Today’s developed societies face a set of challenges that defy adequate response within the inherited policy structure. Citizens are trapped in conditional welfare systems that fail to secure their livelihoods and deny their contributions. Governments are gridlocked between weak infrastructure and overloaded fiscal inheritances. Dependent on individual consumption to compensate for collective insecurity, stewardship of community and environment have been displaced. This leaves everyone feeling powerless. Citizens demand change that governments cannot deliver, resulting in ever greater frustrations with democracy.
This state of affairs is neither inevitable nor intractable. Strategic policy design and sequencing, that combines welfare reforms with tax reforms, opens policy options that would otherwise be blocked by politically painful effects on households.