The consequences of regional political and economic integration for inequality and the welfare state in Western Europe

Around the world, national societies are binding themselves together and building regional economies and political organizations. This regional integration provides an unusual opportunity to theorize changes in the scale of social action and to understand the development of new social forms. This dissertation advances a sociology of regional integration by examining the consequences of regional integration for national markets and polities. Specifically, it addresses the effects of regional integration in Western Europe on (1) income inequality within and between societies and (2) national welfare effort and differences among welfare states. These effects are assessed by incorporating novel quantitative measures of regional integration into models of standard measures of economic inequality and the welfare state. Data are drawn from 17 Western European countries (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom) over the 1950--2000 period. Several statistical techniques are employed, including time series analysis (cointegrating regression and OLS with auto correlation-consistent standard errors) and panel analysis (random-effects models, fixed-effects models, and OLS with panel-correct standard errors). These analyses show that regional integration is associated with economic convergence, increased income inequality within national societies, welfare-state isomorphism, and welfare-state retrenchment. By synthesizing insights from sociological approaches to inequality and the welfare state, this dissertation explains the economic convergence effect as a result of the diffusion of common policies concerning economic development and the diffusion of common rules to guide market behavior. It explains the effect of regional integration on national income inequality by highlighting the consequences of economic integration for labor, and of political integration for the welfare state. Finally, it explains the impact of regional integration on welfare-state isomorphism and welfare-state retrenchment in terms of the diffusion of classical liberal policy scripts and their effects on the welfare state. The key contributions of this dissertation include the development of a general theoretical approach to regional integration that can be extended beyond the EU, and the establishment of basic empirical findings on the broad consequences of regional integration for income inequality and the welfare state.