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

55 Pages Posted: 28 Jul 2020 Last revised: 16 Aug 2020

See all articles by Roel M. W. J. Beetsma

Roel M. W. J. Beetsma

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); European Commission; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Tinbergen Institute; Netspar

Brian Burgoon

University of Amsterdam

A. de Ruijter

University of Amsterdam - Law Centre for Health and Life

Francesco Nicoli

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

Frank Vandenbroucke

University of Amsterdam

Multiple version iconThere are 3 versions of this paper

Date Written: July 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: Conditionality, conjoint experiment, EU fiscal capacity, EU support instruments, redistribution, Stabilization, taxation, temporary or permanent shocks

JEL Classification: E63, H23, H5, H6

Suggested Citation

Beetsma, Roel M. W. J. and Burgoon, Brian and de Ruijter, Anniek and Nicoli, Francesco and Vandenbroucke, Frank, What Kind of EU Fiscal Capacity? Evidence from a Randomized Survey Experiment in Five European Countries in Times of Corona (July 2020). CEPR Discussion Paper No. DP15094, Available at SSRN: https://ssrn.com/abstract=3661438

Roel M. W. J. Beetsma (Contact Author)

University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )

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Brian Burgoon

University of Amsterdam ( email )

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Anniek De Ruijter

University of Amsterdam - Law Centre for Health and Life ( email )

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Francesco Nicoli

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

Amsterdam Roeterseilandcampus
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Amsterdam, 1018 WV
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Frank Vandenbroucke

University of Amsterdam ( email )

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+31 (0)20 525 6037 (Phone)

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