and general government contributions have increased in proportion. There is also a tendency for the
shares to converge across countries as indicated by the coefficients of variation^64.
Figure 13 - Social production receipts by type (as % of total receipts) in EU-150%10%20%30%40%50%60%70%1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 20040%5%10%15%20%25%30%35%40%45%50%Social contributions
General Government contributions
Other receipts
coefficient variation (social contributions) - right-hand scale
Coefficient variation (General government contributions) - right-hand scale
Source: Eurostat and own calculations.Finally, a last question is whether globalisation, possibly increasing tax competition, has put constraints
on the financing and the delivery of the European Social Model(s). The question is difficult to answer.
We have seen that one consequence would be the shift from mobile to immobile tax bases and table (5)
seems to suggest that the social models that have fared the best are actually those that have been able to
do this shift. This does not however mean that this is the result of globalisation and tax competition. In
terms of revenues, we have seen above that the collection of corporate taxes has not suffered from
declining statutory corporate tax rates and that many effects were at play. More in-depth studies^65 show
that notwithstanding increasing integration and globalisation, there is still room for independent
economic policies and that the views that globalisation has altered the composition of government
expenditures and reduced its financing are not fully supported by empirical analysis. Several
explanations have been put forward. First, the share of mobile activities in total taxes is still relatively
small. Second, globalisation may equally increase profitability and hence tax revenues, for any given tax
rate. Finally, on the expenditure side, globalisation may increase the need for more social spending.
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Carone, G. and Salomaki, A. (2001). Reforms in tax-benefit systems in order to increase employment
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(^64) Data for the EU-25 is only available from 2000 and show similar characteristics.
(^65) Hines (2006), Dreher (2006), and Dreher, Sturm and Ursprung (2006).