CPE 2 - Welfare State

Welfare State as Redistributive

*side note, if defined as this all redistribution stuff is relevant* All taxation and spending is redistributive. Social programmes can be more or less progressive in how benefits are provided and financed. Cash welfare is highly redistributive. Empirics. Post-tax and transfer mini is more variable across countries than market mini. Korpi and Palme 1998: - Taking from everyone and giving back to everyone is more redistributive than taking from just rich and giving to just poor.

FEATURES OF WELFARE STATES LIBERAL WELFARE STATES - RESIDUAL

- Acces to benefits and services, means tested - Most welfare state prison is form the market - Welfare state is very minimal - US and Canada

FEATURES OF WELFARE STATES CONTINENTAL/CORPORATIST/CONSERVATIVE

- Stays out of family life -Happy to involve itself in place of market - Contribution based system. Benefits based on occupation - Less about redistribution. More about balancing life-cycle consumption -Germany, Austria, Netharlands

FEATURES OF WELFARE STATES SOCIAL DEMOCRATIC WELFARE STATES

- Universalistic benefits in healthcare, childcare and education - High levels of taxation levied on most earners - Costs of social risks relatively evenly distributed across moiety but there is also even protection of everyone with generous benefits available to even relatively high-earners - Given at a high standard to help entire middle classes

Swenson 2004 'Varieties of Capitalist Interests: Power, Institutions, and the Regulatory Welfare State in the United States and Sweden'

A PUZZLE - Current wisdom about the American welfare state's laggard status among advanced industrial societies, by attributing it to the weakness of the Left and organized labor, poses a historical puzzle. - In the 1930s, the United States experienced a dramatically progressive turn in social policy-making. New Deal Democrats, dependent on financing from capitalists, passed landmark social insurance reforms without backing from a well-organized and electorally successful labor movement like those in Europe, especially Scandinavia - Sweden, by contrast, with the world's strongest Social Democratic labor movement, did not pass important social insurance legislation until the following two decades. THIS ARTICLE - A central purpose of this article is to cast doubt on the equivalency premise and therefore the importance of variable "class power" in comparative and temporal explanation of welfare state development. It indicates, first, that capitalists' interests vary at least as much if not more than their power. - In short, I argue, institutionalized and therefore varied capitalist interests explain a good deal of variation in welfare state development across countries, and over time, in a way that has never been fully recognised. Thus a changing alignment of interests across class lines, not a shifting balance of class power favouring labour at capital's expense, might be the most significant source of progressive and enduring change.

Margarita Estévez-Abe, Torben Iversen and David Soskice (2001) 'Social Protection and the Formation of Skills: A Reinterpretation of the Welfare State',

ARGUMENT - It is argued that important dimensions of the welfare state—employment protection, unemployment protection, and wage protection—are designed to make workers more willing to invest in firm‐ and industry‐specific skills that increase their dependence on particular employers and their vulnerability to market fluctuations. - Workers will only make such risky investments when they have some insurance that their job or income is secure; otherwise, they will invest in general, and therefore portable, skills. - In turn, because the skill composition of the work force constrains the set of product‐market strategies that firms can pursue successfully, employers will support social protection that facilitates the set of skills that they need to be competitive in particular international product markets. - We contend that the welfare state can also be understood as a complement in national production systems. Our chapter thus is part of the new efforts to understand the link between models of capitalism and welfare states - Employment protection increases the propensity of workers to invest in firm-specific skills, whereas unemployment protection facilitates investment in industry-specific skills. The absence of both gives people strong incentives to invest in general skills - THESE PREDICTIONS ARE BORNE OUT BY THE COMPARATIVE DATA, WHICH SHOW THAT MOST COUNTRIES COMBINE EITHER LOW PROTECTION WITH GENERAL SKILLS, OR HIGH PROTECTION WITH SPECIFIC SKILLS. WELFARE PRODUCTION REGIMES - The set of product market strategies, employee skill trajectories, and social, economic, and political institutions that support them FACTORS THAT CONTRIBUTE TO THE DISTINCTIVENESS AND RESILIENCE OF PARTICULAR WELFARE PRODUCTION REGIMES 1) such regimes tend to be reinforced by institutions—collective wage‐bargaining systems, business organizations, employee representation, and financial systems—that facilitate the credible commitment of actors to particular strategies, such as wage restraint and long‐term employment, that are necessary to sustain cooperation in the provision of specific skills 2) Those workers and employers who are being most advantaged by these institutional complementaries also tend to be in strong political positions, in terms of both economic clout and sheer numbers. ISSUES AND CAVEATS - That said, it should be emphasized here that our model is not intended to explain the origin of specific social policies. Although our model helps understand intra‐class differences in policy preferences, we do not claim to make a historical argument about origins. CRUCIAL DISTINCTION BETWEEN THIS THESIS AND A DECOMMODICIATION THESIS - Protection of employment and income is widely seen in the welfare state literature as reducing workers' dependence on the market and employers. We have argued that employment and income protection can be seen as efforts to increase workers' dependence on particular employers, as well as their exposure to labor market risks.

KORPI AND PALME (2003)

ARGUMENT: - We argue that retrenchment can fruitfully be analyzed as distributive conflict involving a remaking of the early postwar social contract based on the full employment welfare state, a conflict in which partisan politics and welfare-state institutions are likely to matter. - Because of a nontheoretical conceptualization of the dependent variable—the welfare state—and the use of social expenditures as its main operationalization, earlier analyses of retrenchment have reached premature conclusions on the extent of welfare-state regress and on the role of class-related politics in this context. - Our empirical analysis of retrenchment brings in a new type of dependent variables, that is, indicators quantifying key aspects of social citizenship rights. ARGUMENT STRUCTURE - The theoretical background to our hypothesis of the continued relevance of socioeconomic class in policymaking hinges on two considerations. 1) Concerns differences in the nature of the assets or power resources that actors control in labour markets and employment relations 2) Concerned with asymmetric effects of political democracy on the logic of the situation in markets and in politics of different socioeconomic classes. SPECIFIC COUNTRY DEVELOPMENTS (looking at development of average net replacement rates in sickness, work accident, and unemployment insurance during the period 1930-95 - From starting levels in 1930 of about 35% for unemployment, 40% for sickness, and close to 60% for accident insurance, the long-term increase in benefit levels peaked in the 1975-85 period, at about 65% for unemployment, 70% for sickness and 85% for accident insurance. Thereafter the increase turned into a decrease, and up to 1995, replacement levels fell by close to 10 percentage points for unemployment and about 5 percentage points for sickness and accident insurance. - The British welfare state has been rolled back to a pre-Beveridge level, at or below that of the 1930s. - On average the largest cuts appear in countries dominated by basic security institutions. Here the United Kingdom is in the lead, followed by a second group consisting of Ireland, New Zealand, and Denmark. - Also, The Netherlands has sizable cuts in all three programs, while Canada has cuts of similar size in sickness and unemployment insurance. In the United States, Unemployment insurance saw a major cut as the result of a federal decision to make benefits taxable. - In targeted Australia replacement rates have substantially declined in the two programs included here, that is, sickness and unemployment insurance. - The state corporatist countries have a quite distinct pattern. Here Austria, France, Germany, and Italy show no or only a moderate decline in sickness and work accident insurance, while unemployment benefits have been cut. - Among countries with encompassing institutions, relatively large reductions have been made in Sweden and Finland, while Norway has lowered only unemployment benefits. Declines in Sweden are of about the same order as those in The Netherlands. DATA - Our empirical data make possible an analysis of retrenchment based on the development of core aspects of social citizenship rights, that is, legislated benefits in three short-term social insurance programs EMPIRICS - The data indicate that the risk for major cuts has clearly been lowest with left cabinet representation and highest when secular center-right parties have been in government, with confessional parites somewhere in the middle. - Contrary to expectations, among all 18 countries the highest risk for cuts appears at low initial levels. Thus the 'growth to limit's hypothesis is not supported - Among economic factors, general government fiscal balances and levels of unemployment appear to be of some relevance, but not to the extent that they overshadow the role of partisan politics.

Businesses and the Development of the Welfare State

Bear in mind that employers are not monolithic actors, either in coordinated or liberal market economies OVERALL - SWENSON - Point to features that served the interests of capital via reducing risk. Not politics against markets but politics supporting markets. - Social programmes can be hedges against individual and firm risk which facilitate market exchange. Facilitate coordination between sheltered and exposed sectors - Swenson. MARES (1998) - Social policies indirectly support the investments in skills made by employers by aiding them during times of sickness, unemployment or disability and by allowing them to reject jobs that do not correspond to their skill qualification. - Large firms player a crucial role in the development of German welfare states. - By 1881, German employers had submitted a proposal (the Baare bill of disability insurance) to the Recichstag suggesting that disability benefits should be paid to those involved in workplace accidents, and should be financed half by the contributions of employers, a quarter by the employees and a quarter by the local community. MARES (2003) - Companies and industries that are highly exposed to risk will favor a social insurance system where cost and risk are shared, leading employers to push universalistic unemployment and accident insurance. - Seeks to identify the factors that affect creation in the social policy preferences of firms and also specify the conditions under which cross-class alliances form - Thus both employers and employees who have made irreversible investments in skills will favor contributory insurance policies. - Other variables matter too like distribution of labour market risks across occupations. Since social policies mandating contributions that are not tied to the incidence of risk redistribute across risk categories, we expect high- and low-risk industries to have divergent policy preferences. EMPIRICS - If welfare state is built on shoulders of employers, we should expect investment and economic performance to suffer! But there is no observed relationship between government spending, investment and national income across advanced democracies (Lindert 1996) ISSUES - Businesses often lobbied against social programs - Do 'risk groups' act as political actors?

Early adoption of welfare states

Between the 1880s and 1920s, social insurance and pension programs were launched in Europe, the Americas, and Australiasia to buffer workers in market economies against income losses due to disability, old age, ill health, unemployment, or los of a family breadwinner • After their inception, such programs spread to many additional countries and expanded in benefits and in covereage of the population

OPENNESS AND TRADE

CAMERON 1978 - Open economy concentrates industry on comparative advtange. This leads to bigger unions and more left wing parties. RODRIK - By increasing the size of the public sector, the government can dampen the effect of the open economy on employment, consumption and production. - - Globalisation, by increasing the mobility of capital and labour across national borders, extricates the labour supply from the national control and enables the financial sector to refuse doing services as a national utility. - Government spend- ing plays a risk-reducing role in economies exposed to a significant amount of external risk. - Societies seem to demand (and receive) an expanded government role as the price for accepting larger doses of external risk. In other words, government spending appears to provide social insurance in economies subject to external shocks. - Empirics: - The central evidence in favor of this explanation comes from regres- sions in which openness is interacted with two measures of external risk, volatility of the terms of trade and the product concentration of exports. In each case, the interaction term is strongly significant (and the fit of the regression improves), whereas the coefficient on openness per se becomes insignificant or negative. - Note, however, that this coefficient becomes smaller as one moves from the high-income to the broader sample of countries, and the precision with which it is estimated becomes lower. This is also plausible since it reflects both the greater difficulty of adminis- tering income transfer programs in low-income countries and the greater measurement error. - Note Mares (2004) points out that if sectors facing low volatility in income are politically pivotal, then an increase in openness will not be associated with an expansion of social protection EMPIRICS - Open economies were far more likely to experience increases in public spending in the post-war period. WHO? finds that the openness of the economies studied in the early 1960s is a powerful predictor of the expansion of government consumption over the subsequent three decades. Effect is stronger for lower-income countries, whereas exposure to external risk (an operationalization of 'openness') results in higher social security and welfare spending in higher-income countries but not overall government consumption. - Castles 1978 finds that the historical effects of trade patterns are more important than economic openness after WWII though - Lindert 2004: Openness by itself by itself had a negative effect on social spending a la 'race to the bottom' but it had a strongly positive effect when interacted with terms of trade movements. This Supports Roderick

Wagner Law and Income Growth

Certain level of economic development needed as a prerequisite IDEA - The demands of citizens for services and their willingness to pay taxes is income-elastic, thus as economic affluence increases, so do these demands and this willingness. One would expect the public sector to expand in accordance with greater increments of economic affluence. EMPIRICS 1) Positive - this argument fared well in national studies based on data for the 1940s, 1950s and 1960s, and especially so when the sample included large numbers of countries of varying levels of economic development (Skocpol and Amenta 1986). 2) Negative - Bird (1971), Musgrave (1969) and Gupta (1968) all failed to find any positive cross-national relationship between economic growth and government share in economic product if the cross-section is confined to developed countries. - Cameron 1978 - Contrary to Wagner's "law," the rate of growth in the economic affluence of a nation does not contribute to the expansion of the public economy. Apparently citizens' demands for services and their willingness to accept higher levels of taxes, or both, are not income- elastic. SYNTHETHISED CONCLUSION - These considerations point to a synthesized conclusion; economic growth is an important determinant of public sector growth, but only for those less advanced nations. (Cameron 1978) - Industrialization and economic structure are seen as crucial preconditions for the development of the welfare state (Uusitalo) Note from Uusitalo - By including countries from the whole range of developmental sequence, from least developed to most advanced, you maximize the variance of economic level and thereby create statistical conditions for its explanatory power.

Culturalist Explanations

Culturalist explanations have drawn attention to cognitive biases of policymakers in accounting for changes in policy (weyland 2007) or stressed the importance of societal norms and values such as altruism in condition public support for redistribution

FISCAL EXPLANATION

Downs 1960. The size of the public sector depends on the amount of revenue it can raise, and this in turn depends on the government's ability to hide the revenue raising mechanisms from the public. Empirics. Cameron (1978) finds no evidence in support of this 'fiscal illusion' or 'invisible taxes' thesis, at least in the post-war period.

Offer (2003) Why has the Public Sector Grown so Large in Market Societies? The Political Economy of Prudence in the UK, c. 1870 - 2000

For the century after 1980, Wagner's law has been a truism, for Britain and other advanced countries. The growth of the public sector responded to electoral preferences and economic opportunities more than to ideology. An affluent society requires prudential goods. In the 1980s, Britain took a prudential holiday The role of the collective provision, we have argued, is to overcome myopic biases, and facilitate long-term commitment

Functional-Structural Explanations of the Welfare State

GENERAL - Social programmes as response to urbanisation, industrialisation and democratisation. - Social programmes fill a 'need' created by developing democratic capitalism. - Share assumption that political processes are strictly determined by structural constrains: politics hardly matters INDUSTRIALISTION - Industrialisation causes new needs and pressures that follow from urbanization and unemployment (Wilensky and Lebaux 1965) - Capitalism creates economic surpluses and social atomisation and destroys traditional institutions (Wilensky, Flora and Abler 1981) - Decline in proportion of work force in agriculture increase need for social security (Pryor) - Cutright argues that the per- centage of the work force in industry is an indicator of the vulnerability of the population to drastic changes in income arising from unemployment. MARXIST VIEW - Marxists see the state as riot insurance - the 'peace formula' in democratic capitalism (Offe, Gough, O'Conner). Counter: Find welfare states in Eastern Europe but not capitalist! - The welfare state is functional not from the viewpoint of the whole society, but from that of the common interests of capital. In the competition between individual capital sthe state promotes the interests of capital as a whole and takes some responsibility forhte reproduction of the labour force DURKHEIMIAN APPROACH - Industrialisation is part of a larger process of modernization, wekanes social integration and increases anomie. The self-help potential of primary and scoendary groups also withers away with industrialization, and the state becomes the only potential source of effective assistance - Public authorities take over many of the functions formerly performed by smaller units - Flora and Heidenheimer 1981 and Alber 1982 POST WAR LABOUR FORCE - Postwar spending determined by size of labour force in industry and social spending (Stephens 1979, Korpie 1978 and 1983) - In contrast to workers in precarious conditions of self-employment, industrial workers have a higher ability to finance larger programs. Economies with higher levels of manufacturing employment have higher fiscal capabilities to finance larger welfare stats, rather than higher levels od demand for social spending PROBLEMS WITH INDUSTRIALISM THESIS - Why does social policy only emerge 50 and sometimes 100 years after traditional community is effectively destroyed? - Collier and Messick 1975. The percentage of the workforce in agriculture in the UK was just 9% at the time of the primary adoption of social security measures, whereas it was 91% for Saudi Arabia. The percentage of the workforce in industry at the time of adoption ranges from 3% in El Savlvador to 54% for Switzerland ( they suggest that the industrialisation argument as a necessary prerequisite but not a sufficient explanation is more powerful but still not great ). - Collier and Messick find that neither levels nor significant thresholds of industrialization explain the timing of social insurance program adoptions in 59 nations between the 1880s and the 1960s - Countries remain at very different levels and compositions of spending. NUANCE TO THE INDUSTRIALISM THESIS - Attempting to put this argument on the strongest logical and empirical ground, some proponents have argued that convergence of social policies in industrializing nations mayn occur only up to a point, beyond which sociocultural variations persist among very rich countries DEMOCRATISATION 1) Majorities favour redistribution. 2) Democracy nurtures intense party competition around the median voter which will fuel rising public expenditure. - Lindert 2004. Little social spending pre 20th century mainly because political voice restricted to property owning men. Vote extension → Llowd George's assault on the rich... EMPIRICS ON DEMOCRATISATION - Empirical success. Schneider 1982. The number of votes cast in national elections on a per capita measure is strongly associated with earlier adoptions of social welfare programs in 18 Western nations between 1919 and 1925. - Lindert 2004 on post war spending. OECD countries studied offered little variation in voting rights. But he finds that rate of voter turnout does explain post-war spending to some extent. Differences in countries' voting shares in postwar period reflect differences in people's willingness to use the votes they are allowaed and not differences in the right to vote. PROBLEMS WITH DEMOCRACY APPROACH - First major welfare-state initiatives occurred prior to democracy and were powerfully motivated by the desire to arrest its realisation. Napoleon III, Germany under Bismarck, Austria under Von Taffe. Conversely, welfare-state development was most retarded where democracy arrived early, such as in the US, Australia and Switzerland. - How to explain growth of public sector after WWII? Eg; the franchise in the UK was extended to its present scope in 1928, and thus increasing democratisation cannot explain the boom in public sector growth between 1945 and the 1970s. COUNTER: vote share...

RECENT PUBLIC SECTOR GROWTH EMPIRICS

Growing in advanced and developing economies until 1970s since 19th century. By April 2014, general government total expenditure and general government revenue in the Euro Area accounted for 49.4% and 46.7% of GDP respectively (OECD 2014). Late 1970s to the mid 1990s saw a retrenchment of the public sector in many Anglo-Saxon economies. Moreover, while, in 1975, the public economy accounted for 53.5% of GDP in the Netherlands, the analogous figure in Japan was only 23.5% (Skocpol and Amenta 1986).

Ellen Immergut 1992 Health politics: interests and institutions in Western Europe. Cambridge University Press

I LIKE THIS ARGUMENT IT FITS V WELL WITH MINE. Links likely to the institutional function fox that conditions outcomes POLITICAL INSTITUTIONS DO NOT NEUTRALLY TRANSMIT DEMANDS OR MERELY RATIFY AGREEMENTS PREVIOUSLY WORKED OUT THROUGH PARLIAMENTARY INTEREST GROUP BARGAINS. SPECIFIC INSTITUTIONAL CONFIGURATIONS ESTABLISH STRATEGY CONTEXTS FOR POLITICAL CONTESTS THAT DETERMINE THOSE INTERESTS THAT CAN BE EFFECTIVELY EXPRESSED AND WHICH ONES WILL PREVAIL. IN THIS WAY, POLITICAL INSTITUTIONS HELP TO SHAPE THE DEFINTION OF INTERESTS AND THEIR EXPRESSION IN POLITICS Overall - The book argues that in order to understand the politics of national health insurance we must look beyond the clash of ideologies and the clash of interest groups to the political context in which these interests are defined - By stressing the procedural framework for policy decisions, it confronts the problem that no single explanation has yet emerged for the development of national health insurance policies - or for the welfare state. - The social forces that create pressures for political action are not a sufficient explanation for the emergence of national health insurance. THE RULES OF THE GAME - Different nations have developed different institutions, formal and informal, for making political decisions - The formal institutions of government as defined by constitutions are critical to these descions. But equally important to public policy are the informal practices that have developed around these institituions as interest groups, political parties, individual polictians and bureaucrats have struggled to bend these instuttions to their wills. - The ability of executive governments to impose programs of reform, as well as the ability of interest groups to resist these reforms or to demand concessions, depends upon institutional and political framework. ARGUMENT - Rather than emphasizing particular actors or parts of political systems, it focuses on the organization of political systems as whole and the overall logic by which they work. By mediating political conflicts in distinctive ways, political institutions bring together different constellations or organized actors and change the ways in which they interact. - The political system taken as a whole, with all its institutional provisions and a particular distribution of partisan representatives - which I call an 'institutional configuration' - comprises an environment of conduct. - Institutional configurations determine the relative power of interest groups in policy process and where they can enter into decision procedures - Institutional configurations give different interests differential chances of attaining favorable policy outcomes. - Interest groups adjust their strategies and reformulate their demands in light of the peculiarities of particular institutional configurations.

BALDWIN AND POLITICS

IDEA - Contests the assumption that parties representing working classes have been the main historical force accounting for the introduction of universalistic policies ALTERNATIVE ACCOUNT - In Baldwin's alternative account, the middle classes are the pivotal group that influences the choice among different groups - Univeralisaic social policies were introduced in Scandinavian countries at the turn of the twentieth century by parties representing smallholders and other indepdentnts. Thus, "the view of an essential link between the apparent solidarity of early Scandivnaican welfare policy and the Social Democrats is misleading. BALDWIN and Welfare State Origins - As Baldwin (1990) observed in a study of the origins of the welfare state in five European countries, 'Protection against risk has been sought more universally than a redistribution of resources.''

Collier and Messick (1975) 'Prerequisites versus Diffusion: Testing Alternative Explanations of Social Security Adoption'

IDEA - Study concerned with explaining the timing of the first adoption of social security among the 59 countries which had formal political autonomy with regard to domestic policy at the time of first adoption TWO KEY EXPLANATIONS 1) The prerequisites explanation, which emphasizes causes of social security development within nations most commonlu the level of social and economic modernisation 2) Diffusion which focuses on the imitation of social secturity programs among nations THE DIFFUSION APPROACH - The diffusion approach views social security adoption as taking place within an international system of communication and influence. - Heirarchical diffusion: innovations appear in the most advanced or largest centres and are then adopted by successively less advanced or smaller units - Spatial diffusion - diffusion along the lines of spatial proximity or, alternatively, along major lines of connunication OVERALL - The present study is based on the belief that it is extremely important to bring these alternative explanations together in comparative political analysis. ***The research demonstrates that there are systematic variations in the sequence of social security adoption in relation to other aspects of modernisation. THE MOST IMPORTANT OVERALL RELATIONSHIP IS THE TENDENCY FOR LATER ADOPTERS TO ADOPT AT FAR LOWER LEVELS OF SOCIAL AND ECONOMIC MODERNISATION*** - An examination of the overall pattern of adoption provided substantial support for the hypothesis that hierarchical diffusion is present, with later adopters tending to adopt at far lower levels of modernization than the early adopters - This rela- tionship was interpreted as being in part an aspect of the tendency toward a larger role of the state in later-developing countries, and in part due to certain characteristics of social security as a policy.

Non-liear View of Welfare States - Clustering

IDEA - expenditures are epiphenomenal to the theoretical structure of the welfare state. This foreceful critique has reoriented theoretical and empirical research on the welfare state from a study of differences in the level of spending to a study of differences in the design of policies. - Note that, as Mares (2009) points out, the salient political decisions that bring about a new program or that sharply transform the scope of its application are never really decisions about aggregate spending levels - More commonly they concern the scope of coverage, the mix of conditions of eligibility for benefits, and the relative mix of private and public institutions. GOSTA ESPING-ANDERSEN - Power of left parties and unions in coalition with other actors explain more redistributive outcomes. PROBLEMS - "Much of the coalitional literature falls into the trap of post hoc description. Description, no matter how accurate, will not produce explanation." - Neither the origins of the three worlds, nor their stability, can be said to be explained since there is no argument to preclude alternative outcomes. - While this account is able to identify distinct constellations of political forces supporting policies that differ in their mode of financing and extent of coverage, it is less successful in accounting for the persistence of political support for these policies over long historical stretches in the face of massive economic and political transformations. (Mares 2009) - Some argue that this typology focuses exclusively on social security and income transfers and omits important programs, such as health and welfare services (Leibfriedn and Mau 2007), education policies (allmendinger and Leibfried 2003), - Overstates the conflict between capital and labour. The study is premised on the notion of decommodificaiton which presupposes a zero-sum political conflict between these actors. "Since decommodiciation strengthens the worker and weakens the absolute power of employers... emplyoers have always opposed decommodificaiton" This assumption is too strong and is in fact empirically inaccurate

Iversen on Esping Andersen

Idea: 1) Distinguishes three different 'worlds' of welfare capitalism - each associated with a distinct tax-benefit structure 2) In most redistributive (SD) type, progressive taxation coupled with flat rate benefits; in 'liberal type means-tested benefits are targeted to the poor; in the 'conservative type benefits are tied to income and occupation. Argument: 1) structure of benefits associated with and perhaps causes, different social divisions and political patterns: poor against middle class in means tested, insiders versus outsiders in conservative, and public against private sector in social democratic Origins: **can't be accomplished with a median voter model, nor with a simple left-right partisan model** 1) Red‐green coalitions in Scandinavia forced socialist parties (which lacked stable majorities) to accept universalism. 2) State‐corporatist coalitions in continental Europe were forged by autocrats like Bismarck to stem the rise of the labor movement. 3) In countries such as Britain and the USA, where the state and the left were both relatively weak, social issues were essentially dealt with through an extension of the old poor laws, allying the middle class with higher income groups. Problems: 1) Neither the origins of the three worlds, nor their stability, can be said to be explained since there is no argument to preclude alternative outcomes. 2) Without any explicit theory, much of Esping‐Andersen's analysis comes across as post hoc description.

Trends in the public sector and welfare state

Important not just to look at the rise of welfare state in 60s and 70s but also its subsequent decline

New Social Risks

In recent years along with the persistence of the main risks of the industrial society, new social risks are being brought about by economic and demographic developments. New social risks are not fully consistent with traditional classification of social risks -class based risks, life courses risks, intergenerational risks (Esping-Andersen, 1999)- but they can affect any social group in a particular phase of a life cycle, being the result of general existential risks and several group specific ones (Kitschelt and Rehm, 2006).

Skocpol and Amenta (1986) States and Social Policies

Interspersed this argument throughout my notes but, overall... • As new research is designed, scholars should presume that the causes of policy origins are not necessarily the same as the causes of the subsequent development of policies, in part because policies themselves transform politics

Decommodification

It is the granting of social rights. If social rights are given the legal and ractical status of property rights, if they are inviolable, and if they are granted on the basis of citizenship rather than performance, they will entail a decommodification of the status of indiiduals vis-à-vis the market. De-commodification occurs when a service is rendered as a matter of right, and when a person can maintain a livelihood without reliance on the market. Minimum definition od decommodification: Citizens can freely, and without potential loss of job, income or general welfare, opt out of work when they themselves consider it necessary.

How to measure the welfare state?

MEASURING THE WELFARE STATE 1) In terms of resources. Revenue, expenditure, workforce. - Social Security Expenditure Issues *All spending cannot count equally! Austria spend a large share of benefits on privilliged civil servants. *Tax privileges and pension insurance plans to middle classes? *Thatcher Grew Total Social Expenditure. - public expenditure including or excluding military expenditure issues * Includes expenditures on general government, foreign affairs, internal security etc 2) In terms of outcomes. Healthy, education, inequality - comparable data on welfare outcomes are scarce - second it is hard to distinguish the specific effect of the welfare state on a given outcome 3) In terms of coverage. how universal it is. SAMPLE SIZE FOR WELFARE STATE - OECD vs Global Sample - Less data for developing countries (also less reliable) - OECD = smal sample, and potential multicollinearity as the explanatory variables are related to one another CONTRADICTING WELFARE STATE EMPIRICS - Ambiguities make it difficult to operationalize the 'pubic sector' in empirical studies, an issue which Uusitalo (1984) claims results in inconsistent empirical findings about its growth.

FEATURES OF WELFARE STATES OTHER TYPES OF WELFARE STATES

Mediterranean Welfare States. Clientelism. Focus on pension provision but not much for unemployment. Antipodean Welfare states. Means testing bust threshold is set low and you can still get to a high level of benefits, not all that liberal

What does Welfare State do?

OUTCOMES 1) Guarantee minimum income. 2) Reduce insecurity. 3) Provide access to social services. GOALS 1) Insure against risk 2) Redistribute resources

STABILITY AND CHANGE IN SOCIAL POLICY

OVERALL - Beginning in the mid 1970s welfare states throughout the world entered a turbulent period of transformation (Mares 2009) - In advanced industrialized economies, governments attempted to reconcile their commitment to social protect with new economic and demographic constraints. - However the magnitude of the change experienced by advanced industrialized economies pales in comparison to the thoroughgoing policy changes that would occur in Latin America, Asia and Eastern Europe in the 1990s RETRENCHMENT? - Welfare states have entered a new era of permanent austerity (Pierson 1998) - Pierson's explanation for the variation across policy areas has invoked the consequences of previous programs, arguing that existing policies 'lock in' subsequent developments (Pierson 1993) - He argues that the features that matter are the size of a program (which results in greater stability the larger the program), and the maturity of the program (which raises costs of shifting to an alternative path) Issues: - In many countries, the largest public programs - pensions - have experienced the most dramatic change, while smaller programs have proven to be more resilient. RECALIBRATION? - Suggest that the dichotomy between expansion and retrenchment is too sharp, as polticians expand benefits to some constitutencies to avoid political blame for unpopular cuts CONSISTENCY? - A number of studies have argued that institutional differences among liberal, conservative and social democratic welfare reimes remain predictors of the adjustment of institutions of social protection during the period (Scharpf and Schmidt 200, Huber and Stephens 2001) - Despite being subject to common pressures (raging populations and decline in manufacturing employment) we find divergence in the evolution of policy with Scandinavia maintaining a relatively egalitarian wage structure and expanding their social services, Conservative welfare regime countries have become trapped in equilibrium of low labor force participation rates and rising payroll taxes, and Liberal welfare regimes have deregulated labour markets and reduced existing entitlements

Orloff and Skocpol (1984) Why Not Equal Protection? Explaining the Politics of Public Social Spending in Britain, 1900-1911, and the United States, 1880s-1920

OVERALL - Conventional theories of welfare-state development-theories emphasizing industrialization, liberal values, and demands by the organized industrial working class-cannot sufficiently account for these contrasting British and U.S. pattern - • This article aims to explain why Great Brit- ain was among the world's pioneers in launch- ing social insurance, while the early twentieth-century United States failed to adopt old age pensions and health and unemployment insurance, settling only for workers compen- sation and mothers' pensions. ARGUMENT - Ultimately, logic of industrialism, liberal values, and working-class strength perceptions all share basic assumptions 1) All understand the development of the modern welfare state as an inherently progressive phe- nomenon 2) Government activities are understood to be expressions of - or responses to - social demands - BUT: • states matter not only because of- ficials and politicians can be independent ac- tors but also because the organizational structures of states indirectly influence the meanings and methods of politics for all groups in society KEY POINTS OF ARGUMENT - When the international ferment over modern social insurance and pensions spread to Britain and the US, around the turn of the century... BRITAIN - Britain already had a civil service, pro- grammatically competing political parties, and legacies of centralized welfare administration to react against and build upon. • Modern social-spending programs complemented the organizational dynamics of government and parties in early twentieth-century Britain. US - lacked an established civil bureaucracy and was embroiled in the ef- forts of Progressive reformers to create regu- latory agencies and policies free from the "political corruption" of nineteenth-century patronage democracy. • At this juncture in American history, modern social-spending programs were neither governmentally feasible nor politically acceptable. US - During the Progressive Era, as the Civil War generation died off, the United States failed to institute modern pensions and social insurance. - Histo- rians and social scientists have long assumed that the U.S. federal government had no major social-welfare role before the 1930s, but the remarkable expansion of "Civil War" pensions after the 1870s utterly belies this assumption. UK INTERESTING POINT - Some scholars argue that modern social-spending programs were diffuclt to establish in the early twentieth-ceuntry US because the nation was committed in the nineteenth century to 'self-adjusting' laissez-faire market capitalism. - • However, Britain came close to this ideal type, - when British Liberal politicians proposed pensions and social insurance after 1906, they did so partly in order to maintain free trade by heading off Conservative proposals for new protective tariffs on British industries

Uusitalo 1984 'Comparative Research on the Determinants of the Welfare State: the State of the Art'

OVERALL- the choice of research units, the definition of the explanandum, neglect of variables with possible explanatory value, and weaknesses in the reliability and validity of the measured variables do affect the findings and cause inconsistencies. POLITICS - Which political factors are important may partly depend on what particular phase of the welfare state development is being explained - EG the early phase of the welfare state development, the form of political regime is important: constitutional-dualistic monarchies statered to develop into welfare states earlier than parliamentary democracies. - Among more advanced nations, corporatism, or economy-wide bargaining may be important for the understand of the growth of public and social expenditures - POLITICS DOES MATTER AND IN MORE THAN ONE WAY TOWARDS A GENERAL MODEL - Industrialization and economic structure are seen as crucial preconditions for the development of the welfare state - We should keep open the possibility that they all can make some contribution towards a comprehensive understanding of the manifold aspects of the welfare state

Lindert 2004 What Drove Postwar Social Spending

Overall - The greater part of the answer rests on the same broad social forces that were already acting in the half-century after 1880 - Electoral politics continued to play a key role in international differences in social transfers, but with voter turnout performing more visibly than voter rights. Effects: 1) The voting share of adults again rasies social transfers 2) A greater number of changes at the top over a ten-year period raises the share of GDP spent on welfare, on public health, and social transfers in 1962-1981 era 3) Postwar againg tends to raise pensions more clearly than it raises total social spending. That populations continue to get older has pushed a now-evident influence toward its predictable limit 4) A strong influence on the current rate of social transfers is the recent history of that rate itself. There is a large carry over from one period to the next, when the periods atre three- and four-year averages 5) Openness by itself by itself had a negative effect on social spending a la 'race to the bottom' but it had a strongly positive effect when interacted with terms of trade movements

Gøsta Esping-Andersen (1990) The Three Worlds of Welfare Capitalism

Overall - The history of political class coalitions is the most decisive cause of welfare-state variations - Welfare stats as clustering into three different tyopes of regime that we hae labeled conservative, liberal, and, social democratic. - The hope of finding one single powerful causal force must be abandoned; the task is to identify salient interaction effects - Three factors should be of particular importance: the nature of class mobilization; class political coalition structures; and the historical legacy of regime institutionalization. - It is a historical fact that welfare-state construction has depended on political coalition-building. The structure of class coalition is much more decisive than are the power resources of any single class Premised on the assumption that two latent dimensions capture empirical variation among welfare states 1) Decommodification- the implicit guarantee to individuals to 'maintain a livelihood without reliance on the market' 2) Stratificiation - while many social policies attempt to counteract and minimise the inequality generated by the labour market, social policies themselves remain a source of inequality. Stringent eligibility rules can stigmatize the recipients of benefits; occupational benefits can reinforce and sometimes even magnify the inequalities created by the labour market. Hence, welfare stats 're-stratify' ORGINS OF WELFARE STATES - Scandinavia = move from the left. Social Democrats introduce reformers and they represent a mix of workers and farmers. Created comprehensive and encompassing social programs. Gives workers more power. - Bismark and Germany = a move from the Right. Fear of the working class. 1881-1889 - series of reforms introducing pension, incapacity and unemployment benefit. Look to preserve status by dividing middle and working classes. - Liberal Model. Residual, limited state that builds on poor relief model. Weaker unions and left parties and weaker Christian Democrats. Liberal welfare states - Minimise interference with the market, prioritise self-help, and rely extensively on privately provided benefits Conservative welfare states - Heavily based on insurance schemes, which reinforce occupational differences Social democratic welfare states - Rely extensively on tax-financed, citizenship-based benefits EMPRICS - Primary evidence comes from cross-sectional analysis of differences in program design among 14 OECD countries in 1980 - Subsequent studies provided more rigours tests of the hypothesis of clustering of OECD countries in three distinct welfare regimes (Obinger and Wagschal 1998) and updated these initial measures by developing time-varying indicators of decommodification and strafitication (Scrugggs and Allan 2006) FURTHER PROBLEMS (see above for more) - Yet for the purpose of examining various consequences of welfare states, the great advantage of this typology becomes problematic insofar as it mixes causes, mediating variables, and outcomes.

NEW POLITICS PERSPECTIVE OF WELFARE RETRENCHMENT

PIERSON'S APPROACH -The "new politics" perspective holds that in the present era of austerity, class-based parties once driving welfare state expansion have been superseded by powerful new interest groups of welfare-state clients capable of largely resisting retrenchment pressures emanating from postindustrial forces. - Retrenchment is a distinctive process reflecting the 'new politics of the welfare state', which is likely to follow new rules and to involve new types of interest groups different from those operating during the long phase of welfare-expansionism - • In the new politics perspective the forces driving retrenchment are conceived as emanating largely from the advance of postindustrial society, which generates permanent austerity. THREE LINES OF ARGUMENT FOR QUESTIONING THE ROLE OF SOCIO-ECOONMIC CLASS AND POWER-RESOURCES APPROACH 1) First, this approach views relations between employers and employees as a zero-sum conflict and has neglected the positive role of employers for welfare state development 2) Second, it is maintained that in the retrenchment phase political contexts and goals of policymakers have changed markedly. (retrenchment policies are unpopular, and politicians have to cope with the "negativity bias" among voters, who have come largely to support existing welfare-state programs. Politics then becomes the art of "blame avoidance) 3) Third, by their very existence, welfare states have generated new and strong interest groups among recipients of various benefits, such as pensioners, the disabled, and health care consumers but also among welfare-state employees. The emergence of these groups is assumed to 'make the welfare state less dependent on political parties, social movements, and labour organisations that extended it in first place

What is Social Security?

Social security is generally considered to consist of five distinct programs which provide cash payments to individuals to replace income lost as a result of injury related to employment, sickness and maternity, old age, and unemployment, and to supplement income for families with children (Collier and Messick)

WELFARE REGIMES IN DEVELOPING COUNTRIES

Studies look primarily at Latin America, Asia, and Eastern Europe. Empirically these studies have focused on differences in aggregate levels of spending and differences in spending categories across programs WIBBELS AND AHLQUIST 2007 - Seek to identify the underlying structural factors that condition the choice of a developmental model and a social policy model - These latter two variables are causally linked. A particular development model - Premised on either 'import-substitution industrialization or export expansion requires a steady supply of labour - Social policies play critical role in affecting workers' decisions to participate in labour market and types of education (and skills) they acquire - Wibbels and Ahlquist argue that the resulting social policies tend to cluster on three main regimes that emphasize either REDISTRIBUTIVE SOCIAL INSURANCE, HUMAN CAPITAL DEVELOPMENT, or a MIX OF TWO CRITIQUES OF ABOVE STUDY - Many of the structural factors taken by authors to be given and exogenous might in fact be endogenous to the political process and the social policy regime adopted - Particularly, levels of inequality and labour market stratification would seem to be as much created by the level of redistribution or the education system as they are products of it. - Labour scarcity, one of the key explanatory variables in the Wibbels-Ahlquist model is treated as 'country invariant' whereas, in fact, countries show significant varation in this variable over time. CAVEATS - Many of our findings concering social protection in developing countries are still based on an analysis of aggregate spending data, which is an imperfect metric of differences in the scope of social protection. - So far, existing studies have prodivded broad-brush accounts of the political processes leading to distinct types of spending in the developing world.

What is the Welfare State?

System of social protection 'in which organized power is deliberately used (though politics and administration) in an effort to modify the play of market forces in three directions'. Must we categorise welfare state by type? Are they too heterogenous to group? WHAT DOES IT INCLUDE? Pensions, health, unemployment, sickness and disability, ALMPs, family benefits, housing income support. (Education?) Esping-Andersen - A common textbook definition is that it involves state responsibility for securing some basic modicum of welfare for its citizens - Such a definition skirts the issue of whether social policies are emancipatory or not; whether they help system legitimation or not; whether they contradict or aid the market process; and what, indeed, is meant by 'basic'? Would it not be more appropriate to require of a welfare state that it satisfies more than our basic or minimal welfare needs - Few can disagree with Marshall's (1950) proposition that social citizenship constitutes the core idea of a welfare state, above all it must involve the granting of social rights. - If social rights are given the legal and practical status of property rights, if they are inviolable, and if they are granted on the basis of citizenship rather than performance, they will entail a de-commodification of the status of individuals vis-avis the market - See decommodificatios (below)

INSTITUTIONAL EXPLANATIONS OF WELFARE STATE

The gist of institutionalism is the way in which institutional rules adjudicate among a variety of preferences, and hence give different weights to these preferences, no matter where the adjudication occurs - Immergut 1992 BUREACRACIES - Downs (1964), Niskanen (1971), Wildavsky (1974), and Tarschys (1975) argue that govern- ment bureaucracies develop internal pressures for self-aggrandizement and expansion. If that is true, then a multiplicity of autonomous governmental bureaucracies would enhance this tendency. - Orloff (1985) show how various sequences and forms of democratization and state bureaucratization affected both the capacities of civil administrations and the orientations of working-class groups and middle-class reformers toward social spending policies in Britain, Canada and the UK from the nineteenth century though the 1930s. - No program was ever introduced without the very active participation of high-level bureaucrats. STATES AS AUTONOMOUS ACTORS 1) States have instituted social policies as part of their own organisational and territory. Tilly compares England, France, Spain and Brandenburg-Prussia to analyses how efforts of early modern state markets to extract revenues and build armies became variously intertwined with policies to simulate the production of food and regulate its availability to officials and potentiall rebellious peasants. 2) Some studies takes note of the coincidence since the nineteenth century of modern 'total warfare' with the growth of modern social insurance and welfare policies. a) Andreski 1968 and Titmuss 1958, mass citizen mobilization for modern warfare has encouraged more generous, universalistic, and egalitatiran public social provision, especially when the line between soldiers and civilians becomes blurred, as it did in WWII Britain. • Democratic politicians appealing for popular support in wartime can be seen as the agents of this welfare-warfare linkageIssue: Systematic cross national evidence is lacking. b) Major wars require and allow goevernments to expand their fiscal base; after the war, much of the state's enhanced fiscal capacity remains and new or expanded social expenditures may be instituted more easily than usual ISSUES: a) Not only are the causal linkages unclear, but the outcomes are irregular as well. b) For instance, how can we explain that neutral countries such as Sweden and Switzerland reacted to the end of the two world wars with similar social policy proposals, but the actual legislative results were polar opposites HISTORICAL INSTITUTIONALIST - Emphasize the legacy of distinct national expriences, unique patterns of institution building and organization of social interests, as well as, in many cases, the role of states in demarcating the boundaries of conflict and representation RATIONAL CHOICE INSTITUIONALIST - • The ways institutional rules affect strategic interactions of political participations. These rules - and not the initial preferences of the various players - determine where the equilbiirium balance point between the different interests concerned will be found. SOCIAL POLICIES RESHAPING POLITICS - Not only does politics create social policies; social policies also create politics. - That is, once policies are enacted and implementsd, they change the public agendas and the patterns of group conflict through which subsequent policy changes occur. INSTITUTIONAL STRUCTURES HELP TO SHAPE THE POLITICAL PROCESSES - see immergut 1992

Welfare state as a power resource

The social rights, income security, equalization, and eraditcation of poverty that a universalistic welfare state pursues are necessary preconditions for the strength and unity that collective power mobilization demands (Esping-Andersen 1985)

What is a social risk?

WHAT IS A SOCIAL RISK? - A risk derived from society, in the sense that individuals are subject to these risks because of societal dynamics, changes, and pressures (Alcock, May, and Wright, 2012, 107). But what about old age.. not a society risk. - A risk that only society is capable of tackling? However, it is not necessary that the welfare state be involved in dealing with all such social risks, private health insurance, for example, seems to work effectively enough as a market-based solution. - Most convincingly, 'social risks' could be thought of as risks which individuals face but that society has an interest in, or even risks to society itself. Social risks have been defined as the likelihood that life chances are reduced while a perception of insecurity, isolation, inequity and inequality is fuelled (Ranci, 2009 forthcoming; Sen, 1985, 1987; Van Den Bosh, 2001). A distinction has been advanced between risk and vulnerability. Risk refers to the probability of a certain event of occurring, vulnerability to the severity of the impact of a certain event, regardless of its probability of occurring. NEW SOCIAL RISKS - New social risks are related to the socio-economic transformations that have brought post-industrial societies into existence: the tertiarisation of employment - widening earning inequalities and reducing job stability- and the massive entry of women into the labour force (Taylor-Gooby, 2004; Bonoli, 2005; Ranci, 2009 forthcoming). New social risks, as they are identified in the literature, include the following: • Reconciling work and family life • Single parenthood • Having a frail relative • Possessing low or obsolete skills - It has been put forward that new social risks can hit any social group in a particular phase of a life cycle (Leisering and Leibfried, 1999; Barnes et al., 2002) rather than hitting a limited social group. HOWDO WELFARE STATES ADDRESS SOCIAL RISKS? - Welfare states address social risks by reallocating the costs of potential negative outcomes which affects the decisions that individuals make.

Power Resources Theories of the Welfare State

WORKER POWER - Theory developed in 1970s - Korpi and Stephens - Welfare state not a function of economic pressures. Larger welfare states emerged where there were stronger left parties and unions. - Social classes are the main agents of change; balance of class power determines distributional outcomes. - Distributive conflict is key. Social policy can be compatible with efficiency but is not the key to it. - If center‐left governments simultaneously promote pre‐fisc income equality and redistribution, partisanship may not only explain distributive outcomes but solve the Robin Hood paradox. - According to the boldest variant of this line of reasoning, put forward by Stephens (1979:89), "the welfare state is a product of the growing strength of labour in civil society,"' CIVIL DISOBEIDENCE - Piven and Cloward - Increased welfare benefits and other social legislation associated with an expanding public sector were granted following concessions by elites to protests by workers and the poor in the United States. - Myles (1984) finds that civil disruption from 1960 to 1970 had little effect on pension expenditure in subsequent years and there is scant evidence to suggest that protest has a significant effect on public sector growth outside of the US. - Nuance form Skocpol and Amenta: we can tentatively conclude that mass disruption arguments are most applicable to times and places where working classes and other organized democratic forces lack access to regular institutional channels for affecting social policies KORPI AND PRT 1) Protagonists initate polcieis (unions and workers) 2) Consenters accept policies 3) Antagonists remain steadfastly opposed to policies - A reaction to a cross class alliance literature. EMPLOYERS ARE NOT PROTAGONISTS Counter: If firms are antagonists, then why do they continue to invest in countries with large and generous welfare states. There should be capital flight PROBLEMS: - Explain why the Right also agree with it - Power of one agent cannot be indicated by its own resources: depends on resources of contending forces, on the historical durability of its mobilization, and on patterns of power alliances. - Locus of power may shift away from parliaments (to neo-corporatist institutions). - Class-mobilization thesis has rightly, been criticised for its Swedocentrism. - Assumes linear view of power.o It is problematic to hold that a numerical increase in votes, unionization, or seasts will translate into more welfare-statism. - In Austria and Germany at the very least, it was neither unions, nor social democratic parities that initiated large increases in social spending at the turn of the 20th century, rather conservative monarchs. (alter 1981) - Two nations such as Austria and Sweden may score similarly on working-class mobilization variables, and yet produce highly unequal policy results. - Flora & Alber (1981) and Alber (1981) have shown that this model does not apply to the origins of Euopean social insurance programs. - GREAT CRITICISM FROM ESPING-ANDERSEN OF REVERSE CAUSATION: • The social rights, income security, equalization, and eradication of poverty that a universalistic welfare state pursues are necessary preconditions for the strength and unity that collective power mobilization demands EMPRICIS 1) Supporting - Bjorn (1979), Cameron (1978) and Hewitt (1977) find that post-war expansions of government social expenditures are caused in part by the determinants of the social democratic theory. - Stephens found that, in 17 capitalist democracies, public spending in 1976 is significantly related to the number of years that social democratic parties have been in the executive and the extent of economy-wide bargaining by unions. - It is the conclusion of Skocpol and Amenta (1986), and myself, that the effect of worker power and social democratic parities "applies best to the relative expansion after World War II of national social expenditures."

Welfare State as an Insurer

Welfare State as an Insurer. Many programs are horizontally redistributive; insure risk rather than change income distribution (some more at risk than others). Health, pension unemployment, disability - transfers across life-cycle/risk groups not only from rich poor. However, most spending does help the poor, even if it doesn't dramatically reduce inequality.