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Reforming the Welfare State – Balancing Efficiency and Equity

General Information

Kiel Institute Summer School on Economic Policy


July 1st – 8th, 2007

Pictures of the Summer School

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1. Motivation

Globalization is a prime source of economic and social change throughout the world. The dynamics of increasingly global markets and geographic competition are profoundly changing the international division of labor. At the same time, many societies have to cope with dramatic demographic changes that are increasingly endangering national welfare systems. In the developed world, these challenges are often perceived more as a threat, nurturing defensive and protectionist attitudes, than as an opportunity to induce effective changes. Well-functioning welfare systems are indispensable to effectively cope with these challenges and to mitigate the pressures that arise: “safety net policies should be in place so as to assure voters that the gains and pains of any new opportunity will be shared. This is essential to maintaining a political consensus in favor of change in general and globalization in particular. Political support for change is essential since growth requires change” (Richard Baldwin). In short, we need functioning welfare systems to reap the full benefits of globalization.

The market economy needs safeguards against the largest risks that the competitive process presents to individuals. Without such safeguards, it is highly unlikely that market processes will gain democratic acceptance and work efficiently. Social safeguards and measures for social equalization are not fundamentally extraneous appendages to the market economy. They are instead essential, constituent elements, contributing to the realization of the market system's potential. The function of welfare systems thus resembles, to use Schumpeter's metaphor, the brakes on an automobile: their purpose is certainly not to make the vehicle slower, but rather quite the opposite — to permit travel at a higher speed.

2. The Economic Policy Summer School

The Kiel Institute’s first summer school on “Reforming the Welfare State ─ Balancing Efficiency and Equity” is organized in cooperation with the I.S.E.O. Institute; founded by Franco Modigliani1. The summer school will take place at the Kiel Institute from Sunday 1st to Sunday 08th of July.

The Kiel Institute feels particularly honored that Nobel Laureate Prof. Robert M. Solow will inaugurate the Kiel Summer School.

The aim of the first Kiel Institute Summer School is to permit top-flight graduate students, as well as young policy makers with a graduate degree background the opportunity to gain state-of-the-art insights on how to reform welfare systems, in order to meet the challenges in a globalizing economy and aging society.

In 7 days, 25 carefully selected graduate students will study the challenges of globalization and international locational competition for the welfare state and employment. And they will analyze the appropriate policy measures to balance efficiency and equity in reforming the welfare state.

The courses combine a thorough theoretical and methodical underpinning with a clear policy orientation on “how to put theory into practice”. Students are expected to participate actively in lively debates in a friendly and open atmosphere on the topics discussed during the lessons. During their staying in Kiel, students will be hosted in the guest house of the Institute.

1The I.S.E.O. Summer School 2007 takes place from June 23rd – June 30th. For details see

3. The Speakers

Nobel Laureate Prof. Robert M. Solow, Ph.D., MIT

Prof. Dennis J. Snower, Ph.D., President, Kiel Institute

Prof. Arye L. Hillman, Ph.D., Bar-Ilan University, Israel

Prof. Ruud de Mooij, Ph.D., Erasmus University Rotterdam

Prof. Dr. Karl-Heinz Paqué, Otto-von-Guericke University Magdeburg

Martin Weale, Sc.D., Director, National Institute of Economic and Social Research, London

Prof. Dr. Rick van der Ploeg, European University Institute, San Domenico di Fiesole

4. Fees

The fee to attend the course amounts to 1.500 €. However, we are awarding scholarships amounting to 800 €, so that enrolled students need only pay the remaining 700 €. The fee covers full board at the guest house of the Kiel Institute, visits to relevant institutions, local transportation, as well as the courses themselves with the accompanying material. Attendees need only to arrange and pay for own flights to the Hamburg or Luebeck airports. The Luebeck airport is served by Ryanair, Hamburg is served by Hapag-Lloyd and major carriers. Public transportation is available from both airports to the center of Kiel.

More information concerning the program, the syllabus and the reading list will be published soon on the website of the Kiel Institute.

In order to apply, students should download the attached application form, fill it out and send it by the 30th of April 2007 to the Institute in care of together with their curriculum vitae.


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