The European Social Welfare Function Shaped on a Difference Principle: A Normative Rawlsian Approach in Favour of Fiscal Union

Klaudijo Klaser

No 7186, CESifo Working Paper Series from CESifo

Abstract: Why might the European member states seek for Fiscal Union? Coordination, macro-stability purposes and provision of (European) public goods are certainly goals of paramount importance for the implementation of Fiscal Union at European level. However, there is an equally important component of moral-normative nature embodied in the constitution of any fiscal system: reallocation of resources. The core of the paper is the idea that Rawls’ social contract theory can provide some insights about the implementation of European Fiscal Union in the re-allocative perspective. The reasoning put forward in the paper shows how the current European framework can be essentially considered an appropriate object of Rawls’ theory of domestic justice since the European Union holds those two descriptive elements which are sufficient and necessary to raise redistributive issues, to apply Rawls’ pure procedural justice and then to derive a difference principle at European level: a) the mutually advantageous cooperation among its members and b) a set of formal institutions which constitute a basic structure. The European difference principle prescribes to redistribute resources in order to maximize the expectations of the most disadvantaged European citizen(s). A corollary of this conclusion is that the actual redistribution according to similar scheme is achievable by means of Fiscal Union at European level.

Keywords: difference principle; European integration; European Union; Fiscal Union; John Rawls (search for similar items in EconPapers)
JEL-codes: D30 E62 F55 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-eec and nep-mac
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