In this qualitative sociological and quantitative economic policy paper, we start out from the assumption of a very recent European Commission Background paper on the "Efficiency and effectiveness of social spending", which says the effectiveness of social spending can be defined by the degree...

We use a two-country model with a central bank maximizing union-wide welfareand two fiscal authorities minimizing comparable, but slightly differentcountry-wide losses. We analyze the rivalry between the three authorities inseven static games. Comparing a homogeneous with a heterogeneous...