THE PUBLIC-PRIVATE MIX IN SOUTH EUROPE

What changed in the last decade?

(a) How far have Europeanization trends, in parallel with endogenous (national, subnational) pressures, stimulated significant social reforms in these countries since the early 1990s?

(b) Has there been a substantial rearrangement in the boundaries between the public and private sector?

(c) What changes in regulation, institutional design, planning and delivery of social welfare have ensued and how are these changes linked to decentralization and regionalization processes that are highly prevalent particularly in Spain and Italy?

1. REFORM TRENDS

2. FINANCE AND EXPENDITURE TRENDS – REGULATION AND DELIVERY

3. OVERALL PERFORMANCE OF SE COUNTRIES ON THE BASIS OF THE LISBON STRATEGY OBJECTIVES

SHARED CHARACTERISTICS OF SOCIAL PROTECTION

IN ITALY, SPAIN, GREECE & PORTUGAL

•“delayed” development of welfare state arrangements

•key-role of the family/household as a clearing institution for the redistribution of resources,

•transfer-heavy social budget with a strong pension bias,

•an excessive burden placed on women for service provision,

•fragmented and emergency-driven social assistance leaving many of the needy groups unprotected.

Main Features

A male breadwinner / family care model combining a universalist element in health care?

Density of historical time ( i.e. very shortly –only a few years- after health reform laws were enacted in SE, the austerity era began, posing increased challenges and bringing the need for efficiency and cost control into the reform equation)

© M. PETMESIDOU 2007

All four countries faced serious fiscal constraints in their attempt to meet the EMU criteria.

1980s, expansionary phase1990s, austerity era, comprehensive social reforms2000s, recovery but also continuing changes in financing, regulation and delivery

•A common language for institutional change and policy reform emerged in the context of Europeanization

•Significant differences as to how each country responded to Europeanization so far - a formalistic absorption process in Greece - more profound changes in Italy, Spain & Portugal

•Europeanization runs parallel to an enhancement of multilevel governance through decentralization and a wider distribution of power among institutions at various jurisdictions, national, regional and local (Italy & Spain)

Major features of reform trends

•Trends run in opposite directions

•Reform meant more than a recasting of public expenditure

•Structural change took place on the basis or more or less consensual processes

1980 1990 2000 20041980-2004

(change)

Greece 12.2 22.0 25.7 26.0 +13.8

Italy 19.4 24.0 24.7 26.1 +6.7

Spain 18.2 19.9 19.7 20.0 +1.8

Portugal 14.7 16.3 21.7 24.9 +10.2

Germany 28.8* 25.4* 29.2 29.5 -

UK 21.5 22.9 27.1 26.3 +4.8

Denmark 28.7 28.2 28.9 30.7 +2.0

EU-12* 24.3* 25.3* 26.7 27.7 +3.4

EU-15 - - 26.9 27.6 -

Increases in social expenditure as per cent of GDP

© M. PETMESIDOU 2007

Public social expenditure over GDP (%)Source: OECD 2004

0,0

5,0

10,0

15,0

20,0

25,0

30,0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Year

%

Greece

EU-15

Italy

Spain

Portugal

© M. PETMESIDOU 2007

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

1990 1992 1994 1996 1998 2000 2002

pe

r c

en

t o

f G

DP

Scandinavian countries

Continental Europe (excluding accession countries)

UK & Ireland ("liberal regime")

South-European countries

Social expenditure trends in SE in comparison to the three North-European “worlds” of welfare capitalism

© M. PETMESIDOU 2007

1990 2000 2004Gap1*1990/

2004

Gap2* 1990/ 2004

GDP per cap.

2004

Greece 2311 3765 4830 50/57 60/67 75

Italy 3842 5626 6275 84/74 100/87 95

Spain 2304 3655 4438 50/52 60/61 89

Portugal 1562 3513 4082 34/48 41/56 66

Germany 4501 6573 7239 98/85 118/100 102

UK 3346 6087 6994 73/83 87/96 109

Denmark 4578 7316 8470 - 120/117 110

EU-15 3827 6211 7252 - - -

EU-25 - 5350 6188 - - -

Per capita social expenditure (in PPS) [*gap-1= in respect to the highest spender; gap-2= in respect to the EU-15 average;

GDP per capita as % of EU-15 average]

© M. PETMESIDOU 2007

40 3941 40

42

37

42 4139

49

32

44

35

44

36

4038

45

25 25 2426

22 22

17

2325

21

31

15

2624

29

22

28

3229

16 16

2119 19 19

13

18 18

8

17

1012

15 1512 11 12 11

0

10

20

30

40

50

60

%

Before any social tranfers

Afters pensions

After all social transfers

EU25 EU15

GRPT ES IT

BU

RO EE

CZ

PL

HUFR

DE BE

NL FL DK SE

Poverty rates before & after social transfers (SE countries in the EU 25 context, 2003)

© M. PETMESIDOU 2007

Health expenditure and the public-private mix 1990 1995 2000 2004 Heal th expendi ture as per cen t o f GDP Total Private Total Private Total Private Total Private Greece 7.4 3.4 9.6 4.6 9.9 4.7 10.0 4.7 Italy 7.7 1.6 7.1 2.0 8.1 2.3 8.7 2.2 Spain 6.5 1.4 7.5 2.1 7.2 2.0 8.1 2.4 Portugal 6.2 2.1 8.2 3.1 9.4 2.6 10.1 2.7 Heal th expendi ture p er cap i ta (PPP US$) Public Private Public Private Public Private Public Private Greece 453 391 650 600 850 766 1141 1021 Italy 1097 290 1104 430 1521 562 1852 615 Spain 688 185 861 332 1055 465 1484 610 Portugal 442 232 686 410 1145 479 1335 489

Source: OECD (2006)

© M. PETMESIDOU 2007

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Greece Italy Spain Portugal

Others

Private insurance

Out-of-pocket expenditures

Taxes

Social Security contributions

The public-private mix in health care financing

Source: OECD 2006

© M. PETMESIDOU 2007

Final Index

Information

society

In-nov-ation,R&D

Libe-raliz-ation

Net-work ind.

Fina-ncial serv.

Enter-prise

Soc. in-clu-sion

Sust. devel.

Denmark 1 5.76 5.53 5.15 5.58 6.24 6.28 5.63 5.49 6.17

Finland 2 5,74 5.41 5.90 5.58 5.93 6.29 5.24 5.35 6.23

Sweden 3 5.74 5.93 5.73 5.43 6.14 6.36 5.07 5.09 6.15

Netherlands 4 5.59 5.63 4.82 5.62 6.01 6.23 5.48 5.06 5.87

Germany 5 5.53 4.98 5.31 5.71 6.38 6.39 4.69 4.53 6.23

UK 6 5.50 5.61 4.82 5.59 5.97 6.47 5.13 4.74 5.69

Austria 7 5.30 5.24 4.55 5.35 5.87 6.15 4.43 4.75 6.09

Luxembourg 8 5.29 5.05 3.96 5.26 6.16 6.14 4.91 5.05 5.82

France 9 5.21 4.91 4.66 5.17 6.18 6.19 4.87 4.25 5.44

Belgium 10 5.15 4.44 4.67 5.25 5.84 5.91 4.77 4.83 5.47

Ireland 11 5.09 4.55 4.47 5.34 4.95 6.13 5.35 4.82 5.10

Source: World Economic Forum 2006

Performance in terms of the Lisbon Strategy objectives-1

© M. PETMESIDOU 2007

Final Index

Informa-tion

society

In-nov-ation,R&D

Libe-raliz-ation

Net-work ind.

Fi-nanc-

ial serv.

Enter-prise

Soc. in-clu-sion

Sust. devel.

Estonia 12 4.93 5.49 4.06 4.98 5.01 5.72 5.10 4.37 4.69

Portugal 13 4.64 4.06 3.81 4.74 5.37 5.66 4.50 4.10 4.90

Czech Rep. 14 4.53 4.10 3.85 4.98 5.16 4.84 3.99 4.44 4.90

Spain 15 4.49 3.93 3.89 4.62 5.41 5.65 4.33 3.63 4.48

Slovenia 16 4.44 4.50 3.96 4.30 5.07 4.88 3.76 4.02 5.00

Hungary 17 4.40 3.74 3.92 4.55 4.80 5.22 4.18 4.16 4.61

Slovac Rep. 18 4.38 3.97 3.44 4.82 4.76 4.84 4.33 4.09 4.76

Malta 19 4.38 5.22 3.23 4.46 4.64 5.44 3.83 4.35 3.84

Lithuania 20 4.31 3.97 3.69 4.18 4.88 4.96 4.57 3.95 4.26

Cyprus 21 4.28 3.90 3.30 4.46 5.02 5.12 4.25 4.30 3.86

Latvia 22 4.25 3.76 3.63 4.32 4.57 4.79 4.78 3.87 4.28

Greece 23 4.19 3.17 3.77 4.32 5.09 5.27 4.14 3.79 3.98

Italy 24 4.17 4.06 3.73 4.29 4.82 4.80 3.71 3.54 4.40

Poland 25 3.76 3.32 3.57 4.02 3.86 4.23 3.60 3.41 4.10

Performance in terms of the Lisbon Strategy objectives-2

© M. PETMESIDOU 2007

Overall performance and degree of inequality

Source: WEF and Eurostat data (our elaboration)

© M. PETMESIDOU 2007

Hungary

SwedenDenmark

Finland

UKNetherlandsGermany

FranceAustria

BelgiumIreland

SpainItaly

Slovenia

Portugal

GreeceLithuaniaSlovak Republic

Poland

Czech Republic

Romania

Bulgaria

3.0

3.5

4.0

4.5

5.0

5.5

6.0

2 3 4 5 6 7 8

Income share ratio (S80/S20 quintile ratio, Eurostat 2004)

Ove

rall

sco

re i

n r

esp

ect

to t

he

Lis

bo

n s

trat

egy

go

als

(WE

F 2

006)

Liberalization and level of social expenditure

Source: WEF & OECD data (our elaboration)© M. PETMESIDOU 2007

Greece

Poland

Czech Republic

Portugal

Hungary

Italy

Spain

Ireland AustriaBelgium

NetherlandsUK

Germany

FinlandDenmark

Sw eden

France

3.0

3.5

4.0

4.5

5.0

5.5

6.0

15.0 20.0 25.0 30.0 35.0

Social protection expenditure (per cent of GDP, 2004)

Lib

era

liza

tio

n s

co

re

(WE

F 2

00

6)

Employment protection and social inclusion score

Source: WEF & OECD data (our elaboration)© M. PETMESIDOU 2007

Turkey Portugal

Poland

Greece

Italy

Germany

France

Spain

Hungary Czech Republic

BelgiumSweden

Netherlands

Austria Finland

Denmark

IrelandUK

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

3.00 3.50 4.00 4.50 5.00 5.50 6.00

Social Inclusion Score (WEF 2006)

Em

plo

ymen

t p

rote

ctio

n in

dic

ato

r (O

EC

D 2

003)