What Kind of EU Fiscal Capacity? Evidence from a Randomized Survey Experiment in Five European Countries in Times of Corona

53 Pages Posted: 13 Aug 2020

See all articles by Roel Beetsma

Roel Beetsma

affiliation not provided to SSRN

Brian Burgoon

University of Amsterdam

Francesco Nicoli

University of Amsterdam - Amsterdam Institute for Social Science Research (AISSR)

Anniek de Ruijter

affiliation not provided to SSRN

Frank Vandenbroucke

University of Amsterdam

Date Written: 2020

Abstract

Based on a conjoint survey experiment we explore the support among European citizens for a European Union (EU) budgetary assistance instrument to combat adverse temporary or permanent economic shocks hitting Member States. Suitably designed, there is quite substantial support for such an EU instrument generally and across the sample countries. Support is broader when budgetary support is conditional on debt reduction in normal times and spent in specific policy areas, in particular healthcare and education. Support also increases when there is a role for the European Commission in terms of monitoring and providing guidance. However, there is little support for policy packages that terminate a program and impose a fine in the case of non-compliance. Further, there is broad acceptance of long-run redistribution towards poorer countries. Financing the assistance through a progressive tax increase is more popular than through a flat tax increase. In general, there is substantial scope for constructing assistance packages that command a majority support in all sample countries. The survey was fielded in the midst of the COVID-19 crisis, in which the prospect of a severe economic shock became realistic. However, the results of our survey are based on respondent views in a (partially) pre-political environment: respondents had the opportunity to reason and form their own opinion about the assistance package before concrete policy proposals were debated by political parties that seek the edges of polarization.

Keywords: EU fiscal capacity, conjoint experiment, EU support instruments, temporary or permanent shocks, stabilization, conditionally, taxation, redistribution

JEL Classification: E630, H230, H500, H600

Suggested Citation

Beetsma, Roel and Burgoon, Brian and Nicoli, Francesco and Ruijter, Anniek de and Vandenbroucke, Frank, What Kind of EU Fiscal Capacity? Evidence from a Randomized Survey Experiment in Five European Countries in Times of Corona (2020). CESifo Working Paper No. 8470, Available at SSRN: https://ssrn.com/abstract=3671256 or http://dx.doi.org/10.2139/ssrn.3671256

Roel Beetsma (Contact Author)

affiliation not provided to SSRN

No Address Available

Brian Burgoon

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

Francesco Nicoli

University of Amsterdam - Amsterdam Institute for Social Science Research (AISSR) ( email )

Amsterdam Roeterseilandcampus
Nieuwe Achtergracht 166
Amsterdam, 1018 WV
Netherlands

Anniek de Ruijter

affiliation not provided to SSRN

No Address Available

Frank Vandenbroucke

University of Amsterdam ( email )

Spui 21
Amsterdam, 1012 WX
Netherlands
+31 (0)20 525 6037 (Phone)

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