Journal of common market studies vol:42 issue:5 pages:919-955
The open method of co-ordination (OMC) intends to enhance EU Member States' performance on social inclusion. In this context a set of commonly agreed performance indicators plays an important role. While the communicative power of a synthetic indicator has been recognized, several objections have been raised against such a construction. In this article, we argue that a set of separate indicators can in principle be combined into a meaningful synthetic performance index without giving up on the notion of subsidiarity, and without fundamentally impairing the peer pressure incentives that constitute an important rationale for OMC. We complement the presentation of the conceptual framework with a number of empirical applications, thereby indicating how the basic method may be instrumental for policy benchmarking practice.