The Open Method of Coordination (OMC) as an Evolutionary Learning Process

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 fields, 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 {\em intermediate} values of the policy instrument.

• Item Type: Paper (Discussion Paper)
• Keywords: Open Method of Coordination, Finite-population Evolutionarily Stable Strategy, Imitation, Mobility, Redistribution.
• Subjects: Economics; Economics > Discussion Papers in Economics; Economics > Discussion Papers in Economics > Public Finance; Economics > Discussion Papers in Economics > Game Theory
• Dewey Classification: 300 Social sciences; 300 Social sciences > 330 Wirtschaft
• Journal of Economic Literature classification: H77, H75, C73
• Language: English