INTERNATIONAL POLICY ANALYSIS The Corridor Model – Relaunched Short Version KLAUS BUSCH July 2011 „ „ The basic idea underlying the corridor model, developed in the 1990s, is the mainte­nance of a close connection between levels of economic and welfare state develop­ment in the EU member states. During periods of crisis in which drastic cuts are made in social security systems European regulation of this kind is crucial. This concept can also be used to prevent social dumping between member states and to facilitate wel­fare state catch-up processes on the part of less developed member states. „ „ The corridor model was originally developed with reference to the»social expendi­ture ratio« indicator. It can be presented more easily on the basis of the»social protection expenditure per capita in purchasing power standards(PPS)« indicator, however, which is related extremely closely to»per capita income in PPS«. Instead of several corridors for different country income groups only one corridor is needed for all states. „ „ There is a close connection between the quantity of financial expenditure and the quality of provision with regard to the various functions of the welfare state. This can also be demonstrated empirically for the health care sector. As a result, the quan­titative approach of the corridor model does not conflict with qualitative claims on the welfare state. „ „ The criticism that the corridor model cannot be reconciled with a progressive welfare state philosophy is a misunderstanding. The model neither prescribes nor sanctions upper limits for the welfare state.