Title Toward a New Social Contract
Subtitle Taking on Distributional Tensions in Europe and Central Asia
Author Maurizio Bussolo, María E. Dávalos, Vito Peragine, Ramya Sundaram
ISBN 9781464813535
List price USD 45.00
Price outside India Available on Request
Original price
Binding Paperback
No of pages 252
Book size 203 X 267 mm
Publishing year 2019
Original publisher The World Bank
Published in India by .
Exclusive distributors Viva Books Private Limited
Sales territory India, Sri Lanka, Bangladesh, Pakistan, Nepal, .
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“This report contributes to a better understanding of distributional tensions in Europe and the associated polarization in voting behavior. Populists are capitalizing on these tensions: they raise the relevant issues providing the wrong answers. The evidence collected for this study on inequality between generations, occupations, rural versus urban areas, and social mobility will be very useful for those who aim at providing the right answers.”

Tito Boeri, Professor of Economics, Bocconi University, and President of the Italian Social Security Administration

“A magisterial analysis of the challenges of taking on 21st-century inequality with 20th-century welfare institutions. Can these institutions be recast to handle rising inequality, precarity, distrust, and dissatisfaction? Or is an altogether new framework needed? This report achieves what everyone thought was impossible: a truly dispassionate analysis of what it would take to build a workable compact for the 21st century.”

David B. Grusky, Professor of Sociology and Director of the Center on Poverty and Inequality, Stanford University

“The recent rise of populism in Europe underscores the timeliness of this comprehensive analysis of a key issue relevant both for Europe and for the rest of the world: how (and whether) policy makers can assure that markets deliver aggregate and distributional outcomes that the public perceives to be fair. The authors apply cutting-edge methodologies to the wealth of disaggregated data and produce highly relevant policy recommendations. A must-read for policy makers and for politicians who want both to win elections and to keep electoral promises.”

Sergei Guriev, Chief Economist, European Bank for Reconstruction and Development

“This report presents a lucid analysis on how growing horizontal inequalities between age groups, occupations, geographic location, and persistent inequality of opportunity are eroding the social contract in Europe and Central Asia. A must-read to understand the emerging political dynamics in the region, this report also offers a range of policy options that can address the growing social tensions and support sustainable shared prosperity.”

Nora Lustig, Samuel Z. Stone Professor of Latin American Economics and Director of the Commitment to Equity Institute, Tulane University


Europe and Central Asia Studies

Europe and Central Asia Studies feature analytical reports on main challenges and opportunities faced by countries in the region, with the aim to inform a broad policy debate. Titles in this regional flagship series undergo extensive internal and external review prior to publication.



About the Authors and Contributors



Regional Classifications Used in This Report

Overview • Distributional Tensions and the Need to Rethink the Social Contract • Equity: A Key Aspiration in the Region • Balancing Markets, Policies, and Preferences • The Market-Generated Distribution of Incomes • Public Policy Responses • Preferences for Equity • Fissures in the Social Contract • Looking Ahead: Public Policies for a Stable Social Contract • Conclusion • Notes • References

Chapter 1: Introduction • Emerging Distributional Tensions in Europe and Central Asia • The Potential Implications for the Social Contract • Is a Rethinking of the Social Contract in the Region Warranted? • Notes • References

Chapter 2: Are Distributional Tensions Brewing in Europe and Central Asia? • Inequality across Individuals in Europe and Central Asia • Labor Market Polarization and the Shifting Demand for Skills • An Increasing Generational Divide, and the Young Are Losing Ground • Persistent Spatial Disparities across the Region • Rising Inequality of Opportunity, Particularly in the East • Distributional Tensions and the Path to a Middle-Class Society • Annex 2A: Statistical Tables • Notes • References

Chapter 3: Are Public Policies Equipped to Respond to Distributional Tensions? • Labor Markets Are Changing, and Policy Is Not Ensuring Equal Protection • The Impact of Tax and Transfer Systems on Income Redistribution • Limited Labor Mobility Affects the Opportunities in High-Productivity Areas • Annex 3A: Decomposition Analysis: Drivers of Change in Redistribution • Annex 3B: Policy Changes That Have Contributed to Redistribution • Annex 3C: The Impact of Taxes and Transfers on Redistribution • Notes • References

Chapter 4: The Social Contract: Do Distributional Tensions Matter? • Introduction • The Third Component of the Social Contract: The Preference for Equity • There Are Fissures in the Social Contract in the Region • Notes • References

Chapter 5: How Can the Stability of the Social Contract Be Restored? • Introduction • Promoting Growth and Protecting People • Extending Social Protection to Everyone • More Progressive Taxation • Reducing Inequality of Opportunity through Improved Services • Conclusion • Notes • References

About the Authors:

Maurizio Bussolo, Lead Economist in the Chief Economist Office for Europe and Central Asia, has been working on quantitative analyses of economic policy and development with research interests spanning both micro- and macroeconomic topics. He previously worked at the Organisation for Economic Co-operation and Development (OECD), the Overseas Development Institute in London, and Fedesarrollo and the University of Los Andes in Colombia. He has extensively published in peer-reviewed journals on trade, growth, poverty, and income distribution. He holds a PhD in economics from the University of Warwick.

María E. Dávalos is Senior Economist in the Poverty and Equity Global Practice. She joined the World Bank in 2010 and has worked in the Latin America and the Caribbean region, as well as the Europe and Central Asia region, on poverty, inequality, economic mobility, migration, and gender. She obtained a master’s degree in economic policy management from the Centre for Studies and Research on International Development (France) and a PhD in economics from Fordham University.

Vito Peragine is Full Professor of Economics at the University of Bari. Previously, he was Lecturer in Economics at the University Carlos III of Madrid. He has published widely in the fields of inequality, poverty, and normative economics. He serves on the editorial boards of the Journal of Economic Inequality and the Review of Income and Wealth. He holds a PhD in economics from the University of York (U.K.).

Ramya Sundaram is Senior Economist in the Social Protection and Jobs Global Practice. She has extensive experience in advising governments on improving the effectiveness and coverage of social protection systems, on labor market and activation systems, on measurement and alleviation of poverty, and on inequality and inclusion. Ramya has a PhD in economics from the University of Pennsylvania and was Assistant Professor of Economics at the University of Arizona prior to joining the World Bank.

Target Audience:

This book will be useful to people interested in social contract, globalism, employment and inequality.

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