The Open Method of Coordination (OMC)

Ana Ania and Andreas Wagener

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: We interpret the Open Method of Coordination (OMC), recently adopted by the EU as a mode of governance in the area of social policy and other ¯elds, as an imitative learning dynamics of the type considered in evolutionary game theory. The best-practise feature and the iterative design of the OMC correspond to the behavioral rule "imitate the best." In a redistribution game with utilitarian governments and mobile welfare beneficiaries, we compare the outcomes of imitative behavior (long-run evolutionary equilibrium), decentralized best-response behavior (Nash equilibrium), and coordinated policies. The main result is that the OMC allows policy coordination on a strict subset of the set of Nash equilibria, favoring in particular coordination on intermediate values of the policy instrument.

JEL-codes: C73 H75 H77 (search for similar items in EconPapers)
Date: 2009-03
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