Silent Elements of Policy Change: Inflation and Uprating Mechanisms in the Low Countries

Abstract

Policy responses to the inflation crisis in Belgium and the Netherlands show great similarities but also significant differences. In both countries responses were quick and substantial. Measures covered prices more than household incomes while universal, not earmarked measures exceeded selective interventions. However, there were also major differences between the two countries. Because Belgium, unlike the Netherlands, could fall back on the mechanism of automatic indexation of wages and social benefits; it relied more on existing universal policy instruments while in the Netherlands more targeted ad hoc measures were taken which also allowed for innovation in policy making. These different policy paths have their origins in the 1980s when policy models began to diverge and different legacies emerged.