The Economics of the Third Way

The Economics of the Third Way

Experiences from Around the World

Edited by Philip Arestis and Malcolm Sawyer

The ‘third way’ is a term often used by politicians and others to indicate a set of new policies adopted by former social democratic parties throughout the world. This book is an attempt to dissect the ideas and economic theory behind the rhetoric of the ‘third way’ through a critical evaluation of the experiences of ‘third way’ administrations in a diverse range of countries.

Chapter 10: The economic policy of the Spanish Socialist governements: 1982-96

Jesus Ferreiro and Felipe Serrano

Subjects: economics and finance, post-keynesian economics, public sector economics

Extract

CHAPTER 10 13/7/01 3:54 pm Page 1 10. The economic policy of the Spanish Socialist governments: 1982-96 Jesus Ferreiro and Felipe Serrano 10.1 INTRODUCTION The government of the Socialist Party (Partido Socialista Obrero Español, PSOE) started in November 1982 and ended in March 1996, when the Partido Popular, a right-wing Christian Democratic party, won the elections. During these fourteen years, the economic policy of the Socialist governments focused on two objectives. From a macroeconomic point of view the entire strategy was based on the control of inflation rates. The problem of unemployment was subordinated to this main objective, a strategy that was coincident with the dominant strategies implemented in the rest of the Western economies. From a long-term perspective, the general orientation of its economic policy responded to a twofold objective. The first one was related to the idea of modernisation, that is, of social and economic adaptation to the new changes that arose as a result of the structural crisis that Western countries had been suffering since the late 1960s. The second one, deeply rooted in the classic European social democratic tradition, was the construction and consolidation of the Welfare State. Throughout the Socialist governments, these objectives went through several phases depending on the constituency’s support or rejection, the changes in the international economic situation, and the contradictions existing among such objectives. Our purpose is not to make a deep analysis of those phases or to make a personal and subjective interpretation of the general outcomes of...

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