditions. The country studies cover two "Western" countries and then concentrate on formerly planned and developing countries. They show that economic instruments are still generally thought of as new and innovative.
Germany, Europe’s monetary anchor: what could have been more inconceivable just after the Second World War, when the European countries, struggling with colossal overliquidity consequent on the forced financing of Germany’s war efforts, the contraction of the real economic sector and the bilateral balance-of-payments surpluses vis-à-vis Germany, were compelled to undertake currency reforms? Yet Germany became Europe’s monetary anchor, thanks to the vigour of its economic build-up during the 1950s and 1960s, and its monetary authorities’ quest for stability. Thanks also to the collapse of the Bretton Woods system in the early i970s, which created a need for a new anchor for the European exchange rates; the predominance of the German economy made the Deutsche mark the obvious choice.
In order to keep the autonomous car on a road, using the autodriver algorithm [1], kinematic condition of steering has been used to set the steer angles such that the kinematic center of rotation is on the road curvature center. The road and tire characteristics, along with the dynamics of the moving vehicle cause the vehicle to turn around another point that is not necessarily at the road curvature center. In other words the position of the dynamic turning center is different from the kinematically calculated one. Steady-state responses have been used, to produce a new method for finding the steer angles which will result in a much closer dynamic response to the actual road. The method and the proof have been explained. It is used for determining the steer angles for a sample road, and validated by comparing the results using the kinematically calculated steering angles.
Deregulation
A political economy analysis
Lack of urgency explains why continental Europe trails in the deregulation process. Yet there are lessons to be learnt from deregulation elsewhere. This paper reviews the situation and focuses on the political preconditions for successful deregulation. It finds a clear negative relationship between regulation and economic performance. It characterizes European countries by the degree of regulation of labour and product markets, and finds that the latter seems to be more important for economic performance. Finally, it notes the importance of a proper management of the deregulation effort – which may include some re-regulation: deregulation is more likely to succeed the more transparent the economic benefits, and the more clearly stated the objectives and the time schedule.
—Kees Koedijk and jeroen Kremers
National policies towards the regulation of the telecommunications industry have undergone significant change in response to technological progress and increasing competition. This article discusses the consecutive revisions of the Swiss regulatory framework during the 1990's and presents lessons to be drawn from this process. After reviewing the Telecommunications Act (Fernmeldegesetz; FMG) 1992 and the reasons for its revision, this article presents the most important prescriptions of the FMG 98 concerning the licence regime, universal service, and interconnection. The implementation of the FMG 98 has led to a fundamental change in regulatory policy. However, transitional rules appear to promote excessively slow adjustments in the current industry configuration.
Financial sector liberalization, both domestic and in cross-border transactions, was a major force behind the gradual move to indirect controls and the shift toward full reliance on exchange rate targeting in the Netherlands. This paper analyzes the different steps in this process, discusses the main arguments behind the gradual approach, and draws lessons for other countries involved in this process. The paper argues that reforms in the financial sector, liberalization of the capital account, adjustments in supervision and regulation, and modernization of monetary management are strongly interrelated and should be part of a comprehensive reform strategy.